Notes to the consolidated financial statements

Additional information on the consolidated financial statements

1. Segment information

1. Segment information

1.1 Net sales by region

in CHF thousand

2021

%

2020

%

Switzerland

53 925

11 

48 289

11 

Europe (excluding Switzerland)

275 655

56 

276 755

62 

The Americas

100 553

20 

64 602

15 

Asia

54 194

11 

49 461

11 

Rest of the world

12 366

6 082

Total

496 693

100 

445 189

100 

Total net sales were 11.6 % (CHF 51.5 million) up on their prior-year level, or 12.6 % (CHF 56.0 million) up based on prior-year currency translation rates. The impact of currency movements amounted to –1.0 % (CHF – 4.5 million). The average EUR/CHF currency exchange rate was 0.9 % up on the previous year, while the average USD/CHF rate showed a 2.6 % decline.

1.2 Income statement by division

2021 in CHF thousand

Chemistry

Paper

Packaging

Other/ consolidation

Group

Net sales

95 146

230 877

170 670

496 693

EBITDA

20 456

– 8 007

11 916

1 353

25 718

in % of net sales

21.5 

– 3.5 

7.0 

5.2 

EBIT before impairment

15 308

– 24 888

5 686

1 227

– 2 667

in % of net sales

16.1 

– 10.8 

3.3 

– 0.5 

EBIT

15 308

– 174 888

5 686

1 227

– 152 667

in % of net sales

16.1 

– 75.7 

3.3 

– 30.7 

2020 in CHF thousand

Chemistry

Paper

Packaging

Other/ consolidation

Group

Net sales

73 286

209 581

162 322

445 189

EBITDA

9 467

17 369

27 819

496

55 151

in % of net sales

12.9 

8.3 

17.1 

12.4 

EBIT

4 612

– 2 035

21 626

460

24 663

in % of net sales

6.3 

– 1.0 

13.3 

5.5 

2. Other operating income

2. Other operating income

in CHF thousand

2021

2020

Energy sales

3 214

3 116

Sales of carbon credits

18 104

0

Rental income from business premises

508

507

Income from production waste

1 040

676

Miscellaneous

2 320

1 324

Total

25 186

5 623

Other operating income was substantially higher in 2021 than it had been the previous year owing to the sales of carbon credits which had been issued to Perlen Papier AG between 2018 and 2021 (see also Note 16). ‘Miscellaneous’ for 2021 includes government grants (in the USA) amounting to CHF 1.4 million (prior year: CHF 0.0 million).

3. Personnel expense

3. Personnel expense

in CHF thousand

2021

2020

Salaries and wages

77 704

76 914

Pension scheme contributions and other social security expense

13 022

14 346

Other personnel expense

1 641

1 871

Total

92 367

93 131

Personnel expense for 2021 was 0.8 % (CHF 0.8 million) below its prior-year level. Personnel numbers were increased in the Chemistry Division in response to the high product demand, while personnel expense for the Paper and Packaging divisions were below those of 2020. The Paper Division received short-time working compensation amounting to CHF 0.2 million (prior year: CHF 1.6 million). In addition to the contributions to state social security institutions, ‘Pension scheme contributions and other social security expense’ includes the contributions to company pension schemes described in Note 19. Members of Group Executive Management were assigned a total of 2 682 shares in 2021 under their share-based compensation provisions. Based on a share price of CHF 66.80, the corresponding expense, which is included under ‘Salaries and wages’, amounted to CHF 0.18 million.

4. Other operating expense

4. Other operating expense

The CHF 24.9 million of other operating expense (prior year: CHF 24.7 million) includes sales and administrative costs and further operating expenses.

5. Impairment

5. Impairment

The fixed assets of the Paper Division were tested for impairment as at 31 December 2021.

The European market for graphic printing paper has been undergoing radical structural change for over ten years now. Print newspapers are losing ground to digital platforms as a news medium. The trend is accompanied by consolidation within the media market. So not only are newspapers shrinking in print run and page volume terms: numerous titles have been merged or have closed entirely. As a result, the demand for newsprint has been falling in Western Europe since 2008 by some 6 – 8 % a year. The decline has also prompted adjustments to production capacities. But since such reductions take longer to effect, overcapacities have developed, and with them strong pricing pressures. This in turn has halved paper prices from their previous highs.

With substantially less paper manufactured during the coronavirus pandemic, less waste paper was also available for recycling use. The industry thus faced a shortage of recovered paper in 2021 when demand for its products picked up again in the course of the year. The situation was exacerbated by higher demand from the cardboard packaging sector, which used both waste cardboard and waste paper as raw materials to provide sufficient volumes of packaging for the booming online sales segment. As a result, recovered paper prices rose to historic highs, and waste paper supply lines were tested to the extreme. Steep rises were also seen in electricity and thermal energy prices.

No medium-term easing of the European paper and raw materials market situation is currently in sight. Margins will remain under pressure, accentuated by still-high raw materials and energy prices. In view of the continuing predatory competition and the substantially higher raw materials and energy prices, an impairment of CHF 150 million (prior year: CHF 0) was effected to net market value (see also Note 17). As a result, the assets concerned are now valued on the basis of their net market value, which is negligibly above their value in use. An impairment of CHF 4.1 million (prior year: CHF 0) was also recognized in theoretical goodwill movement (see Note 16).

7. Financial expense

7. Financial expense

in CHF thousand

2021

2020

Interest expense

2 493

2 693

– interest paid

2 495

2 690

– changes in deferred interest due

– 2

3

Other financial expense

2 050

2 166

– currency exchange rate losses

1 584

1 856

– further financial expense

466

310

Expenditure on securities

1

5

Total

4 544

4 864

Financial expense was CHF 0.3 million below its prior-year level owing to lower currency exchange rate losses.

