©2006 mobilezone holding ag

Transcription

Annual report mobilezone holding ag
2005
Credits
Copy : mobilezone holding ag
Editing : Christoph Zurfluh, Baar
Design : Af IT, Buergi & Partner, Oberglatt ZH
Photos : Marcel Studer, Zurich ( portraits );
Peter Dotzauer, Henau ( BD / GM ) ; Archive mobilezone
Printing : Druckerei Horisberger, Regensdorf ZH
Information : Current information
from press conferences and publications on the website
www.mobilezone.ch
Link : corporate homepage mobilezone holding ag
This annual report is a translation of the original
version in German. The English translation is only available
in form of a pdf-file from the corporate homepage.
© 2006
mobilezone holding ag
ANNUAL
REPORT 2005
A CROSS THE SKIES .
Simply lifting off and floating.
Somewhere between heaven and earth. But those who
want to fly should never lose their bearings.
O SKY S TEINER ( 43 ) ,
HELICOPTER PILOT AND BASE LEADER IN
P FAFFNAU
M OTOROLA A 780 ,
CO - PILOT AT MOBILEZONE
ANNUAL
REPORT
2005
Table of contents
Course of business
Chairman’s report
5
Key figures at a glance
7
Corporate governance / governing bodies
9
mobilezone
17
globalzone
21
Europea Trade
21
mobilezone net
22
Outlook –
consulting competence becoming ever more important
25
Financial report
Table of contents
29
List of mobilezone outlets
64
Annual report 2005 mobilezone holding ag
3
C OLLECTOR ’S ITEM .
Every working day a sweet temptation.
To sell something, you have to love it. Who can
resist you then ?
C ARLA B ÜRGI ( 20 ) ,
SALES PRO IN
Z URICH
S IEMENS CL 75 ,
BIG SELLER AT MOBILEZONE
mobilezone Group
For the first time
mobilezone
will distribute
dividends
C H A I R M A N ’S
espite a disappointing first half of 2005,
mobilezone can look back on a good
second half of the year and a brisk Christmas
trade. Retail sales – the Group’s core business
area – grew by more than 7 percent. However,
the last year’s excellent result could not be
achieved again. Nevertheless, we consider the
Group’s consolidated result of CHF 15.4 million
( previous year: CHF 16.7 million ) very positive,
and for that reason the Board of Directors for
the first time will ask the General Meeting for a
dividend distribution of CHF 0.25 per share.
D
Due to the elimination of the business activities in Germany ( previous year: CHF 20.6 million ) and a decrease in wholesale business
by ca. CHF 19 million, the resulting consolidated gross sales for 2005 are lower and
amount to CHF 261.8 million ( previous year:
CHF 288.7 million ). Reduced cost contributions from business partners and higher
personnel and leasing costs led to a decrease
in the operating result ( EBIT ) by 3.6 % to
CHF 18.8 million (previous year: CHF 19.5 million). The decrease of the operating cash flow
to CHF 6.8 million ( previous year: CHF 19.9 million ) is largely due to high balances of receivables due from the network operators at
the end of the reporting year. This is a direct
result of significantly stronger Christmas
sales than in the previous year.
As in previous years, in the reporting year
many existing locations were improved, and
the number of stores was expanded to a
current total of 104 outlets. Although this development has resulted in higher personnel and
leasing costs in this fiscal year, in the future
it will lead to an increase in sales and income.
In the current year, too, mobilezone plans
to open outlets in new locations. Bulle and
Brugg were added this past year to the mobilezone network of shops as new regions.
In 2006, new outlets are planned for the shop-
REPORT
ping center Balexert ( Geneva ) and for Mythen
Center ( Ibach, Schwyz ).
In the past year mobilezone worked particularly
intensively on the project service providing
( MVNO ). The cooperation agreement with
Orange Communications AG made it possible
to launch an initial offer in January 2006.
The division mobilezone net ag was established
to handle this new business activity.
As expected, more new products have
been announced for 2006 than ever before.
Improved cameras ( with a resolution of up
to 8 megapixels ) and considerably improved sound quality ( MP 3, iPod ) combined
with even larger memory capacity
( up to 3 gigabytes ) will continue to keep
the demand for mobile phones high.
In addition, the expansion of UMTS networks
by all three network operators ( Swisscom,
Orange, and Sunrise ) has made live-TV reception on cell phones a reality. For the coming
year, mobilezone expects that particularly
the Soccer World Cup in Germany will generate demand for live-TV devices.
On the whole, mobilezone is convinced that
the sales and income of fiscal year 2005
can be improved in 2006 and that its strong
market position can be maintained. The
company’s high degree of specialization and
its outstanding, dedicated staff will make it
possible to achieve these ambitious goals.
Charles Gebhard
Ruedi Baer
Chairman of the Board
Delegate and CEO
5
C OMMUNICATOR .
Communicating properly means to find ways
and means to touch people. Only what is retained will
have a lasting effect.
P AUL W IDMER ( 58 ) , ACTING
HEAD OF A PUBLISHING HOUSE IN
Q TEK 9100 ,
Z URICH
COMMUNICATOR AT MOBILEZONE
mobilezone Group
Facts & figures
KEY
Key figures
F I G U R E S AT A G L A N C E
2005
2004
%
261,831
243,590
22,524
18,831
7.7
15,408
6.3
288,709
268,920
23,387
19,487
7.2
16,728
6.2
%
76,890
14,485
45,698
59.4
81,670
24,593
41,783
51.2
6,799
3,783
19,855
3,357
317
104
309
101
%
1,250
33,586
27,306
81.3
10,505
49,063
47,774
97.4
Piece
Piece
CHF
CHF
CHF
CHF
35,952,000
35,765,006
0.43
0.43
1. 28
0.25
35,437,000
36,853,145
0.47
0.46
1.13
0
CHF
CHF
5.68 / 3.70
5.45
4.78 / 2.26
4.19
( in CHF ’000 or as noted, respectively )
from the
mobilezone Group
financial report
Gross sales revenues
Net sales
Operating profit before depreciation & amortization ( EBITDA )
Operating profit before interest & tax ( EBIT )
( As a percentage of net sales )
Net profit
( As a percentage of net sales )
Total assets
Net cash ( cash & cash equivalents )
Shareholders’ equity
( As a percentage of total assets )
%
Net cash provided by operating activities
Investment in property, plant & equipment, and intangible assets
Number of employees ( FTE’s ) as of December 31
Number of shops as of December 31
Net profit
Total assets
Shareholder’s equity
( As a percentage of total assets )
Share information
Weighted average number of shares outstanding
Number of shares outstanding as of balance sheet date
Earnings per share
Earnings per share ( diluted )
Shareholders’ equity per share
Dividend per share 1
Share price ( highest / lowest )
Share price on December 31
1
2005: According to the Board of Directors’ request to the General Meeting of April 13, 2006.
7
R OLE - PLAYER .
Taking part in the Basel carnival costs more
than a smile. It takes a lot of work and practice –
and under each mask a little star.
B ENJAMIN S TÄHLI (13) ,
STAR OF A CLIQUE IN
B ASEL
N OKIA 6101,
CELL PHONE STAR AT MOBILEZONE
mobilezone Group
C O R P O R AT E
Information
1. Group structure and shareholders
on Corporate
1.1 Group structure
The mobilezone Group consists of two business
areas: Commerce ( mobilezone ag and Europea
Trade AG ) and Fixed Line ( globalzone ag and
mobilezone international ag ). In January 2006
mobilezone net ag launched its business
activity as provider of its own mobile communications subscription. A list of consolidated
companies is provided in Note 2 to the
appendix to the mobilezone holding ag annual
report. The parent company is mobilezone
holding ag, Riedthofstrasse 124, 8105 Regensdorf, Switzerland. It is listed on the Swiss
Exchange SWX ( Valor no.: 1258340, ISIN :
CH 0012583404). As of December 31, 2005,
the market capitalization ( excluding own
stock ) was CHF 195.0 million.
Governance
pursuant to
Swiss Exchange
( SWX )
guidelines
1. 2 Significant shareholders
A list of significant shareholders is provided in
Note 3 to the appendix to the mobilezone
holding ag annual report. There is no shareholder’s agreement between the significant
shareholders.
GOVERNANCE
of the issue of equities are set forth in Articles
36 and 37 of the Articles of Association. The
current Articles of Association may be viewed
at any time at www.mobilezoneholding.ch
under the heading “Corporate Governance”.
2. 3 Changes in capital
Changes in capital made in the past three
years are listed in the consolidated
equity statement on page 33 and on page 31
of the previous year’s annual report.
2. 4 Shares and participation certificates
As of December 31, 2005, there were
35,772,996 bearer shares with a par value of
CHF 0.01. Of these, 7, 990 shares were the
Group’s own holdings. The shares in the
Group’s own holdings carry neither voting nor
dividend rights. All other shares carry equal
voting and dividend rights.
2. 5 Profit-sharing certificates
There are no profit-sharing certificates.
2.6 Limitations on transferability
and nominee registrations
Not applicable, as only bearer shares exist.
1. 3 Cross-shareholdings
There are no cross-shareholdings.
2. 7 Convertible bonds and warrants / options
As of the balance sheet date, there were no
convertible bonds or options issued by Group
companies outstanding.
2. Capital structure
2.1 Capital
The amount of ordinary, authorized, and
conditional capital is shown in Note 3
to the mobilezone holding ag single financial
statements.
2. 2 Authorized and conditional capital
in particular
Details regarding the amount of the increase
in authorized and conditional capital, the group
of beneficiaries, and the terms and conditions
9
mobilezone Group
3. Board of Directors
3.1 Members of the Board of Directors
Charles Gebhard,
Chairman
Ruedi Baer,
Delegate
Walter Heutschi
Michael R. Kloter
Hans-Ulrich Lehmann
10
3.2 Other activities and vested interests
All information regarding office terms,
nationality, curricula vitae, and other activities
as well as vested interests can be found at
www.mobilezoneholding.ch, under the
heading “Corporate Governance / Directors
and Group management.” Rudolf Baer is
CEO and chairman of mobilezone’s Group
management. Currently, no other members of
the Board of Directors hold executive positions in the Group’s companies, nor have they
held such positions during the past three
years. Rudolf Baer and Hans-Ulrich
Lehmann had business relationships with
some of the Group’s companies in the
last year through companies they controlled (see Note 22 in the appendix to the
consolidated financial statements).
3. 3 Cross-involvement
There is no cross-involvement with the
Boards of other companies listed on
the Stock Exchange.
3. 4 Elections and terms of office
The Board of Directors is elected by the
General Meeting of Shareholders
for a one-year term. Unlimited reelection is possible.
C O R P O R AT E
Board of Directors /
Group management
( from left to right ) :
Hans-Ulrich Lehmann
Ruedi Baer
Charles Gebhard
Michael R. Kloter
Walter Heutschi
Wolfgang Gross
3. 5 Internal organizational structure
Charles Gebhard is Chairman and Rudolf Baer
is the Delegate of the Board of Directors.
The individual members have no other positions, and there are no committees. The Board
of Directors meets as often as required by
business but at least three times a year.
Last year six meetings were held ; usually they
lasted half a day.
Werner Waldburger
Martin Lehmann
3. 6 Definition of areas of responsibility
To the extent allowed by law, the Board of
Directors has delegated managerial functions
to the Group management. The breakdown
of tasks and competencies is established
in the bylaws and rules of organization in the
form of a detailed chart.
