SFS Group AG

Annual Report

Inventing

success

together

To the online report

2

SFS Group AG | Annual Report 2022

Table of contents

SFS in brief

4

Key takeaways

6

Financial overview

7

Management report

8

Strategy

13

Markets

16

Technology

18

Segment report

21

Engineered Components

21

Fastening Systems

24

Distribution & Logistics

27

Success stories

30

Corporate Governance

33

Group structure and shareholders

34

Capital structure

35

Board of Directors

36

Group Executive Board

42

Compensation, shareholdings and loans

46

Shareholders' participation

46

Changes of control and defense measures

47

Auditing body

47

Information policy

48

Blocking periods

48

Non-applicability/negative statement

48

Compensation report

51

Introduction

52

Fundamental principles of the compensation system

52

Process used to determine compensation

54

Compensation in the year under review and in

55

the previous year

Shares owned by the Board of Directors and the

57

Group Executive Board

Auditor's report

58

Financial report

61

Financial statements SFS Group

61

Consolidated income statement

62

Consolidated balance sheet

63

Consolidated statement of changes in equity

64

Consolidated cash flow statement

65

Notes

67

Auditor's report

96

Financial statements SFS Group AG

103

Information for shareholders

112

SFS Group AG | Annual Report 2022

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SFS in brief

Value engineering specialist

SFS is one of the world's leading suppliers for precision components and assemblies, mechanical fastening systems, quality tools, and logistics systems. Positioned as a value engineering specialist, SFS creates added value for its customers in the form of cost savings or increases in value by implementing tailored solutions for niche applications - which are often critical for success. SFS Group AG operates in the three segments Engineered Components, Fastening Systems and Distribution & Logistics, which represent the company's different business models.

The history of SFS began in 1928 with a hardware store in Altstätten (Switzerland). The cornerstone was laid for the development of industrial activities in 1960 when the company set up its own screw manufacturing plant in Heerbrugg, Switzerland.

Engineered Components segment

In the Engineered Components (EC) segment, SFS partners with customers to develop and manufacture customer-specific precision components and assemblies, as well as mechanical fastening solutions. This segment comprises the Automotive, Electronics, Industrial and Medical divisions, and it sells its products and services under the brands SFS (Automotive, Industrial), Unisteel (Electronics) and Tegra Medical (Medical).

Fastening Systems segment

In the Fastening Systems (FS) segment, which consists of the Construction and Riveting divisions, SFS develops, manufactures and markets application-specific mechanical fastening systems, including under the brands SFS, HECO, TFC (Construction), and GESIPA® (Riveting).

Distribution & Logistics segment

In the Distribution & Logistics (D&L) segment, SFS positions itself as the leading sales and logistics partner for direct and indirect materials in the areas of quality tools, workshop and personal protective equipment, fasteners, and other C-parts for customers in the industrial manufacturing and construction industries in Europe. In addition, customized logistics and process solutions contribute in making customers more competitive. The segment is made up of the D&L Switzer- land and D&L International divisions, and distributes its products under its own strong brands SFS, Hoffmann, GARANT and HOLEX, as well as other leading manufacturer brands.

SFS Group

SFS Group has manufacturing sites and distribution companies at 140 locations in 35 countries around the world. It generated sales of CHF 2,746.1 million in the 2022 financial year with a workforce of approximately 13,500 (FTE).

SFS Group AG | Annual Report 2022 | SFS in brief

4

At your side 24/7

SFS is a reliable companion throughout your day, from early in the morning to late at night, seven days a week. Not many people realize this, since our precision components, mechanical fastening systems and quality tools are embedded in the successful products and processes of our customers, where they often perform critical functions.

Your first contact with SFS products happens early in the morning when using your coffee machine or your smart- phone. Driving to work, you are also surrounded by numerous SFS products: integrated into your car's safety systems such as seat belts, airbags and braking systems, they help to save your life in the event of an accident. At work, hard disk drives function with high-precision miniature SFS compo- nents. SFS products can be found in many electronic lifestyle products, such as adventure cameras, smart watches and smart home devices, as well as a growing number of AR/VR solutions. In the field of healthcare, our precision components in the form of bone screws, dental implants and surgical instruments play an important role in improving your quality of life.

Our value proposition:

Creating sustainable added value for the customer

SFS components embedded into a customer's product or used in the production process often account for less than 1% of the total product cost. But the costs at the customer end arising from procurement, logistics and handling operations can be several times the actual cost of these products. That is why we are not primarily focusing on reducing our direct product costs and differentiating ourselves on price, but on optimizing our customers' overall product-related costs.

This approach generates significantly more cost-saving potential and allows us to create sustainable added value for our customers. Our value engineering model focuses on product design, definition of manufacturing processes and leveraging the power of digitalization. The result: tailored products and intelligent solutions that increase the competitiveness of our customers. Hence, the SFS solutions lead to greater differentiation and strengthen collaborative partner- ships.

Worldwide presence

America

Europe

Asia, others

CHF 508 million sales

CHF 1,785 million sales

CHF 453 million sales

2,059 FTE

7,468 FTE

3,755 FTE

With 140 manufacturing, warehouse and sales locations worldwide, SFS is strategically well positioned in respect of customer proximity. As a result, SFS and its customers benefit from superior supply reliability thanks to regional and robust supply chains.

SFS Group AG | Annual Report 2022 | SFS in brief

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SFS Group AG published this content on 03 March 2023 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 03 March 2023 05:38:01 UTC.