8. Non-operating result

8. Non-operating result

The non-operating income of CHF 7.7 million (prior year: CHF 7.3 million) comprises rental income and proceeds from the sale of real estate not required for operations in Buchrain (CHF 4.6 million, prior year CHF 5.2 million) and Full-Reuenthal (CHF 3.1 million, prior year CHF 0.1 million). Prior-year non-operating income also includes the release of CHF 2.0 million of provisions made for environmental protection measures to clean up the Rotholz waste disposal site in Meilen, Canton Zurich. The non-operating expense of CHF 0.4 million (prior year: CHF 0.5 million) consists of expenditure relating to the sale and management of non-operating real estate in Uetikon, Perlen, Buchrain and Full-Reuenthal.

9. Extraordinary result

9. Extraordinary result

There was no extraordinary income or extraordinary expense in 2021. In the previous year, the provisions for the lake bed clean-up at the former Uetikon site were reduced by CHF 12.0 million, with the release effected via the extraordinary result by analogy to the original creation in 2016 of the provisions concerned (see Notes 26/28).

10. Income taxes

10. Income taxes

in CHF thousand

2021

2020

Current income taxes

2 238

3 745

Deferred income taxes

– 43

– 11 856

Total

2 195

– 8 111

Income tax expense for 2021 amounted to CHF 2.2 million. In the previous year an intragroup transfer of real estate at the Perlen site resulted in deferred tax assets and corresponding deferred tax income of CHF 11.9 million.

Tax rates varied in 2021 between 10 % and 34 % (prior year: between 10 % and 34 %) depending on the country and the location.

Income taxes for 2021

Tax rate in %

Tax amount in CHF thousand

Earnings before taxes

– 149 215

Weighted average tax rate expected/estimated tax expense

11.6 

– 17 286

Impact of losses carried forward not recognized in current year in tax terms

22 306

Impact of losses carried forward not recognized in prior years in tax terms

– 2 292

Taxes paid in prior years

– 35

Other effects

– 498

Tax rate/tax expense as per income statement

– 1.5 

2 195

The Group’s expected income tax rate for 2021 amounted to 11.6 % (prior year: 18.2 %). This is the weighted average tax rate based on the individual profits/losses before taxes and tax rates for each group member company. The change in this expected income tax rate is due to the profit/loss situation and changed tax rates at the various group member companies. The difference in the year under review between the estimated income tax expense and the income tax expense shown in the income statement is attributable largely to the non-recognition of losses carried forward from 2021 (primarily the fixed assets impairment at Perlen Papier AG).

In accordance with the consolidated accounting principles, deferred taxes on losses carried forward are not capitalized. Uncapitalized losses carried forward increased in 2021 to CHF 285.7 million (prior year: CHF 65.2 million), with a potential tax impact of CHF 20.8 million (prior year: CHF 7.4 million), paying due regard to the multi-year plan and the provisions of and possibilities under the relevant national tax laws. The change is attributable in particular to the fixed assets impairment. CHF 3.3 million of the losses carried forward are of indefinite duration (prior year: CHF 0.0 million), and CHF 13.4 million thereof (prior year: CHF 5.2 million) will expire within a year.

Income taxes for 2020

Tax rate in %

Tax amount in CHF thousand

Earnings before taxes

38 852

Weighted average tax rate expected/estimated tax expense

18.2 

7 080

Impact of losses carried forward not recognized in current year in tax terms

140

Impact of losses carried forward not recognized in prior years in tax terms

– 3 656

Impact of intragroup real-estate transaction resulting in use of losses carried forward not recognized in prior years in tax terms

– 11 929

Taxes paid in prior years

– 135

Other effects

389

Tax rate/tax expense as per income statement

– 20.9 

– 8 111

In 2020 Perlen Papier AG transferred real estate at the Perlen site to Perlen Papier Immobilien AG at market rates. The transaction was effected using a previously uncapitalized CHF 97.1 million of tax losses carried forward. The intragroup transaction resulted in deferred tax assets and corresponding deferred tax income of CHF 11.9 million, as the purely tax-related upward revaluation generated a deductible temporary difference.

11. Liquid funds and securities

11. Liquid funds and securities

Liquid funds decreased from CHF 116.3 million to CHF 95.1 million in 2021 as a result of the negative free cash flow developments and the repayment of financial liabilities.

12. Trade accounts receivable

12. Trade accounts receivable

in CHF thousand

2021

2020

Receivables from third parties

75 455

60 032

Receivables from associates

0

0

Provisions for doubtful debts

– 6 184

– 7 140

– individual adjustments

– 6 184

– 7 135

– blanket adjustments

– 5

Total

69 271

52 892

Trade accounts receivable were CHF 16.4 million above their prior-year level, owing to the higher net sales.

Individual adjustments are effected to certain doubtful receivables. Such adjustments were CHF 1.0 million lower in 2021 than they had been for the prior year. The levels of such adjustments could be reduced in the Paper and Packaging divisions.

13. Other receivables

13. Other receivables

Other receivables were CHF 11.4 million up on their prior-year level. The increase is attributable largely to a reclassification of short-term receivables relating to the lake bed clean-up and to real estate activities.

14. Prepaid expenses and accrued income

14. Prepaid expenses and accrued income

The CHF 2.5 million change in prepaid expenses and accrued income is attributable to outstanding state ‘KEV’ compensation for green energy generated.

15. Inventories

15. Inventories

15.1 Inventories by division

in CHF thousand

2021

2020

Chemistry

29 353

28 468

Paper

27 154

23 567

Packaging

31 021

26 288

Total

87 528

78 323

15.2 Inventories by type

in CHF thousand

2021

2020

Raw materials

19 406

17 367

Auxiliary and operating materials

15 294

13 997

Finished and semi-finished products

51 723

46 257

Goods for resale

1 105

702

Total

87 528

78 323

Inventories were CHF 9.2 million above their prior-year levels, owing primarily to the increases in raw materials prices.

Inventories were subjected to an overall impairment of CHF 4.7 million (prior year: CHF 4.4 million).

