Chart

10 Employee benefits

 

10.1 Number of employees

 

2016

2017

FTE (full-time equivalent)

 

 

Employees – year-end

1,447

 1,482 

Employees – average

 1,368

 1,469 

 

10.2 Personnel expenses

Personnel expenses include the following:

 

 

Notes

2016

2017

CHF 1,000

 

 

 

Salaries and wages

 

133,761

 141,856 

Social security 

 

16,710

 18,461 

Post-employment benefits

 

 

 

 Thereof defined contribution plans

 

1,516

 1,695 

 Thereof defined benefit plans

10.3

6,066

 7,644 

Share-based payment 

10.4

12,878

 12,807 

Termination benefits

 

Other personnel expenses

 

3,286

 4,988 

 

 

 

 

Total personnel expenses

 

174,217

 187,451 

 

10.3 Liability for post-employment benefits: defined benefit plans (IAS 19)

 

10.3.1 Characteristics of defined benefit plans and risks associated with them

 

 

2016

2017

 

Swiss

plans

International plans

Total

Swiss

plans

International plans

Total

Number of plans

 5 

 3 

 8 

5

3

8

 

 

 

 

 

 

 

Actives

 

 

 

 

 

 

 Number

500

99

599

 493 

 96 

 589 

Defined benefit obligation (CHF 1,000)

112,608

4,483

117,091

 119,533 

 4,541 

 124,074 

Weighted average duration in years

21.5

9.3

21.0

 21.0 

 9.8 

 20.6 

 

 

 

 

 

 

 

Retirees

 

 

 

 

 

 

Number

29

29

 31 

 –

 31 

 Defined benefit obligation (CHF 1,000)

 6,523 

 –

 6,523 

 Weighted average duration in years

 18.4 

 –

 18.4 

 

 

 

 

 

 

 

Total

 

 

 

 

 

 

Number

529

99

628

 524 

 96 

 620 

Within the Group, various defined benefit plans exist, which differ in their purpose and financing according to local needs:

 

Country

Benefits

Funded/

Unfunded

Description and risks

Switzerland

(Swiss plans)

Retirement, death-in-service and disability benefits

Funded

Nature of the benefits provided

The pension plans of Tecan Group Ltd., Tecan Schweiz AG, Tecan Sales Switzerland AG and Tecan Trading AG are plans with guarantee of a minimum interest credit on the savings and fixed conversion rates at retirement. Disability and death benefits are defined as percentage of the insured salary.

 

Regulatory framework

The plan provides benefits based on the LPP/BVG law, which stipulates the minimum requirements of the mandatory employer-sponsored pension plan in Switzerland. In particular, annual salary up to CHF 84,600 (amount in 2016) must be insured and the financing is age-dependent with contribution rates in per cent of the insured salary ranging from 7% to 18%. The conversion rate to calculate the annuity based on the accrued savings capital is 6.8% at normal retirement age (65 for men and 64 for women).

 

Under LPP/BVG law, the plan must be fully funded on a static basis at all times. In case of underfunding, recovery measures must be taken, such as additional financing from the employer or from the employer and employees, or reduction of benefits or a combination of both.

 

Specific plan rules

The saving credits for the retirement benefits are defined in percentage of the insured salary. The saving credits for the part of the annual salary between CHF 24,675 and CHF 84,600 are age-dependent and range from 8% to 19%. The saving credits for the part of the annual salary above CHF 84,600 amount to 14% for the employees and to 18% or 19% for the members of the management. The conversion rate for the mandatory part of the savings capital is 6.8% at normal retirement age. For the exceeding part of the savings capital, the conversion rate is defined by the board of trustees.

 

The annual disability pension amounts to 70% of the insured salary, the annual partner’s pension to 50% of the insured salary or to 60% of the current retirement pension. In case of death before retirement an additional lump-sum of 200% of the insured salary is paid.

 

Governance of the plan

The companies are affiliated to the collective foundation Swiss Life Collective BVG Foundation. The collective foundation is a separate legal entity. The foundation is responsible for the governance of the plan; the foundation’s board of trustees is composed of an equal number of representatives from the employers and employees chosen from all affiliated companies. The foundation has set up investment guidelines, defining in particular the strategic allocation with ranges.