GOVERNANCE
/ GOVERNING
BODIES
3.7 Information and control instruments
vis-à-vis the Group management
Each member of the Board of Directors has
the right to be informed about the course
of business by the Group management, even
outside of official meetings, and, subject
to the Chairman’s authorization, to be also
informed about individual transactions.
The information and control tools that the
Board of Directors uses vis-à-vis the
Group management include the following:
• Consolidated budget ( annual )
• Quarterly reports
( incl. comparison with budget )
• Profit and loss forecast
( beginning in the 3rd quarter )
• Financial projections (in every meeting )
• Detailed reports of the Group management on the course of business
( in every meeting )
4. Group management
4.1 Members of the Group management
Ruedi Baer, CEO
Wolfgang Gross, CFO
Martin Lehmann, Sales Manager
Werner Waldburger, COO Switzerland
4. 2 Other activities
and vested interests
All information regarding nationality, education, professional background, and other
activities and vested interests can be found
at www.mobilezoneholding.ch, under the
heading “Corporate Governance / Directors
and Group management”.
11
mobilezone Group
Former members
of governing bodies
4. 3 Management contracts
There are no management contracts
regarding the transfer of managerial functions
to third parties.
did not receive
any compensation
5. Compensations, shareholdings,
and loans
in 2005
5.1 Content and method of determining
the compensation and
the shareholding programs
The members of the Board of Directors
receive compensation independent of profits
in an amount set by the Board of Directors.
In addition, the Board may award a bonus if
the course of business warrants it. The Board
of Directors determines the compensation
of Group management at the request of
the CEO. The Board of Directors determines
the CEO’s total compensation.
There are no profit-sharing programs.
5. 2 Compensations for acting members
of governing bodies
Total compensation paid to the executive
member of the Board of Directors and
members of Group management amounted
to CHF 1,522,000. Total compensation
paid to non-executive members of the Board
of Directors during the reporting year
was CHF 165,000. No severance payments
were made to departing members of
any of the governing bodies during the
reporting year.
C O R P O R AT E
GOVERNANCE
5. 5 Share ownership
As of December 31, 2005, the executive
member of the Board of Directors and members
of Group management and parties
closely linked to them held a total of
3,823,833 shares in mobilezone holding ag.
The non-executive members of the
Board of Directors and parties closely linked
to them held 5,855,600 shares.
5. 6 Options
As of December 31, 2005, there were
no options.
5.7 Additional fees and remunerations
In fiscal year 2005, the law firm
Kloter Attorneys-at-Law, in which the
Board member Michael Kloter is a partner,
invoiced the Group’s companies for fees
totaling CHF 140,700.
5. 8 Loans granted by governing bodies
There are no loans or securities for
loans to the members of the Board and
management, or to parties closely linked
to them.
5. 9 Highest total compensation
The member of the Board of Directors with
the highest total compensation was paid
CHF 810,000 during the reporting year.
This member was not allocated any shares
or options during the reporting year.
6. Shareholders’ participation
5. 3 Compensations for former members
of governing bodies
No compensation was paid to former members
of governing bodies.
5. 4 Share allotments in the reporting year
No shares were allocated to members of governing bodies or parties closely linked to them.
12
6.1 Restrictions on voting rights
and representation
There are no restrictions on voting rights,
and the rules in the Articles of Association
regarding participation in the General
Meeting of Shareholders do not deviate
from those mandated by law.
PAINTING WITH SOUND .
Discover worlds of sound. And create new ones.
Let yourself be swept away. And carry away others. Music
opens up new dimensions. For all.
U RS S TUCKI ( 24 ) ,
S ONY E RICSSON W 800 i ,
PROFESSIONAL MUSICIAN FROM
HOBBY MUSICIAN AT MOBILEZONE
E MMEN mobilezone Group
Every year
the mobilezone
Group publishes
an annual and
a semi-annual
report
6. 2 Statutory quorums
There are no statutory voting quorums that
deviate from those mandated by law.
6. 3 Convocation of the General Meeting
of Shareholders
There are no statutory rules on convening the
General Meeting of Shareholders that deviate
from those mandated by law.
C O R P O R AT E G OV E R N A N C E
8. 3 Additional fees
In the past year, KPMG did not invoice fees
for any additional services such as tax and
business consulting.
6. 4 Agenda
The procedures for adding items to the agenda
are in accordance with the legal requirements.
8. 4 Supervisory and control instruments
pertaining to the audit
Once a year the chairman of the Board of
Directors or another, non-executive member
attends KPMG Fides Peat’s concluding
discussion of the Group audit. The auditor
reports the findings from its audit in a report
to the Delegate of the Board of Directors.
6. 5 Inscriptions into the share register
Not applicable, as only bearer shares exist.
9. Information policy
7. Changes of control and
defense measures
7.1 Duty to make an offer
There is an opting-out regulation.
7. 2 Clauses on changes of control
There are no change-of-control clauses.
8. Auditors
Every year the mobilezone Group publishes
an annual and a semi-annual report pursuant
to IFRS ( International Financial Reporting
Standards ) rules. Additional information
on important changes and essential business
activities is published on an ad-hoc basis.
All information, including a list of contact
addresses, is available at
www.mobilezoneholding.ch under
the heading “Media / Press Room”.
Anyone who wishes to receive mobilezone’s
media information can register there under
the heading “E-mail Service”.
8.1 Duration of the mandate
and term of office of the lead auditor
Since fiscal year 2000, KPMG Fides Peat has
been the auditor of the Group’s Swiss companies, and since fiscal year 2001, when the
new holding structure was introduced, KPMG
Fides Peat has also prepared the consolidated
audit report for mobilezone holding ag.
The lead auditor has been responsible for the
auditing mandate since fiscal year 2000.
8. 2 Auditing fees
In the past year, KPMG invoiced CHF 135,500
for auditing fees.
14
Always up-to-date :
Latest information is available under
www.mobilezoneholding.ch
WORKING EXPERIENCE .
Hands-on living, even if it means getting dirty hands.
Being there for your customers and always doing your best.
Because reliability pays off in the end.
R OBERTO T OTO ( 22 ) ,
MECHANIC IN
B UTTWIL
S AMSUNG SGH - E 720 ,
ALL - ROUNDER AT MOBILEZONE
E NCHANTING COLORS .
Making visible what one doesn’t see. Showing it in
a new, unfamiliar way. Art does not merely reproduce. It creates
something new. For example, with a thousand colors.
P ETRA A MERELL ( 43 ) , ART
PAINTER IN
M UNICH
AND
Z URICH
M OTOROLA V3 RAZR , ARTWORK
AT MOBILEZONE
mobilezone
CONTINUING
mobilezone
A S M O S T I M P O RTA N T PA RT N E R F O R P R OV I D E R S
t the end of 2005, mobilezone already had
more than 104 outlets. The third flagship
store was opened during the reporting year in
the shopping center Letzipark in Zurich, and new
outlets were opened at locations of the MigrosGenossenschaft Aare in Burgdorf and Buchs.
A
is also
becoming the
most important
The search for new and improved locations
will continue in 2006 as before. In January two
new locations were already added when the
new outlets in Bulle and Brugg were opened.
In the first quarter the outlets in Chur, Fribourg,
and Neuenburg will move to better locations.
In addition, mobilezone for the first time will
also have a presence in the shopping centers
Balexert ( Geneva ) and Mythencenter ( Schwyz )
as well as on the Via Nassa in Lugano.
partner for
contract
extensions
Market shares of providers *
• Swisscom Shops
• mobilezone
•
•
•
•
•
•
•
•
Orange Shops
Interdiscount
The Phone House
Sunrise Shops
Migros
Die Post
Media Markt
Other
32 %
29 %
8%
7%
7%
4%
4%
3%
3%
3%
* An estimated 1.8 million
cell phones sold,
not including direct business
clients of network operators
Marketing and advertising
As before, mobilezone’s catalogs continued
to be the focal point for advertising in 2005
and are now published with a print run of three
million copies. In the reporting year mobilezone for the first time also distributed twelve
smaller additional catalogs. This marks
mobilezone’s growing and successful presence in the cell phone market.
344,950 contracts for the network operators
Swisscom Mobile, Orange, and Sunrise,
an increase of 13 percent compared to the
previous year.
Compared to the development in neighboring
countries, UMTS – broadband, live-TV, etc. –
grew more slowly here. Nevertheless, following
Swisscom Mobile’s lead, Orange and Sunrise
also expanded their UMTS networks in 2005.
In fall, the first “no frills” prepaid offers
were launched on the Swiss market, namely,
“M-Budget” (Swisscom Mobile) and “Coop
Mobile” (Orange). While this led to a large
number of units being sold – some of them
Brand shares in 2005 at mobilezone
•
•
•
•
•
•
•
•
•
Providers
As before, mobilezone continued to be the
most important independent partner of all three
network operators in 2005. Now mobilezone
is also the most important partner for contract
extensions. In total, mobilezone concluded
(quantity )
Nokia
Samsung
Motorola
Sony Ericsson
Siemens
Sharp
Sagem
LG
Panasonic
39, 4 %
23, 8 %
13, 4 %
12, 6 %
6, 2%
3,1%
0, 8%
0, 4%
0, 3%
Brand shares in 2005 at mobilezone
( value )
•
•
•
•
•
•
•
•
•
Nokia
Samsung
Sony Ericsson
Motorola
Sharp
Siemens
Panasonic
LG
Sagem
37, 3 %
32, 0 %
13, 7 %
10, 4 %
3, 8 %
2,1%
0, 3%
0, 2%
0, 2%
17
mobilezone
More than
500,000
cell phones sold
cell phones at rock-bottom prices – in terms
of value this had hardly any impact on the market. Even though prepaid is not mobilezone’s
core business, in cooperation with yallo
(a subsidiary of Sunrise) a low-price prepaid
offer was implemented.
speak for
mobilezone’s
consulting
competence
In 2005 mobilezone prepared for its new
role as service provider ( MVNO ), and in
January 2006 the company began offering
its own subscriptions ( see also page 22 /
mobilezone net ) and is thus the first Swiss
service provider.
Range
While all manufacturers again increased the
number of new cell phone models they
offer, the demands on storage and logistics
have also grown. Since there are more and
more preprogrammed cell phones – especially
in the area of UMTS – every model must be
offered in several configurations and, to some
extent, also in several languages. The total
of 525,000 cell phones sold in 2005 constitutes an increase in sales of 4.2 percent over
the previous year.
Services
In fiscal year 2005 a total of 52,165 repairs
were carried out. Thanks to the excellent
technical know-how of its consultants,
mobilezone is increasingly being asked to
repair even cell phones that were purchased
elsewhere. This builds customer loyalty,
from which mobilezone is highly likely
to benefit directly when customers buy their
next cell phone.
Accessories
Cell phones not only offer increasingly better
sound quality, but also include digital cameras that take pictures of outstanding quality.
It is thus only logical that mobilezone now
also sells photo printers and the required con-
18
S EAL
L IVE AT THE M OBILE AWARD 2004
CEREMONY IN R EGENSDORF
sumables. A strong revenue increase also
came from the sale of memory cards ; however,
the prices in this segment are steadily falling.