16. Intangible assets

16. Intangible assets

Intangible assets in 2021 in CHF thousand

Software, licences and patents

Other intangible assets

Total intangible assets

At purchase values

Opening balance on 1.1.2021

16 848

1 139

17 987

Currency impact on opening balance

– 81

49

– 32

Additions

1 620

1 620

Disposals/reclassifications

– 1 323

– 1 323

Currency impact on movements

– 3

– 3

Closing balance on 31.12.2021

17 061

1 188

18 249

Depreciation

Opening balance on 1.1.2021

11 980

442

12 422

Currency impact on opening balance

– 60

9

– 51

Depreciation for the period

1 352

20

1 372

Disposals/reclassifications

– 1 323

– 1 323

Currency impact on movements

– 6

– 6

Closing balance on 31.12.2021

11 943

471

12 414

Book value on 1.1.2021

4 868

697

5 565

Book value on 31.12.2021

5 118

717

5 835

‘Additions’ above include major investments in ERP system software in the Packaging Division.

The intangible assets as at 31 December 2021 include zero carbon credits (prior year: 214 504 credits) issued free of charge by the Swiss Federal Office for the Environment to Perlen Papier AG, which are initially capitalized at zero nominal value. These carbon credits are realized upon their use or sale. Any income deriving from such sales is shown under other operating income.

Intangible assets in 2020 in CHF thousand

Software, licences and patents

Other intangible assets

Total intangible assets

At purchase values

Opening balance on 1.1.2020

15 769

1 173

16 942

Currency impact on opening balance

– 24

– 34

– 58

Additions

1 268

1 268

Disposals/reclassifications

– 167

– 167

Currency impact on movements

2

2

Closing balance on 31.12.2020

16 848

1 139

17 987

Depreciation

Opening balance on 1.1.2020

10 912

434

11 346

Currency impact on opening balance

– 17

– 14

– 31

Depreciation for the period

1 251

23

1 274

Disposals/reclassifications

– 167

– 167

Currency impact on movements

1

– 1

0

Closing balance on 31.12.2020

11 980

442

12 422

Book value on 1.1.2020

4 857

739

5 596

Book value on 31.12.2020

4 868

697

5 565

The goodwill deriving in 2020 from the acquisitions of business activities and minorities was offset directly against equity (see Note 29).

Goodwill is offset against equity (retained earnings) at the time of its acquisition. The impact of a theoretical capitalization of goodwill with five-year straight-line amortization on the balance sheet and the income statement is shown below:

Theoretical goodwill movement

in CHF thousand

2021

2020

At purchase values

Opening balance on 1.1

63 021

61 736

Additions

0

1 285

Closing balance on 31.12

63 021

63 021

Depreciation

Opening balance on 1.1

51 467

44 264

Depreciation for the period

5 430

7 203

Impairment to Paper Division goodwill

4 135

0

Closing balance on 31.12

61 032

51 467

Net book value of goodwill on 1.1

11 554

17 472

Net book value of goodwill on 31.12

1 989

11 554

Impact of goodwill on the income statement

in CHF thousand

2021

2020

Earnings before interest and taxes (EBIT)

– 152 667

24 663

EBIT margin in % of net sales

– 30.7 

5.5 

Depreciation of goodwill

– 5 430

– 7 203

Impairment to Paper Division goodwill

– 4 135

0

Theoretical earnings before interest and taxes (EBIT) including depreciation of goodwill

– 162 232

17 460

Theoretical EBIT in % of net sales

– 32.7 

3.9 

Net result for the year

– 151 410

46 963

Depreciation of goodwill

– 5 430

– 7 203

Impairment to Paper Division goodwill

– 4 135

0

Theoretical net result for the year including depreciation of goodwill

– 160 975

39 760

Impact of goodwill on the balance sheet

in CHF thousand

2021

2020

Equity as per balance sheet

310 494

471 867

Equity in % of balance sheet total

55.4 

67.0 

Theoretical capitalization of net book value of goodwill

1 989

11 554

Theoretical equity including net book value of goodwill

312 483

483 421

Theoretical equity including net book value of goodwill in % of balance sheet total

55.6 

67.5 

17. Tangible fixed assets

17. Tangible fixed assets

Tangible fixed assets for 2021 in CHF thousand

Undevel- oped land

Developed land and buildings

Plant and equipment

Other facilities and IT HW

Fixtures in rented property

Vehicles

Assets under construction

Total

At purchase values

Opening balance on 1.1.2021

6 893

332 384

699 794

333 018

7 165

11 006

19 007

1 409 267

Currency impact on opening balance

86

– 143

129

– 114

37

18

– 47

– 34

Investments

899

9 073

2 286

22

663

8 209

21 152

Disposals

– 17

– 4 810

– 4 638

– 5

– 370

– 9 840

Reclassifications

1 565

6 531

618

7

– 8 721

0

Currency impact on movements

– 43

– 109

– 14

– 55

– 221

Closing balance on 31.12.2021

6 979

334 645

710 608

331 156

7 219

11 324

18 393

1 420 324

Depreciation

Opening balance on 1.1.2021

119

153 055

425 134

223 993

2 724

8 943

813 968

Currency impact on opening balance

7

125

7

– 104

36

14

85

Depreciation for the period

32

5 035

15 203

5 698

450

595

27 013

Disposals

– 17

– 4 810

– 4 638

– 5

– 370

– 9 840

Reclassifications

0

Currency impact on movements

– 13

– 96

– 9

– 1

7

– 112

Closing balance on 31.12.2021

158

158 185

435 438

224 940

3 204

9 189

0

831 114

Impairments

Opening balance on 1.1.2021

0

53 225

138 732

50 779

0

0

0

242 736

Currency impact on opening balance

0

Impairments for the period

54 207

64 992

30 801

150 000

Impairment reversals for the period

0

Disposals

0

Reclassifications

0

Closing balance on 31.12.2021

0

107 432

203 724

81 580

0

0

0

392 736

Opening balance on 1.1.2021

6 774

126 104

135 928

58 246

4 441

2 063

19 007

352 563

Closing balance on 31.12.2021

6 821

69 028

71 446

24 636

4 015

2 135

18 393

196 474

Tangible fixed assets for 2021 include a net book value of CHF 0.3 million for leased assets (vehicles) capitalized through finance leases maturing between 2022 and 2024. Leasing liabilities amount to some CHF 0.3 million, of which CHF 0.2 million are short-term.