 

Additionally, there are pension committees for each affiliated company composed of an equal number of representatives from the company and the employees. The pension committee is responsible for the set-up of the plan benefits.

 

Risks to which the plan exposes the Group

The plan provider Swiss Life Collective BVG Foundation has reinsured the risks disability, death, longevity and the investment risk with Swiss Life Ltd. Therefore, the only risks for the Group are that the Swiss Life Collective BVG Foundation terminates the affiliation contract or increases the premiums.

 

Plan amendments, settlements or curtailments

Sias AG and Xiril AG, acquired through business combination in 2015, were affiliated with the collective foundation Nest Sammelstiftung. Due to the legal integration of these subsidiaries in 2016, the acquired retirement benefit plans were transferred into the existing solution at Swiss Life. The resulting curtailment amounting to CHF 1.4 million was recognized in profit or loss of 2016.

Austria

(International plans)

Long-service leave benefits

Unfunded

Nature of the benefits provided

The severance-payments plan of Tecan Austria GmbH and Tecan Sales Austria GmbH guarantees a one-time lump sum payment, once the employee leaves the company. The plan was closed for new members at December 31, 2002. Plan participants are all employees with at least 3 years of service and an entry-date before January 1, 2003. The membership to this plan is mandatory. 

 

Regulatory framework

The plan provides benefits according to Austrian law (AngG 23 and 23a) which stipulates benefits in case of retirement, death (50%), disability or termination of employment. Vesting is after 3 years of service, whereas all rights forfeit in the case of voluntary termination.

 

The level of the benefits depends on the period of service in the company and amounts to a lump-sum payment of 2 monthly salaries after 3 years of service up to 12 monthly salaries after 25 years of service. The monthly salary is defined as twelfth part of the total annual salary of the last 12 months.

 

Governance of the plan

Only the company (employer) is responsible for the governance of the plan.

 

Risks to which the plan exposes the Group

The plan is exposed to an inflation risk as well as to the risk of salary increases. There is no longevity risk because the payments are due latest at retirement.

 

Plan amendments, settlements or curtailments

There were no major plan amendments, settlements or curtailments during the financial years 2016 and 2017.

Other

(International plans)

Retirement benefits

Unfunded

There are two minor retirement benefit plans in Tecan Japan Co., Ltd. and Tecan Italia S.r.l. for only a limited number of participants.

Other

(International plans)

Retirement benefits

Funded

The Group acquired the SPEware Group in 2016. Immediately before the closing of the transaction, the associated retirement benefit plan was frozen and all contributions to the plan were stopped. The plan was settled in 2017.

 

10.3.2 Amounts recognized in the financial statements

The amounts recognized in the balance sheet are as follows:

 

 

2016

2017

CHF 1,000

 

 

Swiss plans

 

 

 Present value of obligations arising from retirement benefit plans (funded)

112,608

 126,056 

 Related fair value of plan assets

(86,947)

 (94,085) 

 Deficit Swiss plans

25,661

 31,971 

 

 

 

International plans

 

 

 Present value of obligations arising from long-service leave benefit plans (unfunded)

3,429

 3,409 

 

 

 

 Present value of obligations arising from retirement benefit plans (unfunded)

1,056

 1,132 

 

 

 

 Present value of obligations arising from retirement benefit plans (funded)

2,569

 Related fair value of plans assets

(2,569)

 Deficit International plans

4,485

 4,541 

 

 

 

Net liability at December 31 

30,146 

 36,512 

 

The components of defined benefit cost are as follows:

 

 

2016

2017

 

CHF 1,000

Swiss

plans

International plans

Total

Swiss

plans

International plans

Total

Current service cost

7,169

294

7,463

 7,350 

 294 

 7,644 

Past service cost (plan amendment)

24

24

 –

Past service cost (curtailment)

(1,421)

(1,421)

 

 

 

 

 

 

 

Defined benefit cost included in operating profit

5,748

318

6,066

 7,350 

 294 

 7,644 

 

 

 

 

 

 

 

Net interest cost on liability for post-employment benefits

163

80

243

 153 

 64 

 217 

 

 

 

 

 

 

 

Defined benefit cost included in finance cost

163

80

243

 153 

 64 

 217 

 

 