Staff, training, and continuing education
As of December 31, 2005, mobilezone had
317 full-time employees ( previous year : 309 ).
In connection with the location optimization
and the new, larger outlets, personnel costs
rose. In 2005 sales personnel was increasingly
trained in cooperation with manufacturers
and network operators. This allows mobilezone
to provide its customers with even better
advice and consultation regarding new technical functions.
IT and logistics
Cooperation with a new logistics partner has
led to a cost reduction and at the same
time also to quality improvement. In the area
of IT, projects were developed to expand the
NETWORK
OF OUTLETS CONTINUES TO BE OPTIMIZED
POS terminals. For the first six months
of 2006, investments are planned
that will allow mobilezone to charge the
prepaid cards of all network operators
electronically with the EFT/ POS devices.
Outlets opened in 2005
•
•
•
•
•
•
•
•
•
•
•
“mobile awards 2004”
The gathering of the mobile communications industry was again a resounding
success in 2005 – not only because
of the eight “mobile awards” the
presenter, Kurt Aeschbacher,
awarded on the occasion, but also because
of the performance
of the English soul star
Seal, who literally rocked
the large auditorium
of the Mövenpick Hotel in
Regensdorf.
Outlets closed in 2005
•
•
•
•
•
•
•
Schaffhausen
•
•
•
•
•
•
•
•
•
•
•
•
•
•
Closures planned in 2006
St. Margrethen
Baden
St. Gallen
Regensdorf
Delémont
Zürich
Rapperswil
Solothurn
•
•
•
•
•
Chur, Bahnhofstrasse
Fribourg, Rue de Romont 6
Geneva, Place du Molard
Kriens, Einkaufszentrum Hofmatt
Neuchâtel, Rue du Seyon 5
Zug
Biel/Bienne
La Chaux-de-Fonds
Brugg, Zürcherstrasse Neumarktplatz
Buchs, Einkaufszentrum Wynecenter
Chur, Einkaufszentrum CityShop
Bulle, Grand-Rue
Fribourg, Rue de Romont 12
Geneva, Einkaufszentrum Balexert
Glarus
Kriens, Einkaufszentrum Pilatusmarkt
Lugano, Via Nassa
Neuchâtel, Rue du Seyon 6
Oftringen, Einkaufszentrum A1
Sarnen, Sarnen-Center
Schwyz, Mythen-Center
Wettingen, Zentrumsplatz
Kreuzlingen
Frauenfeld
Winterthur
Aarau
Brig, Rhonesandstrasse
Geneva, Rue Rousseau
St. Gallen, Hauptbahnhof
St. Gallen, Neugasse
Vevey, Rue du Simplon
Yverdon-les-Bains, Centre Bel-Air
Zurich, Kasernenstrasse
Openings planned in 2006
mobilezone outlets in April 2006
Basel
Bachenbülach, Migros Zentrum
Brig, Bahnhofstrasse
Burgdorf, Neumarkt
Geneva-Carouge, Einkaufszentrum La Praille
Frauenfeld, Einkaufszentrum Passage
Pfäffikon, Seedamm-Center
Schaffhausen, Herblinger Markt
Steinhausen, Einkaufszentrum Zugerland
St. Gallen, Multergasse ( flagship store )
Villars-sur-Glâne, Centre Carrefour
Zurich, Letzipark ( flagship store )
Luzern
Bern
Neuchâtel
Fribourg
Yverdon
Chur
Thun
Lausanne
Nyon
Montreux
52 outlets in city centers
Sierre
Genève
53 outlets in shopping centers
Bellinzona
Martigny
2 shop-in-shop outlets
Locarno
Outlet addresses on page 64
19
E MERGENCY ASSISTANCE .
Almost 4,000 children were born with her help.
And throughout her fulfilling life she was where she
was needed. For God’s reward.
D EACONESS S R . E LISA ( 89 ) ,
RETIRED DISTRICT NURSE IN
U NTERÄGERI
M OTOROLA P EBL U6 ,
ON DUTY AT MOBILEZONE
globalzone
THE
Price reductions
P R E V I O U S Y E A R ’ S P O S I T I V E R E S U LT W A S M A I N T A I N E D
globalzone ag
For globalzone ag 2005 was an eventful
year. Due to the sale of parts of SOLPA,
globalzone’s partner in the fixed-line segment, to Cablecom, a new provider of
fixed-line services had to be found. After
an intensive evaluation phase, globalzone
chose COLT Telecom AG.
led to a loss
in sales but not
in profit
cally reduced. In addition, in many countries
the high capacity of fiber-optic connections
led to further price reductions. This also
affected globalzone’s sales. Despite its stable
customer base, sales fell to CHF 13.2 million ( previous year: CHF 16.7 million ).
However, thanks to higher margins it was
still possible to maintain the positive result
of the previous year.
At the same time, changes at the billing
partner made it necessary to look for
a new provider in this area too. Here, the
independent provider Ergon Informatik AG
was chosen and has taken on the
Since January 2006 globalzone’s customers also profit from the attractive
ADSL offers globalzone has developed in
cooperation with green.ch.
Irresistible times two
High-speed
at great savings:
globalzone’s current
ADSL offers are
especially attractive.
responsibility for globalzone’s billing in
January 2006.
And so are the
discount calling cards,
by the way –
20006
2
g
Callin
Card
C
Value
HF
50006
2
CHF
HF
e
Va lu
C
Value
m ob ile
ed by
zo ne
gC
a ll in
C
86%
Save
86%
po w er
a rd
rd
g Ca
llain
C aS
ve up
to
Card
up to
g
Callin
CHF
20
phone calls.
e
Va lu
up to 86 % on landline
50
In the course of 2005 the connection
fees of the cell phone operators, especially
those of Swisscom Mobile, were drasti-
customers save
po w er
m ob ile
ed by
zo ne
Europea Trade AG
The increase in operator-specific models,
such as “Signature Device” and “CoBranding” ( including on foreign markets ),
led to a drastic decline in trading sales
from CHF 34 million (previous year)
to CHF 15 million ( 2005 ). With declining opportunities for sales to third
parties, Europea Trade was mostly used
for mobilezone’s parallel imports.
While fluctuating trading sales must
also be expected in the future, they do
not affect the Group’s result.
21
mobilezone net
As service
FIRST SWISS
n the past year mobilezone was able to
conclude a cooperation agreement
with Orange Communications AG, and thanks
to that, the company was able to launch
its own offer as service provider ( MVNO ) for
cellular telephony in January 2006.
I
provider, too,
mobilezone
will achieve a
The Group’s business as service provider
is managed by mobilezone net ag, which was
founded specifically for this purpose.
Since the communication costs of mobilezone subscribers are also billed by mobilezone, a growth in sales will necessarily
result for the whole Group. In the coming
years, funds from free cash flow will
be invested in systematically cultivating a
regular clientèle. Of course, mobilezone
strong market
position
Care
mer
Custo 0 800
70
0900
mobilezone
lets you be mobile :
with individual
subscriptions and
attractive price plans,
we will provide you
with new impulses.
22
SERVICE PROVIDER
will offer its customers especially attractive minute rates.
The first post-pay price plan “fair value”
has been offered successfully since the
middle of January 2006. In April / May 2006
a prepaid offer will be on the market under
the name “light”, and for the second half
of the year the introduction of the post-pay
price plan “freedom” is planned.
With individual subscriptions and attractive price plans globalzone will stand out
against other providers and will thus
also achieve and maintain a strong market
position as service provider.
A SIAN STYLE .
The recipe for success : take authentic
ingredients, create a pleasant atmosphere, and serve
everything with a smile.
J OHN W ONG ( 49 ) ,
RESTAURATEUR IN
B ÜLACH
S AMSUNG SGH-D 600 , A
DELICACY AT MOBILEZONE
C AMERA ! A CTION !
At some point the camera feels like lead on your shoulder.
But in the end only the result counts. And the sure knowledge
that moving pictures move people.
R OMAN H EER ( 44 ) , VIDEO
PRODUCER IN
L UCERNE
N OKIA N 70 , VIDEO
PRODUCER AT MOBILEZONE
Outlook
Innovations
will keep
the demand
for cell phones
and accessories high
also in 2006
NO
ore pixels, more memory, more music:
innovative solutions will continue to have
a positive effect on the cell phone business
also in 2006. The most important trends are
already beginning to emerge.
M
From the simple cell phone to full-feature
digital camera. As a result of the announced
introduction of 3.2-megapixel cameras ( Sony
Ericsson ), 5-megapixel ( LG ) and even 8-megapixel cameras ( Samsung ), cell phones are
gradually pushing digital cameras out of the
market. Better lenses, auto-focus, and
zoom and flash are just a few developments
in this industry sector.
Music ever more important. In addition to
good MP 3 players, Bluetooth stereo continues
to improve the cell phone music-listening
experience, which is especially important to
L I M I T S TO I N N OVAT I O N
the young. Groundbreaking developments
will also take place in the area of music
downloading. Cell phones with integrated
iPod are already on the market.
More and more memory. The first models
with 3-gigabyte memory are expected to
be on the market before the end of 2006.
Models with replaceable memory cards with
a capacity of up to 2 gigabytes are already
on the market. In the future, cell phone users
will not only carry a telephone but also
a photo album, music library, and all sorts
of data with them.
A veritable flood of novelties. For 2006
manufacturers have announced more
new products than ever before. Moreover,
with LG and BenQ-Siemens new providers
are crowding into the Swiss market.
LG Leo
Flat enough for
any pocket :
high-quality cell phone
in an extremely flat
design with
5-megapixel ( ! )
digital camera.
25
Outlook
C O N S U LT I N G
Cell phones
are turning into
multimedia
devices before
our eyes
C O M P E T E N C E B E C O M I N G E V E R M O R E I M P O RTA N T
Live TV moves. Watching TV via cell phone
has already become almost commonplace. Live TV can be received via UMTS or
EDGE – and in either case at lower and lower
rates. For sure, the upcoming soccer
World Cup will have a positive effect on
the “TV cell phone”.
More e-mails on the road. More and
more, people read and answer their e-mail via
their cell phones. Increasingly, cell phones
come equipped with Windows Mobile, a
software many cell phone users are already
familiar with.
Accessory business increasingly
important. Improved digital cameras are
practically crying out for photo printers.
Bluetooth stereo will boost demand for highquality stereo headphones. And the MP 3 /
iPod function makes external speakers a
hot topic. Result : the accessory business
will become even more important.
Essentially, mobilezone is confident
that both sales and revenue can be
increased in 2006, not only because of its
product range, but above all because of
the outstanding consulting competence
of its employees. The rapid technical
development not only creates more opportunities where cell phones and services
are concerned, but also makes their
use more complex. Technical know-how
will pay off in the future.
Additional impulses are also expected
from mobilezone’s new activities –
from service providing and from the subsidiary mobilezone net.
BenQ / Siemens EF 81
Sony Ericsson W 810i
Nokia 6280
Smart all-round
Soundstation :
Top-seller :
talent : With 2-mega-
The walkman for tele-
2-megapixel
pixel camera,
phoning – or music
camera and a
sharp display, large
freaks ! Comes with
high-resolution
memory, and –
lots of memory too !
large display –
of course – UMTS.
the camera
cell phone with
class.