The production facilities of the Paper Division were tested for impairment as at 31 December 2021. This resulted in an impairment charge of CHF 150.0 million (see also Note 5).

Investments in the Chemistry Division in 2021 included various expansion projects at the Rüti ZH/CH, Zvornik/BA, Louisville/USA and Lianyungang/CN sites. The Paper Division invested in maintaining and further raising the efficiency of its production plant. In addition to efficiency enhancement and infrastructure modernization projects, the Packaging Division primarily invested a substantial amount in 2021 in its new coating plant in Anápolis/BR.

Tangible fixed assets for 2020 in CHF thousand

Undevel- oped land

Developed land and buildings

Plant and equipment

Other facilities and IT HW

Fixtures in rented property

Vehicles

Assets under construction

Total

At purchase values

Opening balance on 1.1.2020

5 743

336 824

695 585

329 944

7 290

11 315

16 075

1 402 776

Currency impact on opening balance

– 14

– 2 347

– 4 666

– 246

– 149

– 44

– 160

– 7 626

Investments

1 050

214

7 529

3 463

25

177

6 031

18 489

Disposals

119

– 2 524

– 929

– 519

– 442

– 4 295

Reclassifications

0

230

2 319

393

– 2 942

0

Currency impact on movements

– 5

– 13

– 44

– 17

– 1

3

– 77

Closing balance on 31.12.2020

6 893

332 384

699 794

333 018

7 165

11 006

19 007

1 409 267

Depreciation

Opening balance on 1.1.2020

102

151 274

412 399

218 670

2 397

8 816

0

793 658

Currency impact on opening balance

– 3

– 973

– 3 380

– 154

– 142

– 33

– 4 685

Depreciation for the period

20

5 139

16 983

6 001

471

600

29 214

Disposals

– 2 364

– 778

– 519

– 442

– 4 103

Reclassifications

0

Currency impact on movements

0

– 21

– 90

– 5

– 2

2

– 116

Closing balance on 31.12.2020

119

153 055

425 134

223 993

2 724

8 943

0

813 968

Impairments

Opening balance on 1.1.2020

0

53 225

138 732

50 779

0

0

0

242 736

Currency impact on opening balance

0

Impairments for the period

0

Impairment reversals for the period

0

Disposals

0

Reclassifications

0

Closing balance on 31.12.2020

0

53 225

138 732

50 779

0

0

0

242 736

Opening balance on 1.1.2020

5 641

132 325

144 454

60 495

4 893

2 499

16 075

366 382

Closing balance on 31.12.2020

6 774

126 104

135 928

58 246

4 441

2 063

19 007

352 563

Tangible fixed assets for 2020 included a net book value of CHF 0.5 million for leased assets (vehicles) capitalized through finance leases maturing between 2021 and 2023. Leasing liabilities amounted to some CHF 0.5 million, of which CHF 0.3 million were short-term.

As at 31 December 2020 there were no indications that any impairment might be required on any production facilities.

18. Long-term financial assets

18. Long-term financial assets

in CHF thousand

Long-term financial assets

At purchase values

Opening balance on 1.1.2021

10 000

Investments

0

Disposals

0

Currency impact on movements

0

Closing balance on 31.12.2021

10 000

At purchase values

Opening balance on 1.1.2020

10 000

Investments

0

Disposals

0

Currency impact on movements

0

Closing balance on 31.12.2020

10 000

As in 2020, the long-term financial assets consist of the 10 % equity holding in waste incinerator company Renergia Zentralschweiz AG, Root, with which a supply agreement has been concluded for the provision of low-pressure steam to the Perlen paper factory.

19. Assets from employer contribution reserves and pension schemes

19. Assets from employer contribution reserves and pension schemes

19.1 Pension schemes in Switzerland (542 working insurees)

Employer contribution reserve (ECR)

Nominal value

Appro- priation waiver

Other value adjustments

Discount

Balance sheet

Balance sheet

ECR result in personnel expense

in CHF thousand

31.12.2021

31.12.2021

31.12.2021

31.12.2021

31.12.2021

31.12.2020

2021

2020

Pension schemes

11 301

11 301

11 189

– 112

– 111

Total

11 301

0

0

0

11 301

11 189

– 112

– 111

Economic benefit/economic obligation and pension scheme expense

Funding surplus/shortfall as per Swiss GAAP FER 26

Economic interest of company

Change from prior year or recognized in income statement

Accrued contribu- tions for the period

Pension scheme expense in personnel expense

in CHF thousand

31.12.2021

31.12.2021

31.12.2020

31.12.2021

31.12.2021

2021

2020

CPH Group Pension Scheme

3 800

Pension schemes without funding surplus/shortfall

0

0

0

0

0

0

3 800

CPH Group Pension Scheme

14 737

3 824

3 824

Pension schemes with funding surplus

14 737

0

0

0

3 824

3 824

0

UBV Uetikon Betriebs- und Verwaltungs AG Staff Welfare Fund (in liquidation)

0

Perlen Group Assistance Fund

12 867

12 867

11 550

– 1 317

0

– 1 317

– 200

Employers’ funds

12 867

12 867

11 550

– 1 317

0

– 1 317

– 200

Total

27 604

12 867

11 550

– 1 317

3 824

2 507

3 600

Under the investment regulations of the CPH Group Pension Scheme, the scheme is considered to have a funding surplus if it has a fluctuation reserve amounting to 16.5 % or more of its total asset investments (calculated using the Value-at-Risk Method).

The CPH Group Pension Scheme is a defined-contributions pension scheme offering old-age, death and disability benefits. Employer’s contributions are strictly defined in the scheme’s regulations and deed of trust. The companies concerned do not bear any primary risk, i.e. the insurance and investment risks are borne primarily by the pension scheme itself. Actuarial recalculations are regularly conducted.