 

 

 

 

 

Total defined benefit cost included in profit or loss

5,911

398

6,309

 7,503 

 358 

 7,861 

 

 

 

 

 

 

 

Actuarial (gains)/losses on obligations

 

 

 

 

 

 

 Changes in demographic assumptions

(40)

(26)

(66)

 (994) 

 (3) 

 (997) 

 Changes in financial assumptions

2,809

17

2,826

 –

 28 

 28 

 Experience adjustments

545

45

590

 5,191 

 (458) 

 4,733 

Return on plan assets (excluding interest income)

(251)

(251)

 137 

– 

 137 

 

 

 

 

 

 

 

Remeasurement loss, included in other comprehensive income

3,063

36

3,099

 4,334 

 (433) 

 3,901 

 

 

 

 

 

 

 

Translation differences, included in other comprehensive income

(25)

(25)

 –

 331 

 331 

 

 

 

 

 

 

 

Total defined benefit cost recognized

8,974

409

9,383

 11,837 

 256 

 12,093 

The Group expects to contribute CHF 5.4 million to its defined benefit plans in 2018.

 

Changes in the present value of the defined benefit obligation are as follows:

 

 

2016

2017

 

CHF 1,000

Swiss

plans

International plans

Total

Swiss

plans

International plans

Total

Balance at January 1

106,054

4,439

110,493

 112,608 

 7,054 

 119,662 

Acquisition through business combination

2,484

2,484

– 

 40 

 40 

Current service cost

7,169

294

7,463

 7,350 

 294 

 7,644 

Past service cost

(1,421)

24

(1,397)

Employee contributions

3,598

3,598

 3,595 

 –

 3,595 

Insurance premiums

(1,771)

(1,771)

 (1,804) 

 –

 (1,804) 

Benefits paid

(2,955)

(363)

(3,318)

 (7,202) 

 (239) 

 (7,441) 

Settlement payments from plan assets

(2,333)

(2,333)

 – 

 (2,482) 

 (2,482) 

Interest expense

953

80

1,033

 788 

 64 

 852 

Actuarial losses

3,314

36

3,350

 4,198 

 (434) 

 3,764 

Gross presentation disability benefits

 6,523 

 –

 6,523 

Translation differences

60

60

 – 

 244 

 244 

 

 

 

 

 

 

 

Balance at December 31

112,608

7,054

119,662

 126,056 

 4,541 

 130,597 

Changes in the fair value of plan assets are as follows:

 

 

2016

2017

 

CHF 1,000

Swiss

plans

International plans

Total

Swiss

plans

International plans

Total

Balance at January 1

84,031

84,031

 86,947 

 2,569 

 89,516 

Acquisition through business combination

1,837

1,837

 – 

 – 

 – 

Employer contributions

5,336

647

5,983

 5,528 

 – 

 5,528 

Employee contributions

3,598

3,598

 3,595 

 – 

 3,595 

Insurance premiums

(1,771)

(1,771)

 (1,804) 

 – 

 (1,804) 

Benefits paid

(2,955)

(2,955)

 (7,202) 

 – 

 (7,202) 

Settlement payments from plan assets

(2,333)

(2,333)

 – 

 (2,482) 

 (2,482) 

Interest income

790

790

 635 

 – 

 635 

Return on plan assets (excluding interest income)

251

251

 (137) 

 – 

 (137) 

Gross presentation disability benefits

 6,523 

 – 

 6,523 

Translation differences

85

85

 – 

 (87) 

 (87) 

 

 

 

 

 

 

 

Balance at December 31

86,947

2,569

89,516

 94,085 

 94,085 

The investment risk for the Swiss plans is reinsured. Therefore the plan assets represent a receivable from the life insurance company.