Motorola PEBL U6
A jewel :
Samsung SGH-D 800
Stylish slider :
Captivating design with
Its predecessor was
solid inner life – the cell
mobilezone’s
phone for showing off !
26
top-seller in 2005.
C ONTENDER FOR THE TITLE .
Stamina. Determination. Desire for peak performance.
To be successful always also means to believe in oneself.
And sometimes also to rise above oneself.
S ARAH S CHÜTZ ( 27 ) , TRI - ATHLETE
FROM
D ÜBENDORF
S ONY E RICSSON K 750 i ,
ALL - ROUND TALENT AT MOBILEZONE
FINANCIAL
REPORT
2005
Group financial statements
Consolidated income statement
30
Consolidated balance sheet
31
Consolidated cash flow statement
32
Consolidated statement of changes in equity
33
Notes to the consolidated financial statements
34
Report of the Group Auditors
55
mobilezone holding ag financial statements
Income statement
56
Balance sheet
57
Notes to the financial statements
58
Proposal by the Board of Directors
61
Report of the Statutory Auditors
62
This Financial Report is published in German and English.
The German original is binding. The English version is a translation.
29
mobilezone Group
C O N S O L I D AT E D
for the years ended December 31
( in CHF 000 )
2005
Notes
Total Group
Gross sales revenues
Sales deductions including VAT
Net sales
1
2005
2004
Continuing
operations
2005
2004
Discontinuing
operations
261,831
288,709
261,831
268,094
20,615
– 18,241
– 19,789
– 18,241
– 17,433
– 2,356
243,590
268,920
243,590
250,661
18,259
291
855
291
593
262
Other operating income
Cost of goods and materials
2004
I N C O M E S TAT E M E N T
– 183,594
– 209,732
– 183,594
– 194,032
– 15,700
Personnel costs
2
– 25,672
– 25,375
– 25,672
– 23,692
– 1,683
Other operating costs
3
– 12,091
– 11,281
– 12,091
– 9,975
– 1,306
22,524
23,387
22,524
23,555
– 168
8
– 2,467
– 2,747
– 2,467
– 2,650
– 97
10
– 1,226
– 1,326
– 1,226
– 1,326
0
4
0
173
0
0
173
18,831
19,487
18,831
19,579
– 92
Operating profit before
depreciation & amortization ( EBITDA )
Depreciation of property, plant & equipment
Amortization of intangible assets
Net result
of discontinued operations
Operating profit before interest & tax ( EBIT )
Share of the results of associated companies
9
0
272
0
272
0
Other financial income
5
770
894
770
892
2
Financial expense
6
Profit / loss before income taxes
Income tax expenses
7
Net profit / loss
– 325
– 214
– 325
– 139
– 75
19,276
20,439
19,276
20,604
– 165
– 3,868
– 3,711
– 3,868
– 3,711
0
15,408
16,728
15,408
16,893
– 165
( in CHF )
( in CHF )
( in CHF )
( in CHF )
( in CHF )
Earnings per share
16
0.43
0.47
0.43
0.47
0.00
Earnings per share – diluted
16
0.43
0.46
0.43
0.46
0.00
30
mobilezone Group
as of December 31
( in CHF 000 )
BALANCE SHEET
2005
2004
8
5,168
5,385
10
2,697
2,413
Notes
ASSETS
Property, plant & equipment
Intangible assets
Deferred tax assets
7
219
303
Securities
11
1,635
0
Other accounts receivable
14
Fixed assets
72
72
9,791
8,173
Inventories
12
20,568
21,796
Trade accounts receivable
13
28,111
22,030
14
3,935
5,078
Cash & cash equivalents
15
14,485
24,593
Current assets
67,099
73,497
Total Assets
76,890
81,670
358
369
9,737
21,219
LIABILITIES AND SHAREHOLDERS’ EQUITY
Share capital
16
Additional paid-in capital ( share premium )
Retained earnings
35,603
20,195
45,698
41,783
1,980
2,206
Deferred tax liabilities
7
Advances received
208
376
Long-term liabilities
2,188
2,582
Trade accounts payable
20,884
27,285
4,284
5,366
100
850
Current tax liabilities
Current provisions
17
Other current liabilities
18
3,736
3,804
Current liabilities
29,004
37,305
Total Liabilities and shareholders’ equity
76,890
81,670
31
mobilezone Group
for the years ended December 31
( in CHF 000 )
Profit / loss before income taxes
Interest income and expenses, net
Depreciation & amortization
Gain on sale of property, plant & equipment
Changes in provisions, net
Changes in value adjustments, net
Income from associates accounted for using the equity method
Gain on sale of investments in associates
Other expenses not involving the movement of funds
Changes in
trade accounts receivable
other accounts receivable
inventories
trade accounts payable
other current liabilities
Income taxes paid
Net cash from operating activities
Acquisitions of
property, plant & equipment
intangible assets
securities in fixed assets
Proceeds from disposals of
property, plant & equipment
investments in associated companies
Cash flow relating to divestiture of subsidiaries 1
Interest received
Net cash from investing activities
Interest paid
Capital increase
Reduction in par value
Purchase of treasury shares
Sale of treasury shares
Issuance of call-options on own shares
Net cash from financing activities
2005
2004
19,276
– 90
3,693
0
– 750
523
0
0
0
22,652
20,439
– 10
4,073
2
130
360
– 272
– 145
– 191
24,386
13
14
12
– 6,081
1,143
705
– 6,401
– 58
– 5,161
6,799
9,982
946
– 829
– 10,980
– 668
– 2,982
19,855
8
10
11
– 2,273
– 1,510
– 1,635
– 2,599
– 758
0
8
9
23
0
0
41
– 5,354
30
1,000
– 1,537
37
– 3,827
– 60
637
0
– 12,366
236
0
– 11,553
– 61
9,592
– 3,216
– 10,646
390
591
– 3,350
0
– 26
– 10,108
24,593
14,485
12,652
11,941
24,593
Notes
8, 10
17
9
9
16
16
16
16
Translation adjustments on cash & cash equivalents
Net decrease / increase in cash & cash equivalents
Cash & cash equivalents at January 1
Cash & cash equivalents at December 31
1
32
C A S H F L O W S TAT E M E N T
15
Details on assets and liabilities acquired and disposed of are disclosed in the notes under “ Scope
of consolidation ” on page 37.
mobilezone Group
S TAT E M E N T O F C H A N G E S I N E Q U I T Y
Movements of shareholders’ equity
( in CHF 000 )
Share
capital
Additional
paid-in
capital
Retained
earnings
Cumulative
translation
adjustment
Total
At December 31, 2003
3,560
21,317
3,467
– 75
28,269
43
9,549
9,592
– 10,238
– 10,256
Capital increase from options exercised
Reduction in par value
– 3,216
– 18
Issuance of call-options on own shares
– 3,216
591
591
Translation adjustments from deconsolidation
Net profit
75
75
0
41,783
16,728
369
21,219
20,195
16,728
Capital increase from
employee options exercised
7
630
637
– 18
– 12,112
– 12,130
358
9,737
Net profit
15,408
35,603
15,408
0
45,698
The previous year’s line items “Additional paid-in capital” and “Retained earnings” have been
adjusted by the reclassification of CHF 591,000 ( income from issuance of call-options on
own shares ).
The line item “Retained earnings” includes legally restricted reserves in the amount of
CHF 1,597,000 ( 2004 : CHF 1,602,000 ) that are not available for distribution. Such legal reserves
are established based on the legal requirements of the Swiss Code of Obligations.
The transaction costs and taxes of CHF 108,000 ( 2004 : CHF 272,000 ) related to the issuance of
share capital were deducted from additional paid-in capital. The transaction costs of CHF 121,000
( 2004 : CHF 112,000 ) related to the purchase of treasury shares were debited to the reserves.
Additional information on the share capital is provided in Note 16.
33
mobilezone Group
NOTES
TO T H E C O N S O L I D AT E D F I N A N C I A L S TAT E M E N T S
Segment information
Consolidated income statement
( in CHF 000 )
Gross sales revenues with third parties
Gross sales revenues with other segments
mobilezone Group
Commerce
Fixed-line
telecommunications
Discontinued
operations
Other /
eliminations
2005
2004
2005
2004
2005
2004
2005
2004
2005
2004
261,831
288,709
248,768
252,031
13,063
16,063
—
20,615
0
0
0
0
0
0
175
686
—
0
– 175
– 686
Sales deductions including VAT
– 18,241
– 19,789
– 17,322
– 16,274
– 919
– 1,159
—
– 2,356
0
0
Net sales
243,590
268,920
231,446
235,757
12,319
15,590
—
18,259
– 175
– 686
291
855
284
922
–1
23
—
262
8
– 352
– 183,594
– 209,732
– 176,183
– 183,510
– 7,421
– 11,057
—
– 15,700
10
535
Other operating income
Cost of goods and materials
Personnel costs
– 25,672
– 25,375
– 24,048
– 22,690
– 373
– 286
—
– 1,683
– 1,251
– 716
– 12,091
– 11,281
– 12,077
– 10,003
– 1,185
– 1,174
—
– 1,306
1,171
1,202
22,524
23,387
19,422
20,476
3,339
3,096
—
– 168
– 237
– 17
Operating profit before
depreciation & amortization ( EBITDA )
Depreciation of property, plant & equipment
– 2,467
– 2,747
– 2,455
– 2,638
– 12
– 12
—
– 97
0
0
Amortization of intangible assets
– 1,226
– 1,326
– 940
– 1,135
– 286
– 191
—
0
0
0
Net result of discontinuing operations
Operating profit before interest and tax ( EBIT )
0
173
0
0
0
0
—
173
0
0
18,831
19,487
16,027
16,703
3,041
2,893
—
– 92
– 237
– 17
Consolidated balance sheet
( in CHF 000 )
mobilezone Group
2005
Fixed assets
2004
2005
Fixed-line
telecommunications
2004
2005
Discontinued
operations
Other /
eliminations
2004
2005
2004
2005
2004
9,791
8,173
7,364
7,141
573
729
—
0
1,854
303
Current assets
67,099
73,497
65,472
61,288
6,758
5,265
—
0
– 5,131
6,944
Total Assets
76,890
81,670
72,836
68,429
7,331
5,994
—
0
– 3,277
7,247
Liabilities
31,192
39,887
22,393
28,343
1,765
3,227
—
0
7,034
8,317
Net assets
45,698
41,783
50,443
40,086
5,566
2,767
—
0
– 10,311
– 1,070
5,418
3,357
3,641
3,142
142
210
—
5
1,635
0
Investments in fixed assets
The segment “ Commerce ” consists of mobilezone ag and Europea Trade AG.
The segment “ Fixed line telecommunications ” includes globalzone ag and mobilezone international ag.
The segment “ Discontinued operations ” consisted of the German companies Tebbe Harms Kleen GmbH
& Co. KG, Kleen Vertriebs GmbH & Co. KG, and Kleen Handels GmbH (all until May 31, 2004).
34
Commerce
Except for the trading activities in the segment “Commerce”, the segment operations are limited to their respective
geographical markets. In 2005 in the segment “Commerce” trading revenues in the EU markets came to CHF 0.8 million
(previous year CHF 21.3 million).