The latest static recalculation of actuarial capital was performed as at 31 December 2020, based on an actuarial interest rate of 2.0 %, the actuarial foundations of the BVG 2015 Generation Table and a conversion factor of 5.8 %. Actuarial capital has since been further developed in line with insuree numbers effective 31 December 2021. In accordance with a board of trustees’ resolution of 10 November 2021, the actuarial interest rate was reduced from 2.0 % to 1.75 % and the scheme newly adopted the currently valid BVG 2020 actuarial foundations. With the exception of the employer contribution reserve of CHF 11.3 million (prior year: CHF 11.2 million), all the scheme’s surpluses are payable solely to its beneficiaries. According to its provisional balance sheet, the scheme had a funding ratio of 127 % as at 31 December 2021 (prior-year actual funding ratio: 118 %).

The UBV Uetikon Betriebs- und Verwaltungs AG Staff Welfare Fund

The UBV Uetikon Betriebs- und Verwaltungs AG Staff Welfare Fund was an employer’s fund for all employees at the CPH Group’s Uetikon and Rüti sites which provided provident benefits for employees and financial assistance for employees and their families in hardship situations. Contributions to it were made solely by the employer. The Canton Zurich occupational pension law and occupational pension fund supervisory authority approved an application from the Fund’s board of trustees for the Fund’s liquidation and the transfer of its assets and liabilities to The Perlen Group Assistance Fund, Perlen effective 1 January 2021 in accordance with a corresponding transfer agreement of 18 November 2021. The Fund’s freely disposable trust capital (including fluctuation reserves) amounted to CHF 0.0 million on 31 December 2021 (prior year: CHF 0.8 million).

The Perlen Group Assistance Fund, Perlen

The Perlen Group Assistance Fund is an employer’s fund for all employees in Switzerland. The Fund provides provident benefits for employees and financial assistance for employees and their families in hardship situations. Contributions to it are made solely by the employer. The Fund can also be used to finance employer’s contributions to the occupational pension schemes of the Group’s Perlen-based companies. The Fund paid CHF 0.0 million to these schemes for such purposes in 2021 (prior year: CHF 0.0 million). The Fund’s freely disposable trust capital (including fluctuation reserves) amounted to CHF 15.3 million on 31 December 2021 (prior year: CHF 13.7 million). As for 2020, economic interest was calculated based on freely disposable trust capital excluding fluctuation reserves.

19.2 Pension schemes outside Switzerland

Economic benefit/ economic obligation Pension scheme expense

Funding surplus/shortfall

Economic interest of company

Change from prior year or recognized in income statement

Accrued contributions for the period

Pension scheme expense in personnel expense

in CHF thousand

31.12.2021

31.12.2021

31.12.2020

31.12.2021

31.12.2021

2021

2020

USA

427

427

474

Pension schemes without funding surplus/shortfall

0

0

0

0

427

427

474

USA

– 1 356

– 1 356

– 1 157

199

0

199

479

Pension schemes with funding shortfall

– 1 356

– 1 356

– 1 157

199

0

199

479

Total

– 1 356

– 1 356

– 1 157

199

427

626

953

In the USA the CPH Group has one defined-contributions and one defined-benefits occupational pension scheme.

The 401(k) defined contribution plan is a purely contributions-based savings scheme that does not expose the company to any liability and has neither a surplus nor a shortfall.

The defined-benefits scheme was frozen on 1 January 2016. As a result, there have been no further increases in pension obligations to beneficiaries since this date, and no further beneficiaries have been admitted. The scheme had 97 members as of 31 December 2021 (prior year: 101 members). The scheme currently has a funding shortfall of USD 1 489 000 (prior year: USD 1 309 000). The calculations were made using the Current Liability Method, under which no regard is paid to future salary increases or expected investment returns.

The Group’s pension schemes in its other countries of operation are of insignificant size, and provide all the social benefits prescribed by law.

19.3 Breakdown of pension scheme costs

in CHF thousand

In Switzerland

Outside Switzerland

2021

2020

Pension scheme contributions from employers

3 824

427

4 251

4 274

Total contributions

3 824

427

4 251

4 274

+/– changes in ECR through asset development, value adjustments etc.

– 112

– 112

– 111

Contributions and changes in employer contribution reserves

3 712

427

4 139

4 163

Decrease/Increase in companies’ economic benefit from funding surplus

– 1 317

– 1 317

– 200

Decrease/Increase in companies’ economic obligation towards funding shortfall

199

199

479

Change in economic impact on companies of funding surpluses/shortfalls

– 1 317

199

– 1 118

279

Pension scheme expense as part of personnel expense for the period

2 395

626

3 021

4 442

20. Other long-term receivables

20. Other long-term receivables

Other long-term receivables consist of a CHF 21.1 million (prior year: CHF 29.6 million) remaining receivable from Canton Zurich in connection with the sale in 2016 of the former Uetikon operating site and the cost of cleaning up the adjacent lake bed (a total of CHF 32.0 million was originally retained in this regard from the sale proceeds of CHF 52.0 million). Following a downward adjustment of the originally estimated CPH share of the lake bed clean-up costs from CHF 32 million to CHF 20 million in May 2020, some CHF 12 million should be returned to CPH after the project’s completion in 2024. For further information see also Notes 26 and 28 on short-term and long-term provisions. The use of CHF 6.0 million of provisions expected in the following year (prior year: CHF 1.4 million) was reclassified as other short-term receivables.

21. Deferred tax assets

21. Deferred tax assets

The deferred tax assets for 2021 stem primarily from temporary differences deriving from an intragroup real estate transaction in 2020, which resulted in deferred tax assets of CHF 11.9 million. The remaining CHF 1.2 million (prior year: CHF 0.5 million) of this item relates to further temporary differences arising from deviations between the group consolidated value and the tax value of assets, equity and liabilities.