35
mobilezone Group
Principles of the Group accounting
General
The mobilezone Group conducts business in the area of mobile and fixed-line telecommunications. The
core activity lies in the segment Commerce with mobilezone ag, which was established in May 1999
and now has a total of 104 retail stores with locations in every bigger Swiss city, and Europea Trade AG,
which is active in the wholesale business. The business model is based on agreements with the three
providers active in Switzerland that pay mobilezone for finding new clients for them (one-time commissions ). Due to these commissions, mobilezone is able to provide its clients with mobile phones at very
low prices or even at no charge. The segment “fixed-line telecommunications” consists of globalzone
ag and mobilezone international ag. These so-called “switchless” retailers offer their customers
fixed-line telecommunications services. Under the brand name “fair value” the newly founded mobilezone net ag has been offering mobile subscription service based on its own pricing plan since
January 2006. The parent company of mobilezone Group is mobilezone holding ag, Riedthofstrasse 124, 8105 Regensdorf / Switzerland. The company is listed on the Swiss Exchange SWX.
The consolidated financial statements of mobilezone provide a true and fair picture of its financial
position, the results of operations, and cash flows in accordance with the International Financial
Reporting Standards ( IFRS ) and comply with Swiss law. They have been prepared on a historical cost
basis except for derivative financial instruments and marketable securities that are listed at fair market
value. The reporting currency is the Swiss franc ( CHF ).
The preparation of financial statements in conformity with IFRS requires assessments, estimates, and
assumptions on the part of management that affect the reported amounts on the reporting date of the
financial statements. The estimates and associated assumptions are based on historical experience
and various other factors that are believed to be reasonable under the circumstances. Actual results
may differ from these estimates. The estimates and underlying assumptions are reviewed on an
ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimate
is revised and also in future periods if the revision affects them. No positions with a significant risk
of material adjustment due to changes in assessments and estimates are known.
In 2003 the International Accounting Standards Board (IASB) published a revised version of IAS 32
“Financial Instruments: Disclosure and Presentation”, a revised version of IAS 39 “Financial Instruments:
Recognition and Measurement” as well as “Improvements in International Accounting Standards”, which
affected 14 existing Standards. In 2004 the IASB published IFRS 2 “Share-based payments”, IFRS 3
“Business Mergers”, IFRS 4 “Insurance Contracts”, IFRS 5 Fixed Assets held for Sale and Discontinued
Operations”, the revised IAS 36 “Impairment of Assets”, and IAS 38 “Intangible Assets” and additional
changes in IAS 39. The Group has adopted all of the new and revised Standards and Interpretations as
of January 1, 2005. The adoption of these new and revised Standards and Interpretations had no material effect on the Group’s shareholders’ equity, net income, or cash flow statement. No adjustments
in prior years’ figures were necessary, but the changes required additional disclosures in the Notes.
36
NOTES
The following IFRS standards were adopted in 2005, but they will not take effect until later and were
not yet used in preparing this set of consolidated financial statements. No material effects on the
financial statements of mobilezone are expected.
Standard / Interpretation
First-time adoption :
Changes to IAS 19, Employee Benefits
January 1, 2006
Changes to IAS 39, Financial Instruments
January 1, 2006
Changes to IAS 21, Foreign exchange rates
January 1, 2006
IFRS 6, Exploration for and Evaluation of Mineral Resources
January 1, 2006
IFRIC 4, Determining whether an Arrangement Contains a Lease
January 1, 2006
IFRIC 6, Waste Electrical and Electronic Equipment
January 1, 2006
IFRIC 7, Financial Reporting in Hyperinflationary Economies
January 1, 2007
IFRIC 8, Scope of IFRS 2
January 1, 2007
IFRS 7, Financial Instruments: Disclosures
January 1, 2007
Changes to IAS 1, Presentation of Financial Statements :
Disclosures regarding Equity
January 1, 2007
Scope of consolidation
The scope of consolidation is set out in Note 4 to the financial statements of mobilezone holding ag
on page 56. In the previous year the scope of consolidation was reduced as per May 31, 2004, when
Tebbe Harms Kleen GmbH & Co. KG, Kleen Vertriebs GmbH & Co. KG and Kleen Handels GmbH were sold.
The transaction price amounted to CHF 15,000 and was received in cash. These companies’ 2004
( 5 months ) contribution to operating income are presented separately in the column "Discontinued
Operations" of the consolidated income statement. Assets and liabilities as of the date of disposal
consisted of :
Disposals
2004
( in million CHF )
1.5
Other current assets
1.6
0.4
Bank and other interest-bearing liabilities
0.0
Liabilities ( excluding Group loans )
– 3.9
Translation adjustments
0.0
(Gain) / Loss from deconsolidation
– 0.4
Net cash outflow from deconsolidation ( cash & cash equivalents derecognized )
– 1.5
Jamba ! AG ( Schweiz ), which was included in the consolidated financial statement using the equity
method, was sold as of October 1, 2004, for CHF 1 million, at an accounting profit of CHF 145,000.
37
mobilezone Group
Discontinued operations
On January 20, 2004, mobilezone announced in a press release that it had decided to discontinue its
German activities. In June 2004 the remaining companies in Germany were sold (Kleen Group). Accordingly, this segment was presented in the previous year as a discontinued operation. The result of this
unit is disclosed separately in the income statement. Cash flows from operating activities, from
investing activities, and from financing activities in 2004 amounted to CHF 0.0 million. In the previous
year the deconsolidation of the discontinued operations led to a net gain of CHF 173,000, which was
included in the income statement under “Net result of discontinued operations”. The net result did not
have any effect on income taxes.
Principles of consolidation
The consolidated financial statements of mobilezone include the financial statements of mobilezone
holding ag and all the subsidiaries it controls directly or indirectly by majority of votes or other means.
Those entities are fully consolidated, whereby assets, liabilities, income, and expenses are incorporated fully in the consolidated accounts.
Investments and joint ventures, on which mobilezone exercises significant influence but no control,
are recorded according to the equity method and disclosed as “investments in associated companies”.
The share in the profit or loss of associated companies is presented separately in the income statement. Significant positions and transactions with such investments and joint ventures are disclosed
separately as items relating to associated companies.
Capital consolidation is based on the purchase method, whereby the acquisition cost of subsidiaries is
offset at the time of acquisition against the fair market value of the net assets acquired, determined
according to uniform corporate valuation principles. During the year under review companies acquired
or disposed of are consolidated as of the date of acquisition and deconsolidated as of the date of
disposal. Any gain or loss from deconsolidation is recognized in the income statement.
Accounts payable to, accounts receivable from, and income and expenses between the companies
included in the consolidation are eliminated. Intercompany profits within the Group are also eliminated
upon consolidation.
Foreign currency translation
The consolidated financial statements are prepared in Swiss francs. Monetary assets and liabilities
denominated in foreign currencies are translated using the exchange rates effective on the balance
sheet date. Transactions in foreign currencies are recorded using exchange rates prevailing at the
time of the transaction. Gains or losses arising from the settlement of these transactions are included
in current year’s income statement.
Assets and liabilities of subsidiaries that do not report in Swiss francs are translated into Swiss francs
for consolidation purposes at the exchange rate in effect on the balance sheet date. The income statement, cash flow statement, and other movements are translated at the average rate of the reporting
38
NOTES
period. Currency translation differences resulting from the translation of the balance sheet and income
statements of subsidiaries and from the translation of equity-like corporate loans denominated in
foreign currencies are recognized directly in equity capital and presented separately as cumulative
translation adjustments.
Financial risk management and derivative financial instruments
Approximately 55 % of mobilezone’s purchases for Switzerland are paid in euro. Due to the short-term
nature of payments and the high inventory turnover, the Group generally does not hedge any foreign
currency risks on purchases. Accordingly, the Group used only few derivative financial instruments with
a short maturity during the year under review. As of the balance sheet date, any open contracts are
valued at fair market value with any changes in fair market value recognized in the income statement.
Property, plant, and equipment are stated at historical cost less accumulated depreciation. Depreciation is charged to the income statement on a straight-line basis over the following estimated useful
lives of items of property, plant, and equipment :
Office equipment and furniture incl. EDP
2 to 5 years
Shop equipment
5 to 8 years
Vehicles
3 to 5 years
Intangible assets
Acquired rights such as contracts with clients, lessors, and suppliers and similar rights that are generating a positive cash flow are capitalized and amortized over the estimated useful live of 5 years.
Goodwill arising from acquisitions, determined as the difference between the purchase price and
the fair market value of the net assets acquired, and other intangible assets with an indefinite useful
live are not amortized but will be tested annually for impairment.
Securities
Initially, securities are recognized at fair market value. Subsequent changes in fair market value are
recognized in the income statement. If there is no active market or the fair market value cannot be
determined reliably, securities are stated at amortized cost less necessary valuation adjustments.
Impairment of fixed assets
The value of property, plant, and equipment and other fixed assets, including goodwill and other intangible assets, is reexamined whenever changes in circumstances or events make an overvaluation
of the book values appear likely. When the book value exceeds the realizable value, an accelerated
depreciation is recorded on the income statement against the value that seems recoverable based
on discounted, anticipated future revenues or on the estimated net sale value.
39
mobilezone Group
Inventories
Inventories are stated at the lower of cost or net realizable value, whichever is lower. The cost of inventories is calculated using the weighted average cost method. Goods with long storage periods are
subject to appropriate value adjustments. Net realizable value is the estimated selling price in the
ordinary course of business, less selling expenses. The price of the mobile communications product
is determined based on whether the product is sold on a stand-alone basis or in conjunction with
a provider subscription. Net realizable value therefore takes into account both components. In addition, price protection arrangements with certain suppliers are also considered in determining the need
for any value adjustments.
Trade and other accounts receivable
Trade and other accounts receivable are stated at their nominal amounts less any valuation adjustments for credit risks.
Cash & cash equivalents are stated at nominal value. They include cash on hand, postal and bank
accounts, and money market deposits with original maturity of three months or less.
Provisions for liabilities and contingencies
Provisions are set aside for current or future legal or de facto obligations when on the balance sheet
date, as a result of past events, reasonable estimates regarding the future transfer of economic values
are possible and when such a transfer is likely. The provisions are determined based on the best
possible estimate of the expenditures. In cases of considerable importance, provisions are determined
by discounting the expected future cash flow on the balance sheet date at a rate that reflects current
market assessments of the risks specific to the liability.
Contingent liabilities are disclosed in the attachments hereto if a future obligation is possible or if a
present obligation exists, but an outflow of funds is not probable or the amount cannot be reliably
estimated.
Leasing
Lease contracts are recognized in the balance sheet when the significant risks and rewards of
ownership are assumed by the Group. Lease payments are divided according the annuity-method
into interest and principal payments. Leased assets are depreciated over the lower of either the lease
term or the estimated useful life.
Payments made under operating leases are recognized in the income statement on a straight-line
basis over the term of the lease. Lease incentives are recognized in the income statement as a
reduction of the total lease expense. Revenue-based and other contingent leases are accrued on an
estimated basis.