22. Trade accounts payable

22. Trade accounts payable

in CHF thousand

2021

2020

To third parties

84 775

56 742

To related parties and companies

12

9

Total

84 787

56 751

Trade accounts payable increased in 2021 owing to the higher product demand and the substantial rises in raw materials prices.

23. Other payables

23. Other payables

in CHF thousand

2021

2020

To third parties

3 920

4 576

To related parties and companies

0

0

Total

3 920

4 576

The change in other payables for 2021 is due to lower customer prepayments in the Chemistry Division.

24. Accrued liabilities and deferred income

24. Accrued liabilities and deferred income

in CHF thousand

2021

2020

Accrued interest expense

433

495

Income tax owed

1 266

1 561

Accrued personnel expense

5 992

6 508

Other accrued liabilities and deferred income

10 572

8 251

Total

18 263

16 815

25. Short-term financial liabilities

25. Short-term financial liabilities

in CHF thousand

2021

2020

Towards third parties

3 227

8 088

– towards banks

3 000

7 818

– financial leasing liabilities

227

270

Total

3 227

8 088

Details of short-term financial liabilities are shown in Note 27.

26. Short-term provisions

26. Short-term provisions

in CHF thousand

Environmental protection measures

Restructuring provisions

Guarantee obligations

Other provisions

Total short-term provisions

Opening balance on 1.1.2020

2 579

477

766

0

3 822

Currency impact on opening balance

– 2

– 2

Additions

711

711

Use

– 556

– 37

– 207

– 800

Releases

– 2 023

– 302

– 2 325

Reclassifications

1 925

1 925

Currency impact on movements

0

Closing balance on 31.12.2020

1 925

440

966

0

3 331

Opening balance on 1.1.2021

1 925

440

966

0

3 331

Currency impact on opening balance

– 1

– 1

Additions

242

242

Use

– 3 636

– 93

– 199

– 3 928

Releases

– 57

– 57

Reclassifications

7 786

7 786

Currency impact on movements

– 5

– 5

Closing balance on 31.12.2021

6 075

347

946

0

7 368

The environmental protection measures relate to the lake bed clean-up at the former Uetikon site and to future waste disposal site obligations (see Note 28 for further details). The provisions for the clean-up of the Rotholz waste disposal site in Meilen were released in 2020.

The restructuring provisions relate to the closure of the Uetikon site (and the associated lake bed clean-up).

The guarantee obligations stem from the Paper and Packaging divisions, and relate to any claims or entitlements arising from customer complaints.

27. Long-term financial liabilities

27. Long-term financial liabilities

2021 in CHF thousand

Current + 1 year

Current + 2 years

Current + 3 years

Current + 4 years

Current + 5 years

After + 5 years

Total 2021

Long-term bank loans

6 500

6 500

Corporate bond 1)

100 000

100 000

Financial leasing liabilities

79

16

95

Total

106 579

16

0

0

0

0

106 595

1) unsecured bond, SIX Swiss Exchange ‘CPH18’, issued 12.10.2018

2020 in CHF thousand

Current + 1 year

Current + 2 years

Current + 3 years

Current + 4 years

Current + 5 years

After + 5 years

Total 2020

Long-term bank loans

3 000

6 500

9 500

Corporate bond 1)

100 000

100 000

Financial leasing liabilities

164

82

246

Total

3 164

106 582

0

0

0

0

109 746

1) unsecured bond, SIX Swiss Exchange ‘CPH18’, issued 12.10.2018

Financial liabilities for 2021

Instrument

Currency

Amount in currency (thousand)

Amount in CHF (thousand)

Interest rate

Duration

Covenants

Short-term financial liabilities

Bank loan

CHF

1 500

2.41 

30.06.2022

1)

Bank loan

CHF

1 500

2.41 

31.12.2022

1)

Financial leasing liabilities

CHF

227

various

Total

3 227

Long-term financial liabilities

Corporate bond

CHF

100 000

2.00 

12.10.2023

Bank loan

CHF

6 500

2.41 

20.03.2023

1)

Financial leasing liabilities

CHF

95

various

Total

106 595

Total financial liabilities

109 822

1) Repayment in steps; debt ratio max. 2.5 (from 31.12.2019). The debt ratio is calculated as follows: total financial liabilities/EBITDA for the Packaging Division for the last 12 months. This requirement was still being met as of 31.12.2021.

The CPH Group also has an additional CHF 40 million credit facility with Swiss banks (until 2022/23).

Financial liabilities for 2020

Instrument

Currency

Amount in currency (thousand)

Amount in CHF (thousand)

Interest rate

Duration

Covenants

Short-term financial liabilities

Bank loan

CHF

1 500

2.41 

30.06.2021

1)

Bank loan

CHF

1 500

2.41 

31.12.2021

1)

Bank loan (PPPA Paycheck Protection Program loan, SBA USA)

USD

1 550

1 370

1.25 

open

Industrial bond

USD

3 900

3 448

4.44 

01.08.2021

Financial leasing liabilities

CHF

270

various

Total

8 088

Long-term financial liabilities

Corporate bond

CHF

100 000

2.00 

12.10.2023

Bank loan

CHF

9 500

2.41 

20.03.2023

1)

Financial leasing liabilities

CHF

246

various

Total

109 746

Total financial liabilities

117 834

1) Repayment in steps; debt ratio max. 2.5 (from 31.12.2019). The debt ratio is calculated as follows: total financial liabilities/EBITDA for the Packaging Division for the last 12 months. This requirement was still being met as of 31.12.2020.