40
NOTES
Retirement benefits
For all relevant risks the mobilezone Group companies have joined a multi-employer plan established
under Swiss law as a defined contribution plan, which has reinsured all risks at a large insurance
company. The plan is funded by employees’ and employers’ contributions. Nevertheless, the
plan qualifies in Switzerland as a defined benefit plan according to I AS 19. The financial impact of this
plan, including accompanying provisions, on the consolidated financial statements is determined
based on the projected unit credit method. In accordance with IAS 19, the difference between plan
assets and defined benefit obligation is principally recognized as an asset or a liability on the consolidated balance sheet. However, a pension surplus is recognized as an asset only if the asset embodies
future funds that are actually available to the Group in the form of refunds or reductions in future contributions. Actuarial gains and losses arising from the periodical reassessments by external actuaries
are recognized if and to the extent that they exceed 10 % of the higher of either the projected benefit
obligation or the fair market value of plan assets. The amount exceeding this “corridor” is amortized
over the expected average remaining working lives of the employees participating in the plan.
Revenues
Net sales include all revenues from the sale of goods and services, less rebates, discounts, VAT, and
write-offs of trade accounts receivable. Revenues from sale of goods are included in the income statement when the significant risks and rewards of ownership have been transferred to the buyer. One-time
commissions from providers are recognized upon conclusion of the contract. The recurring airtime
profit-sharing commissions are normally based on the subscribers’ monthly payments of mobile phone
bills to the providers. These amounts are recorded in the income statement based on the providers’
invoices on an accrual basis.
Income tax
Current income taxes are determined on the taxable income for the year and are recorded in the
income statement.
Deferred income taxes are calculated using the balance sheet liability method on any temporary
differences between the book value of assets and liabilities for financial reporting purposes and
the value used for tax purposes. Deferred tax is calculated using tax rates enacted or substantially
enacted on the balance sheet date and will be offset in future tax periods. Deferred tax loss carryforwards and deferred earnings tax credits are activated only to the extent that it is probable that
they will be realized in the future.
41
mobilezone Group
Notes to the consolidated income statement
1
Net sales
2005
2004
96,984
121,745
135,154
116,813
11,452
14,903
0
15,459
243,590
268,920
2005
2004
Wages and salaries
22,481
22,408
Social security costs
1,957
2,067
Pension costs
627
519
Other employee benefit costs
607
381
25,672
25,375
317
309
( in CHF 000 )
Mobile communication products
One-time commissions and recurring “airtime”
profit-sharing commissions from providers
Fixed line telecommunication revenues and telephone cards
Kiosk merchandise
Total Net sales
2
Personnel costs
( in CHF 000 )
Total Personnel costs
Number of employees at balance sheet date ( based on full-time employment )
Option program
An option program for members of the Board of Directors, the executive committee, and upper
man-agement was in effect until 2002. In 2003 that option program was replaced with a bonus plan.
In 2001 and 2002 the following options were granted to beneficiaries under the old plan according
to the conditions set out below :
Grant year
2002
2001
Number
989,000
1,720,000
Maturity
April 15 , 2005
Nov. 29 , 2004
Exercise ratio
1: 1
1: 1
Exercise price
1.275
3.650
Due to the reduction of nominal value in 2004 and the repurchase of shares during 2004 and 2005,
the exercise price was reduced in accordance with the provisions of the program by a total of CHF 0.16
( grant year 2001) and CHF 0.23 respectively ( grant year 2002 ) per option. These reductions correspond to the theoretical decline in the fair market value of these options due to the above-mentioned
equity capital transactions.
42
NOTES
The allocated options vest over 3 years from grant date.
The issuance of the options, except for the social security contribution, is not recognized in the consolidated financial statements.
By December 31, 2005, the following options had been exercised :
Grant year 2002
Number
By June 2, 2004
137,800
Exercise price
1. 275
∅ share price
3.15
By December 7, 2004
175,000
1. 115
4.10
By March 10, 2005
543,600
1. 115
4.80
By April 6, 2005
132,600
1. 045
4.80
Total
989,000
Grant year 2001
On December 7, 2004
Number
1,720,000
Exercise price
3.49
∅ share price
4.05
Employee retirement benefits
The actuarial calculation performed in accordance with IAS 19 as of 12 / 31/2005 resulted in the
following situation :
Components of pension costs
2005
2004
1,121
987
( in CHF 000 )
Current service costs
Interest costs
Expected return on plan assets
Recognized actuarial loss in the current year
169
225
– 143
– 134
31
13
Pension cost, gross
1,187
1,091
Less employees’ contributions
– 555
– 486
623
605
2005
2004
– 7,797
– 5,914
6,661
5,214
Pension costs, net
Funded status and recognized net assets
( in CHF 000 )
Present value of defined benefit obligation
Fair market value of plan assets
Excess of obligations over assets
– 1,136
– 700
Unrecognized actuarial losses
1,254
817
Adjustment due to IAS 19 para. 58
– 118
– 117
0
0
Recognized pension assets / liabilities
43
mobilezone Group
Itemized changes in retirement fund assets
2005
2004
( in CHF 000 )
Pension assets / liabilities as of January 1
0
0
Pension costs
– 1,178
– 1,092
Contributions
1,179
951
–1
141
0
0
The following assumptions were applied :
2005
2004
Discount rate
2.9 %
3.25 %
Expected return on plan assets
2.5 %
2.25 %
0 – 1.5 %
0 – 1.5 %
Change of adjustment due to IAS 19 para. 58
Pension assets / liabilities as of December 31
Future salary increases
Future benefit increases
Fluctuation rate
Average remaining service years
Number of insured employees as of December 31
3
0%
0%
up to 21.9 %
up to 21.9 %
7.3
7.3
329
306
2005
2004
6,294
6,556
14,637
15,763
6,062
6,802
– 14,902
– 17,840
12,091
11,281
( in CHF 000 )
Operating lease costs
Marketing
Repair and maintenance, general and administrative costs
less : contributions received from third parties
Total Other operating costs
Marketing costs are mostly covered out of cost contributions and location contributions of business
partners; the same applies to operating lease costs, though to a lesser extent.
4
Net result of discontinued operations
2005
2004
( in CHF 000 )
Book gain from disposal of investments
0
423
Provisions made for litigation claims
0
– 250
Total Net result of discontinued operations
0
173
The net result did not affect income taxes in any way.
44
NOTES
5
Other financial income
2005
2004
( in CHF 000 )
Interest on bank accounts
Book gain from disposal of Jamba ! AG ( Schweiz )
6
115
39
0
145
Foreign exchange differences
655
710
Total Other financial income
770
894
2005
2004
25
29
Financial expense
( in CHF 000 )
Interest on bank loans
Bank commissions and foreign exchange differences
300
185
Total Financial expenses
325
214
In the year under review, as in the previous year, there were no significant interest-bearing debts.
7
Income tax expenses
2005
2004
4,009
4,104
( in CHF 000 )
Current income taxes
Deferred income taxes
– 141
– 393
Total Income tax expenses
3,868
3,711
Current income taxes are based solely on the profit of the year under review. Deferred income taxes
are based solely on changes in temporary differences and the recognition of tax loss carry-forwards.
Taxes on capital are included under “Other operating costs”.
45
mobilezone Group
Income tax reconciliation
2005
2004
Profit before taxes
19,276
20,439
Average applicable tax rate
21.2%
21.1%
Expected tax expense
4,082
4,310
( in CHF 000 or as indicated )
Impact on tax expense from :
tax-exempt income
effect of previously unrecognized tax losses now utilized
0
– 65
– 69
– 221
unrecognized tax loss carry-forwards on current losses
5
125
recognition of tax loss carry-forwards of previous periods
0
– 303
effect of tax rate changes
– 150
– 135
Effective income tax expense
3,868
3,711
Deferred tax assets
2005
2004
219
303
( in CHF 000 )
Tax benefits of loss carry-forwards
In addition, the Group has tax benefits of loss carry-forwards of CHF 270,000 ( 2004 : CHF 368,000 )
that were not recognized previously due to the uncertainty as to whether future taxable profit will be
available against which the Group will be able to utilize such benefits. The related tax loss carryforward of CHF 3,465,000 expires in 2009.
Deferred tax liabilities
2005
2004
120
131
1,509
1,670
329
382
( in CHF 000 )
Intangible assets
Inventories
Provisions
Total Deferred tax liabilities
22
23
1,980
2,206
As in the previous year, no income taxes were recognized directly in shareholders’ equity.
46
NOTES
Notes to the consolidated balance sheet
8
( in CHF 000 )
Shop
equipment
Other
property,
plant &
equipment
Total
11,670
2,505
14,175
2,446
153
2,599
– 804
– 196
Cost :
Additions
Disposals
Changes in scope of consolidation
Translation adjustment
Additions
Disposals
– 1,000
– 2,349
– 2,349
– 40
– 40
10,923
2,462
13,385
2,008
265
2,273
– 729
– 145
– 874
12,202
2,582
14,784
6,803
1,368
8,171
2,166
581
2,747
– 804
– 164
Accumulated depreciation :
Additions
Disposals
Translation adjustment
Additions
Disposals
– 968
– 1,916
– 1,916
– 34
– 34
6,215
1,785
8,000
2,033
434
2,467
– 729
– 122
– 851
7,519
2,097
9,616
4,708
677
5,385
4,683
485
5,168
Book Value :
The fire insurance value of property, plant & equipment as per December 31, 2005, amounted to
CHF 11,000,000 ( 2004 : CHF 10,600,000 ).
47
mobilezone Group
9
Investments in associated companies
Share of equity
in associated companies
( in CHF 000 )
583
Share of net results
272
Disposals
– 855
0
Additions / Disposals
0
0
The previous year’s entry concerned the 49.9 % investment in Jamba ! AG ( Schweiz ). An accounting
profit of CHF 145,000 resulted from the sale.
10
Intangible assets
( in CHF 000 )
Acquired
shop locations
Acquired
goodwill
Customer
list
Total
3,471
28,980
2,143
34,594
Cost :
Additions
403
Disposals
Additions
Disposals
355
– 28,980
–6
3,868
758
– 28,980
–6
0
1,284
2,498
6,366
226
1,510
– 551
– 551
4,601
0
2,724
7,325
2,041
28,980
592
31,613
483
1,326
Accumulated amortization :
Additions
843
Disposals
Additions
Disposals
– 28,980
– 28,980
–6
2,878
–6
0
450
1,075
3,953
776
1,226
– 551
– 551
2,777
0
1,851
4,628
990
0
1,423
2,413
1,824
0
873
2,697
Book value :
48
NOTES
11
Securities
2005
2004
( in CHF 000 )
Listed capital-protected investment certificates 1
Shares not listed 2
Total Securities
1
2
12
1,535
0
100
0
1,635
0
2005
2004
21,181
22,106
Stated at market value; maturity date: April 18, 2008
Stated at amortized cost less valuation adjustments
Inventories
( in CHF 000 )
Inventories, gross
Less valuation adjustments
Total Inventories
– 613
– 310
20,568
21,796
The carrying amount of inventories carried at fair value less costs to sell amounted to CHF 2,053,000
( 2004 : CHF 1,293,000 ). In the year under review value adjustments in the cost of goods and materials
were made in the amount of CHF 523,000 ( previous year : CHF 310,000 ). As in the previous year,
no value adjustment transfers were made.
13
2005
2004
28,352
23,555
24
11
– 265
– 1,536
28,111
22,030
( in CHF 000 )
Accounts receivable from third parties
Accounts receivable from associated companies
Value adjustments
Total Trade accounts receivable
The value adjustment has decreased because it was set off with receivables not affecting the income
statement.