28. Long-term provisions

28. Long-term provisions

in CHF thousand

Major repairs and renovations

Environmental protection measures

Other provisions

Deferred tax liabilities

Total long-term provisions

Opening balance on 1.1.2020

3 702

35 156

1 943

6 667

47 468

Currency impact on opening balance

– 1

– 72

– 73

Additions

339

339

Use

– 294

– 294

Releases

– 12 000

– 1 755

– 227

– 13 982

Reclassifications

– 1 925

– 1 925

Currency impact on movements

– 1

1

0

Closing balance on 31.12.2020

3 702

20 937

186

6 708

31 533

Opening balance on 1.1.2021

3 702

20 937

186

6 708

31 533

Currency impact on opening balance

– 8

– 84

– 92

Additions

8

632

640

Use

0

Releases

– 154

– 23

– 177

Reclassifications

– 7 786

– 7 786

Currency impact on movements

6

1

7

Closing balance on 31.12.2021

3 702

13 151

38

7 234

24 125

The provisions for major repairs and renovations relate to the work required on the Perlen weir. The corresponding project has been approved by Canton Lucerne, enabling the work to be performed in the next few years.

Environmental risks arise as a result of the Group’s business activities.

In connection with the CHF 52.0 million sale of the Uetikon operating site in 2016, provisions of CHF 32.0 million (80 % of the CHF 40.0 million estimated total costs) were made at the time for CPH’s share in the expense of cleaning up the adjacent lake bed. The remaining 20 % of these costs are being met by Canton Zurich. Since the site’s sale was concluded, a pilot project and inspections were conducted for the planned lake bed clean-up between 2016 and 2018. A tender invitation for the clean-up work was issued in 2019, and a study was also commissioned on the options available. In May 2020 Canton Zurich awarded the commission for the work to a general contractor. As a result of this, the Canton now expects the total cost of this work to be CHF 25.0 million, of which 80 % or CHF 20.0 million will be borne by the CPH Group. In view of this, the corresponding provisions were reduced by CHF 12.0 million, in the form of extraordinary income, in May 2020. The clean-up work commenced in November 2021, and will take around two to three years. The corresponding provisions amounted to CHF 15.4 million at the end of 2021 (prior year: CHF 19.0 million), of which CHF 6.0 million are short-term provisions and CHF 9.4 million are long-term provisions.

The further CHF 3.8 million of provisions for environmental protection measures (CHF 0.1 million short-term, CHF 3.7 million long-term) relate to future waste disposal site running cost obligations and a possible transfer thereof to the Canton Zurich Waste Disposal Site Aftercare Fund.

‘Other provisions’ include provisions for personnel-related obligations in Germany.

All provision amounts expected to be paid in the following year are reclassified as short-term provisions (see Note 26).

29. Purchase of business activities and minority shareholdings

29. Purchase of business activities and minority shareholdings

The CPH Group acquired no significant business activities in 2021.

In the previous year Perlen Packaging AG had acquired the remaining 40 % of the capital of Perlen Packaging Anápolis Indústria e Comércio Ltda., Anápolis, State of Goia (Brazil) on 4 December 2020. The consideration amounted to CHF 1.6 million, of which CHF 0.3 million was taken to minorities and CHF 1.3 million to goodwill.

30. Additional corporate governance information

30. Additional corporate governance information

30.1 Capital structure

2021

2020

Share capital in CHF thousand

1 200

1 200

Registered shares issued

6 000 000

6 000 000

Nominal value per share in CHF

0.2

0.2

Market capitalization in CHF thousand

366 000

435 600

The registered shares of CPH Chemie + Papier Holding AG are listed on the SIX Swiss Exchange in the Swiss Reporting Standard segment. The company’s share capital amounts to CHF 1.2 million and is fully paid in. The share capital consists of 6 000 000 registered shares with a nominal value of CHF 0.20 each.

30.2 Transactions with related parties and companies

All balances and business transactions between companies within the scope of consolidation were eliminated during consolidation and are not shown here. As in the previous year, all transactions with related parties and companies in 2021 were conducted at market rates. The following transactions were effected for services rendered with companies associated with the CPH Group and members of its Board of Directors:

in CHF thousand

2021

2020

UBV Immobilien Treuhand Perlen AG, Root

99

UBV Immobilien Treuhand AG, Uetikon

12

0

Niederer Kraft Frey AG (Manuel Werder)

56

20

Weber Schaub & Partner (Peter Schaub)

66

42

Total transactions

134

161

Total open liabilities at year-end

12

9

As in the previous year, no loans or credits were granted to related parties in 2021.

UBV Immobilien Treuhand Perlen AG, Root/CH was integrated into CPH Immobilien AG, Root/CH by merger on 22 November 2021.

Uetikon Industrieholding AG, which had previously been the main shareholder of CPH Chemie + Papier Holding AG with a holding of 49.99 %, was acquired by the latter through a merger by absorption effective 11 June 2021. Under the merger transaction, the previous shareholders of Uetikon Industrieholding AG exchanged their shares therein for a commensurate number of shares of CPH Chemie + Papier Holding AG, and have thence held direct CPH shareholdings. Under the merger agreement, further assets and liabilities of a net value of CHF 0.2 million were also acquired for a payment of CHF 0.2 million.

30.2.1 Shares held by members of the Board of Directors and Group Executive Management

Shares held by members of the Board of Directors (including related parties):

Number of shares

2021

Member

Own

Related parties

Total

2020

Peter Schaub

833

1 233

2 066

400

Tim Talaat

10 806

134 736

145 542

52 216

Manuel Werder

34 698

93 649

128 347

50 020

Christian Wipf

400

0

400

400

Total

46 737

229 618

276 355

103 036

Shares held by members of Group Executive Management (including related parties):

Number of shares

2021 shares vested until

Member

2023

2024

2021

2020

Peter Schildknecht

793

894

1 887

993

Gerold Brütsch

0

0

0

0

Klemens Gottstein

397

447

844

397

Wolfgang Grimm

397

447

904

457

Richard Unterhuber

397

447

1 094

647

Alois Waldburg-Zeil

397

447

1 244

797

Total

2 381

2 682

5 973

3 291

CPH Chemie + Papier Holding AG introduced a long-term incentive (LTI) programme for the members of its Group Executive Management in 2020. The general contractual foundations and the vesting conditions thereof are detailed in the Remuneration Report. A total of 2 682 shares (prior year: 2 381 shares) with a vesting period of three years were awarded under the programme in 2021.