14
2005
2004
3,758
4,815
249
335
4,007
5,150
– 72
– 72
3,935
5,078
( in CHF 000 )
Accruals
less : long-term accounts receivable
Total Other accounts receivable ( current )
49
mobilezone Group
15
2005
2004
14,485
15,593
0
9,000
14,485
24,593
( in CHF 000 )
Cash on hand, at banks and in postal accounts
Fixed-term deposits
Total Cash & cash equivalents
Cash and cash equivalents are not subject to any restrictions on disposal. The effective interest rate
on fixed-term deposits was 0.45 %.
16
Share capital
Bearer shares
CHF 0.01
par value
CHF 0.10
par value
Issued and fully paid-in at December 31, 2003
0
35,601,944
Capital increase from employee options exercised
0
137,800
35,739,744
– 35,739,744
1,895,000
0
Partial reduction of nominal value from CHF 0.10 to 0.01 per share
Capital increase from shareholder options exercised
1,000,000
0
Number of shares issued at December 31, 2004
38,634,744
0
Less treasury shares :
from share repurchase 2004, scheduled for destruction
– 1,776,326
Held for trading purposes
Number of shares issued and outstanding at December 31, 2004
– 5,273
36,853,145
38,634,744
Destruction of repurchased shares
– 3,537,948
Less treasury shares :
Held for trading purposes
Number of shares issued and outstanding at December 31, 2005
676,200
35,772,996
– 7,990
35,765,006
In 2004 and 2005 the Company bought a total of 3,537,948 of its own shares by means of a share
buy-back program with tradable put options. According to the resolution of the Annual General Meeting
of April 14, 2005, these shares were destroyed in the year under review. More details regarding the
share repurchase are included in Note 3 to the annual financial statements of mobilezone holding ag
on page 59.
The treasury shares do not have any dividend or voting rights at the Annual General Meeting. All other
shares issued are equally entitled to dividends and voting.
50
NOTES
Details regarding treasury shares and contingent and authorized capital are included in Note 3 to the
annual financial statements of mobilezone holding ag on page 59.
Calculation of earnings per share
17
2005
2004
Consolidated net profit
CHF
15,408,000
16,728,000
Weighted average number
of shares outstanding
Pieces
35,952,000
35,437,000
Earnings per share
CHF
0.43
0.47
Consolidated net profit
CHF
15,408,000
16,728,000
Weighted average number
of outstanding and potential shares
Pieces
36,141,000
36,158,000
Earnings per share – diluted
CHF
0.43
0.46
Provisions
Litigation and
warranty claims
Discontinuing
Operations
Total 2005
Total 2004
At January 1
100
750
850
720
Additions
0
0
0
250
Used
0
– 750
– 750
0
( in CHF 000 )
0
0
0
– 120
At December 31
Reversed
100
0
100
850
Of these current
100
0
100
850
The increase in provisions in the previous year was due to claims related to the discontinued business
activities in Germany. The amount was paid in cash based on a final settlement. The provision for litigation and warranty claims is mainly for expected warranty claims from the sale of mobile phones.
18
Other current liabilities
2005
2004
( in CHF 000 )
Deferrals
2,031
2,349
Other current accounts payable
1,705
1,455
Total Other current liabilities
3,736
3,804
51
mobilezone Group
Other disclosures
19
Operating leases
As of December 31, 2005, mobilezone Group operated 104 shops all of which were leased. Leases
typically have fixed terms between 3 and 5 years, with an option to renew for several years.
Future payments under fixed-term operating leases as of balance sheet date will become due as
follows :
At December 31
2005
2004
6,734
6,148
19,029
16,411
4,428
5,414
30,191
27,973
( in CHF 000 )
Less than one year
Between one and five years
More than five years
Total
The expected lease income from sublease arrangements amounts to CHF 166,000
( 2004 : CHF 390,000 ).
During the year under review, CHF 6,294,000 were recognized as an expense from operating leases
in the income statement ( 2004 : CHF 6,556,000 ). These expenses included revenue-based rents in
the amount of CHF 67,000 ( 2004 : CHF 89,000 ).
20
Contingent liabilities and future commitments, capital commitments
and restrictions of ownership
As of December 31, 2005, and December 31, 2004, no items had to be reported under this heading.
21
Financial instruments
Credit risk
The Group is exposed to credit risks in the ordinary course of its operating activities. Due to industry
practice – most sales are paid in cash – there are relatively few receivables outstanding as compared
to total sales. Since Swiss law limits the number of network operators, these outstanding receivables
are due from a small number of telecommunication providers. The company meets such risks by
negotiating relatively short payment terms.
52
NOTES
Foreign currency risk
The revenues in the retail business and in the fixed-line telecommunications business are all denominated in local currency. Approximately 55 % of purchases in the retail business are denominated in
euro. The Group decided generally not to hedge the currency risk on purchases due to the short payment
terms and the high inventory turnover. The wholesale business is not exposed to any currency risks.
Open put options to sell euros
In the year under review put options with short maturity were sold that give the counterpart the right
to sell euros at the agreed upon-basis price. The premiums earned were used to reduce the price for
the Group’s euro purchases. As of December 31, 2005, there were three open contracts at a value of
euro 6,000,000 ( 2004 : none ). The fair market value ( price to settle the options ) was minus CHF 8,454.
Interest-rate risk
No long-term financial liabilities exist. The interest-rate risk arising from long-term securities is insignificant.
Fair market value of financial assets and liabilities
The fair market values of the Group’s financial assets and liabilities approximate the corresponding
book values.
22
Transactions with related parties and companies
Related parties are Members of the Board of Directors, Group Management, their close relatives, and
key shareholders including companies controlled by them.
The total cash compensation (including pension contributions) to Directors and the Group Management
( including those working on a mandate basis ) amounted to CHF 1,687,000 ( prior year CHF 1,985,000 ).
As in the previous year, there were no share-based payments, other long-term benefits, or severance
benefits paid.
Hans-Ulrich Lehmann, Member of the Board of Directors, and Rudolf Baer, CEO, are the owners of
Immoplaza AG. This company rents the central warehouse and the administrative building in Regensdorf to mobilezone. Hans-Ulrich Lehmann is the owner of Autronic AG, Samtel AG, and Mobile
Solutions AG. The first two companies are distributors of Nokia and Samsung mobile phones in
Switzerland. They supply mobilzone ag with mobile phones and pay marketing contributions to
mobilezone ag. Mobile Solutions AG develops content for mobile phone applications. All transactions
are effected at arm’s length.
53
mobilezone Group
NOTES
Transactions and balances with related parties
2005
2004
41,054
60,006
159
410
( in CHF 000 )
Purchases of mobile phones from Autronic AG
Marketing contributions from Samtel AG
Service fees from Mobile Solutions AG
283
159
Operating lease expenses to Immoplaza AG
284
293
Accounts payable to Autronic AG
3,419
8,220
Accounts receivable from Samtel AG
24
11
Accounts receivable from Mobile Solutions AG
51
85
Payments for consulting services from members of the Board of Directors or their related law offices
amounted to CHF 155,000 ( prior year : CHF 160,000 ).
23
54
Post-balance-sheet events
There have been no events that significantly affect the consolidated financial statements. The
Board of Directors approved the consolidated financial statements for publication on March 6, 2006.
The consolidated financial statements must still be approved by the Annual General Meeting on
April 13, 2006.
mobilezone Group
REPORT
OF THE
GROUP AUDITORS
Report of the Group Auditors to the General Meeting of
mobilezone holding ag, Regensdorf
As group auditors, we have audited the consolidated financial statements presented on pages
30 to 54 ( balance sheet, income statement, statement of changes in equity, cash flow statement and
notes ) of mobilezone holding ag for the year ended December 31, 2005.
These consolidated financial statements are the responsibility of the board of directors. Our
responsibility is to express an opinion on these consolidated financial statements based on our audit.
We confirm that we meet the legal requirements concerning professional qualification and
independence.
Our audit was conducted in accordance with Swiss Auditing Standards and with the International
Standards on Auditing ( ISA ), which require that an audit be planned and performed to obtain
reasonable assurance about whether the consolidated financial statements are free of material misstatement. We have examined on a test basis evidence supporting the amounts and disclosures
in the consolidated financial statements. We have also assessed the accounting principles used,
significant estimates made and the overall consolidated financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the consolidated financial statements give a true and fair view of the financial
position, the results of operations and the cash flows in accordance with the International Financial
Reporting Standards ( IFRS ) and comply with Swiss law.
We recommend that the consolidated financial statements submitted to you be approved.
KPMG Fides Peat
Fredy Luthiger
Claudius Rüegsegger
Swiss Certified Accountant
Auditor in Charge
Zurich, March 6, 2006
55
January 1 to December 31
INCOME
2005
S TAT E M E N T
2004
( in CHF 000 )
Dividend income
0
7,399
Financial income
1,189
2,483
Reversal of provisions and value adjustments
Gain from disposal of investments
389
570
0
501
Income from services provided and other income
1,608
1,764
Total Income
3,186
12,717
Administrative expenses
1,814
1,888
Financial expenses
92
61
Set aside for provisions and value adjustments
30
263
Total Expenses
1,936
2,212
Net profit
1,250
10,505
The presentation of the income statement has been slightly changed in the year under review and the
prior year’s figures have been adjusted accordingly to allow comparison.
56
BALANCE
S H E E T B E F O R E A P P R O P R I AT I O N O F AVA I L A B L E E A R N I N G S
as of December 31
( in CHF 000 )
2005
2004
Notes
ASSETS
Treasury shares
820
7,083
31
10,256
25
25
Accounts receivable from
Third parties
Group companies
Accruals and deferrals
Current assets
Investments
2
Securities
0
1,122
0
1
876
18,487
31,076
30,576
1,634
0
Fixed assets
32,710
30,576
Total Assets
33,586
49,063
279
238
5,500
2
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current accounts payable to
Third parties
Group companies
Accruals and deferrals
Current liabilities
Provisions
Share capital
General reserves
Reserve for own shares
501
299
6,280
539
0
750
358
386
15,162
26,627
31
10,256
10,505
0
Available earnings
Balance brought forward
Net profit
Total Liabilities and shareholders’ equity
3
1,250
10,505
27,306
47,774
33,586
49,063
57
Except for the comments that follow, there are no further facts that require disclosure in accordance
with Art. 663b of the Swiss Code of Obligations.
1
Contingent liabilities at December 31
2005
2004
0
643
( in CHF 000 )
Letters of postponement issued in favor of subsidiaries
Additional guarantees in favor of subsidiaries
Joint and several liability from VAT – group taxation
2
0
99
p. m.
p. m.
Scope of consolidation and significant investments in subsidiaries and associates
Investment held Paid-in capital
( %)
( in CHF 000 )
Consolidation
Switzerland
mobilezone ag, Regensdorf
100
2,850
C
Europea Trade AG, Regensdorf
100
100
C
mobilezone net ag, Regensdorf ( since September 20, 2005 )
100
500
C
globalzone ag, Regensdorf
100
100
C
mobilezone international ag, Regensdorf
100
200
C
Jamba ! AG ( Schweiz ), Regensdorf ( until September 30, 2004 )
E
Germany
Tebbe Harms Kleen GmbH & Co. KG, Hausham ( until May 31, 2004 )
C
1
Kleen Vertriebs GmbH & Co. KG, Hausham ( until May 31, 2004 )
C
2
Kleen Handels GmbH, Hausham ( until May 31, 2004 )
C
2
C = Fully consolidated
E = Included in the consolidated financial statements according to the equity method.