30.2.2 Significant shareholders and numbers of shares held

Name

2021

2020

Uetikon Industrieholding AG

2 999 800

Swiss Industrial Finance AG*

889 946

90 000

Ella Schnorf-Schmid estate*

1 124 989

429 320

J. Safra Sarasin Investmentfonds AG

300 250

300 250

Total

2 315 185

3 819 370

* linked through a shareholders’ agreement

31. Net financial liabilities

31. Net financial liabilities

in CHF thousand

2021

2020

Liquid funds and securities

95 116

116 285

Short-term financial receivables

75

0

Total liquid funds and financial receivables

95 191

116 285

Short-term financial liabilities to banks

3 000

7 818

Short-term financial leasing and other liabilities

227

270

Total short-term financial liabilities

3 227

8 088

Corporate bonds

100 000

100 000

Long-term financial liabilities to banks

6 500

9 500

Long-term financial leasing and other liabilities

95

246

Total long-term financial liabilities

106 595

109 746

Net debt

14 631

1 549

EBITDA

25 718

55 151

Net debt to EBITDA ratio

0.6

0.0

32. Contingent liabilities and off-balance-sheet business

32. Contingent liabilities and off-balance-sheet business

32.1 Contingent liabilities

As in the prior year, there were no guarantees towards third parties as of 31 December 2021.

32.2 Pledged assets

Real estate of Jiangsu Zeochem Technology Co. Ltd., China with a book value of CHF 3.3 million (prior year: CHF 3.2 million) was subject to a CHF 3.1 million (prior year: CHF 3.0 million) lien as at 31 December 2021. Liquid funds with a value of CHF 0.6 million (prior year: CHF 0.7 million) are pledged.

32.3 Other off-balance-sheet obligations

Operating lease agreements with notice periods of more than one year amounted to CHF 0.9 million (prior year: CHF 0.8 million), and relate mainly to vehicle leases. They show the following maturities:

in CHF thousand

2021

2020

Less than 1 year

549

421

1 to 5 years

340

330

More than 5 years

0

0

Total

889

751

Off-balance-sheet obligations relating to rental agreements amounted to CHF 6.1 million (prior year: CHF 4.0 million), and relate largely to rental agreements in Rüti (Switzerland), Utzenstorf (Switzerland), Whippany (USA) and Anápolis (Brazil). They show the following maturities:

in CHF thousand

2021

2020

Less than 1 year

1 368

1 159

1 to 5 years

4 102

2 788

More than 5 years

631

100

Total

6 101

4 047

Purchase obligations for the acquisition of tangible fixed assets and intangible assets totalled CHF 19.0 million as at 31 December 2021 (prior year: CHF 12.3 million).

32.4 Derivative financial instruments and foreign-currency hedges

As in the prior year, no derivative financial instruments subject to balance sheet reporting were held as at 31 December 2021.

Open foreign-currency hedges as at 31 December 2021

in CHF thousand

2021

2020

Instrument

Contract value

Positive replacement value

Negative replacement value

Purpose

Contract value

Positive replacement value

Negative replacement value

Purpose

Forward foreign-exchange contracts in EUR

100 932

3 685

0

Cash flow hedge

91 888

0

1 392

Cash flow hedge

Forward foreign-exchange contracts in USD

7 594

20

79

Cash flow hedge

9 726

533

0

Cash flow hedge

Total

108 526

3 705

79

Cash flow hedge

101 614

533

1 392

Cash flow hedge

The open foreign-currency hedges are forward contracts designed to secure future cash flows.

33. Net result per share

33. Net result per share

Net result per share is calculated by dividing the net result for the year by the average number of shares entitled to dividend issued, less any treasury shares. The company held an average of 188 treasury shares in 2021 (prior year: 474 shares). Since no authorized or conditional capital is currently outstanding, diluted net result per share is identical to the net result per share amount.

2021

2020

Net result as per consolidated income statement (in CHF thousand) after minorities

– 151 559

46 901

Weighted average number of shares entitled to dividend

5 999 812

5 999 526

Net result per share (in CHF)

– 25.26

7.82

34. Treasury shares

34. Treasury shares

2021

2020

Number

Transaction price (CHF)

Value (CHF thousand)

Number

Transaction price (CHF)

Value (CHF thousand)

Opening balance on 1.1

376

72.61

27

572

79.20

45

Purchased

5 593

70.45

394

21 438

71.97

1 543

Sold

3 287

71.49

– 235

19 253

70.38

– 1 355

Share-based compensation

2 682

66.80

– 180

2 381

75.75

– 180

Profit/loss

– 6

– 26

Closing balance on 31.12

0

0

376

72.61

27

The company held no treasury shares at the end of 2021 (prior year: 376 shares).

A total of 5 593 treasury shares were purchased on the SIX Swiss Exchange in the course of 2021 (prior year: 21 438 shares) at an average purchase price of CHF 70.45 (prior year: CHF 71.97) per share. A total of 3 287 treasury shares were sold via the SIX Swiss Exchange in the course of 2021 (prior year: 19 253 shares) at an average sale price of CHF 71.49 (prior year: CHF 70.38) per share. A total of 2 682 shares with a vesting period of three years were awarded in 2021 in the form of share-based compensation.

35. Subsequent events

35. Subsequent events

No significant events occurred between 31 December 2021 and 11 February 2022 which would require adjustments to the book values of the Group’s assets, equity and liabilities or would need to be divulged here. There are also no exceptional pending business items or risks which would need to be mentioned in the income statement.

In response to a cyber attack, the IT systems of the CPH Group were shut down in a controlled manner on 7 January 2022 and production had to be halted at the Perlen and Müllheim sites. Once the key IT systems were back in operation, production was resumed at the sites concerned in the course of 13 January 2022. The CPH Group does not expect this incident to have any material impact on its 2022 business results.

The Board of Directors approved these consolidated financial statements at its meeting of 11 February 2022. They are also subject to the approval of the Ordinary General Meeting of 17 March 2022.