58
1
Indirectly owned subsidiary of mobilezone holding ag (via Kleen Vertriebs GmbH)
2
Management company not engaged in operations
NOTES
3
TO T H E F I N A N C I A L S TAT E M E N T S
Share capital, authorized and conditional capital increases
As of December 31, 2005, the ordinary share capital consists of 35,772,996 bearer shares at a par
value of CHF 0.01 each. As of the balance sheet date, there was authorized share capital in the amount
of CHF 30,000 ( 2004 : CHF 30,000 ). Conditional share capital amounting to CHF 132,910 ( 2004 :
CHF 139,672 ) is earmarked for the exercise of employee stock options ( up to CHF 22,910 ), for the
exercise of conversion and option rights relating to any debenture loans ( up to CHF 100,000 ) and for
the exercise of other options ( up to CHF 10,000 ). As of balance sheet date there were no options
outstanding ( 2004 : 676,200 options outstanding for the purchase of 676,200 bearer shares at a
par value of CHF 0.01).
Change in number of treasury shares
Amount of
bearer shares
At January 1, 2004
Purchases from stock
repurchase program 2004
Price in CHF
Maximum Average Minimum
0
Total
( in CHF 000 )
0
1,776 326
5.70
5.70
5.70
10,124
Other purchases at cost
99,229
4.40
4.13
3.81
410
Disposals at sale prices
– 93,956
4.37
4.16
4.04
– 390
1,781,599
Purchases from stock
repurchase program 2005
1,761,622
Transaction costs relating to
stock repurchase program
112
10,256
6.81
6.81
6.81
Transaction costs relating to
stock repurchase program
Destruction of purchased shares
11,997
121
– 3,537,948
– 22,355
Other purchases at cost
50,165
5.50
4.94
4.34
248
Disposals at sale prices
– 47,448
5.60
4.97
4.36
– 236
7,990
31
59
NOTES
TO T H E F I N A N C I A L S TAT E M E N T S
Significant shareholders
According to the information to the Board of Directors, as per year-end the following shareholders
controlled more than 5% of the share capital :
At December 31
2005
2004
Hans-Ulrich Lehmann / Lehmann-Holding AG
16
22
Schroders Plc., GB-London
10
10
Rudolf Baer / B & B Beratungs AG
6
8
Bestinver Gestión SA, E-Madrid
6
0
( in %)
Asialand Holding Corp., VG-Tortola
60
5
5
Martin Lehmann
—
5
Erich Traber
—
5
Total
43
55
PROPOSAL
BY THE
BOARD
OF
DIRECTORS
Proposal by the Board of Directors
2005
2004
( in CHF )
Balance brought forward
Net profit
Available earnings at the disposal of the Annual General Meeting
10,505,455
0
1,249,922
10,505,455
11,755,377
10,505,455
The proposal of the Board of Directors of mobilezone holding ag to the Annual General Meeting, to be
held on April 13, 2006, is to dispose of the available earnings as follows :
Payment of a dividend of CHF 0.25
per bearer share entitled to dividends
8,943,249
0
To be carried forward
2,812,128
10,505,455
11,755,377
10,505,455
Total
In addition, the Board of Directors submit a motion to the General Meeting to assign CHF 15,062,103
from general reserves to free reserves.
61
REPORT
OF THE
S TAT U TO RY A U D I TO R S
Report of the Statutory Auditors to the General Meeting of
mobilezone holding ag, Regensdorf
As statutory auditors, we have audited the accounting records and the financial statements
presented on pages 56 to 61 ( balance sheet, income statement and notes ) of mobilezone holding ag
for the year ended December 31, 2005.
These financial statements are the responsibility of the board of directors. Our responsibility is
to express an opinion on these financial statements based on our audit. We confirm that we meet
the legal requirements concerning professional qualification and independence.
Our audit was conducted in accordance with Swiss Auditing Standards, which require that an audit
be planned and performed to obtain reasonable assurance about whether the financial statements
are free of material misstatement. We have examined on a test basis evidence supporting
the amounts and disclosures in the financial statements. We have also assessed the accounting
principles used, significant estimates made and the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
In our opinion, the accounting records and financial statements and the proposed appropriation
of available earnings comply with Swiss law and the company’s articles of incorporation.
We recommend that the financial statements submitted to you be approved.
KPMG Fides Peat
Fredy Luthiger
Claudius Rüegsegger
Auditor in Charge
Zurich, March 6, 2006
62
mobilezone branches
SHOP
Aarau Bahnhofstrasse 11
Neuchâtel Rue du Seyon 6
Aigle Centre Commercial MMM Centre,
Nyon Centre Commercial La Combe,
Chemin sous le Grand Pré 4
Rue de la Morâche 6
Arbon Zentrum Novaseta
Oftringen Perry Center, Bernerstrasse
Baden Badstrasse 7
Olten Baslerstrasse 60
Balerna Centro Breggia, Via San Gottardo 56 a
Pfäffikon SZ Seedamm-Center, Passage
Basel RailCity SBB Bahnhofpasserelle first floor/
(middle salesfloor)
Güterstrasse 115; Claraplatz / Rebgasse 2;
Rapperswil Obere Bahnhofstrasse 44
Gerbergasse 70; Shopping-Center St.-Jakob-Park
Regensdorf EKZ Regensdorf;
Bellinzona Via Nosetto 4
Riedthofstrasse 124 (head office)
Berne Von-Werdt-Passage 3;
Rorschach Hauptstrasse 67
Waaghaus-Passage 8
Sarnen EKZ MM Sarnen-Center, Nelkenstrasse 5
Biel / Bienne Bahnhofstrasse 6; Nidaugasse 60;
Schaffhausen Vordergasse 41;
CARREFOUR, Centre Boujean, Zürichstrasse 24
Herblinger Markt
Brig Bahnhofstrasse 4
Schönbühl SHOPPYLAND, Industriestrasse 20
Brugg Neumarktplatz 5
Sierre Noës, Centre Commercial
Buchs SG Bahnhofstrasse 28
Signy Centre Commercial, Rue des Fléchères
Bülach Marktgasse 21;
Sion Rue de la Porte-Neuve 21
MIGROS Center Süd, Feldstrasse 85
Solothurn Marktplatz 45
Bulle Grand-Rue 30
Spreitenbach Shopping-Center Tivoli
Burgdorf Poststrasse 7; EKZ Neumarkt
Stans EKZ Länderpark
Chur EKZ City Shop
Steinhausen EKZ Zugerland
Collombey Centre Commercial, Parc du Rhône
Sursee EKZ Surseepark
Crissier Centre MIGROS
St. Gallen Multergasse 31; EKZ Neumarkt 1
Delémont Avenue de la Gare 42
St. Margrethen Rheinpark
Dietlikon CARREFOUR, Industriestrasse 28
Thun Bälliz 4; LOEB, Bälliz 39
Écublens Centre Commercial du Croset 1
Vernier CARREFOUR, Route de Meyrin 171
Egerkingen Gäupark, first floor
Vevey Centre Commercial Midi Coindet
Emmenbrücke Emmen-Center
Villars-sur-Glâne CARREFOUR,
Frauenfeld EKZ Passage, Bahnhofstrasse 70
Route de Moncor 1
Fribourg Rue de Romont 12
Visp Bahnhofstrasse 2
Geneva Centre Commercial Planète Charmilles;
Volketswil VOLKI-LAND, Industriestrasse 1
Eaux-Vives 2000; Rue de Rive 10; Rue de Carouge 18;
Wallisellen Glattzentrum,
Rue du Mont-Blanc 17
middle salesfloor
Geneva-Carouge Centre Commercial
Weinfelden Zentrum-Passage 1
La Praille, Route des Jeunes 10
Wil SG Obere Bahnhofstrasse 21
Geneva-Meyrin Centre Commercial
Winterthur EKZ Neuwiesen,
Grancia Parco Commerciale Grancia
Strickerstrasse 3;
Heimberg CARREFOUR, Blümlisalpstrasse 61
Marktgasse / Obere Kirchgasse 22;
Hinwil CARREFOUR, Wässeristrasse 38
Zentrum Stadttor / Bahnhofplatz 5
Kreuzlingen Hauptstrasse 55
Wohlen Bahnhofstrasse 5
Kriens EKZ Pilatus-Markt
Yverdon Rue du Lac 24
La Chaux-de-Fonds Avenue Léopold-Robert 33;
Zug EKZ Metalli,
CARREFOUR, Boulevard des Éplatures 20
Baarerstrasse 16
Langenthal Bärenplatz / Marktgasse 12–14
Zurich Bahnhofstrasse 87; Löwenstrasse 56;
Lausanne Rue de Bourg 17; Rue Mauborget 12
City Shopping, Löwenstrasse 35;
Liestal Rathausstrasse 29
EKZ Letzipark, upper salesfloor;
Locarno Largo Zorzi
Stauffacherstrasse 35; Theaterstrasse 12
Lucerne Kapellgasse 7; Pilatusstrasse 7
Zurich-Oerlikon EKZ Neumarkt,
Lyss Hirschenplatz 1a
Hofwiesenstrasse 350
Marin-Épagnier Centre Commercial MANOR Marin,
Avenue Champs-Montants
Martigny Centre Commercial Migros Manoir
Mels Pizol Center, Grossfeldstrasse 63
Montreux Centre Forum, Place du Marché 6
Morges Grand-Rue 10
Meyrin EPA, Centre Commercial
64
Situation in April 2006
ADDRESSES
Company addresses
Riedthofstrasse 124
CH-8105 Regensdorf
Tel. ++ 41 ( 0 ) 43 388 77 11
Fax ++ 41 ( 0 ) 43 388 77 12
E-mail: mobilezoneholding @ mobilezone.ch
www.mobilezoneholding.ch
Investor Relations : Wolfgang Gross
Media Relations : Ruedi Baer
mobilezone ag
Riedthofstrasse 124
CH-8105 Regensdorf
Tel. ++ 41 ( 0 ) 43 388 77 11
Fax ++ 41 ( 0 ) 43 388 77 12
E-mail: info @ mobilezone.ch
www.mobilezone.ch
Europea Trade AG
Riedthofstrasse 124
CH-8105 Regensdorf
Tel. ++ 41 ( 0 ) 43 388 76 70
Fax ++ 41 ( 0 ) 43 388 76 77
E-mail: manuel.nieto @ europea.ch
globalzone ag
Riedthofstrasse 124
CH-8105 Regensdorf
Tel. ++ 41 ( 0 ) 43 388 77 11
Fax ++ 41 ( 0 ) 43 388 77 97
E-mail : info @ globalzone.ch
www.globalzone.ch
mobilezone international ag
Riedthofstrasse 124
CH-8105 Regensdorf
Tel. ++ 41 ( 0 ) 43 388 77 11
Fax ++ 41 ( 0 ) 43 388 77 12
E-mail: info @ mobilezone.ch
www.mobilezone.ch
mobilezone net ag
Riedthofstrasse 124
CH-8105 Regensdorf
Tel. ++ 41 ( 0 ) 43 388 77 11
Fax ++ 41 ( 0 ) 43 388 77 12
www.mobilezonenet.ch

©2006 mobilezone holding ag

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