10.3.3 Actuarial assumptions and sensitivity analysis

Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):

 

 

2016

2017

 

Swiss plans

International plans1

Swiss plans

International plans1

Discount rates

0.70%

1.67%

0.70%

1.39%

Rate of future salary increases

1.75%

2.69%

1.75%

2.51%

Rate of future pension increases

0.00%

0.00%

0.00%

0.00%

Rates for the projection of savings capital2

1.00%

0.00%

1.00%

0.00%

Mortality tables3

BVG2015G

various

BVG2015GT

various

Excluding plan SPEw are due to settlement

2 Swiss plans: the rate is only applied to the mandatory part

3 Calculation models used:
    2016: Model ‘Menthonnex’
    2017: Model ‘Continous Mortality Investigation (CMI)’

Sensitivities of significant actuarial assumptions

The discount rate, the rate of future salary increase and the life expectancy were identified as significant actuarial assumptions. The following impacts on the defined benefit obligation are to be expected:

 

 

 

2016

2017

 

CHF 1,000

Change in actuarial assumptions

Swiss

plans

International plans

Total

Swiss

plans

International plans1

Total

Discount rates

- 25 basis points

4,707

104

4,811

 5,359 

 107 

 5,466 

 

+ 25 basis points

(4,482)

 (104) 

(4,586)

 (4,900) 

 (110) 

 (5,010) 

Rate of future salary increases

- 25 basis points

(853)

 (99) 

(952)

 (821) 

 (106) 

 (927) 

 

+ 25 basis points

629

98

 727 

 826 

 99 

 925 

Life expectancy

- 1 year

(2,641)

(19)

(2,660)

 (1,788) 

 (21) 

 (1,809) 

 

+ 1 year

2,401

 13 

2,414

 1,820 

 10 

 1,830 

(positive = increase in obligation/negative = decrease in obligation)

1Excluding plan SPEw are due to settlement

 

The sensitivity analysis is based on realistically possible changes at the end of the reporting period. Each change in significant assumption was analyzed separately as part of the test. Interdependencies were not taken into account.

10.4 Employee participation plans – share-based payment (IFRS 2)

 

10.4.1 Employee share option plans

The terms and conditions of the outstanding grants are as follows:

 

Plan

Plan terms

 

2016

2017

 

Grant date

Expiry date

Number granted

Exercise price

 

Remaining 
contractual life (years)

Number outstanding

Remaining 
contractual life (years)

Number outstanding

Plan 2010

02.11.2009

02.11.2016

 63,492 

70.0

 

1,854

– 

Plan 2011

02.11.2010

02.11.2017

 52,950 

69.0

 

0.8

6,436

 

Plan 2012

02.11.2011

02.11.2018

 59,998 

57.2

 

1.8

5,853

0.8

 3'691 

Plan 2013

02.11.2012

02.11.2019

 40,953 

69.6

 

2.8

9,483

1.8

 5'320 

Plan 2014

02.11.2013

02.11.2020

 35,112 

95.0

 

3.8

16,856

2.8

 7'492 

Plan 2015

02.11.2014

02.11.2021

 34,260 

100.4

 

4.8

25,858

3.8

 15'563 

Plan 2016

02.11.2015

02.11.2022

 23,569 

135.0

 

5.8

23,646

4.8

 17'831 

Plan 2017

02.11.2016

02.11.2023

 23,907 

162.8

 

6.8

23,907

5.8

 23'016 

Plan 2018

02.11.2017

02.11.2024

 22,071 

212.1

 

6.8

 22'071 

 

 

 

 

 

 

 

 

 

 

Balance at December 31

 

 

 

 

 

4.7

113,893

4.9

 94'984 

 

 

 

 

 

 

 

 

 

 

Thereof exercisable at December 31

 

 

 

 

 

63,090 

 

 23'452 

All plans are granted to members of the management level 3 and 4 and have a contractual life of 7 years. The vesting conditions are one/two/three years of service for 33%/33%/34% of options. One option grants the right to purchase one Tecan share with settlement by physical delivery (equity-settled). All outstanding options are fully covered by the conditional share capital.

 

The number and weighted average exercise price of the share options are as follows:

 

 

2016

2017

 

Weighted average exercise price (CHF)

Number

Weighted average exercise price (CHF)

Number

Balance at January 1

95.87

117,167

112.83

 113,893 

Granted

162.80

23,907

212.10

 22,071 

Exercised

84.82

(23,319)

92.99

 (39,053) 

Forfeited 

82.28

(2,009)

125.63

 (1,342) 

Expired

70.73

(1,853)

69.18

 (585) 

 

 

 

 

 

Balance at December 31

112.83

113,893

144.14

 94,984 

The weighted average share price at the date of exercise was CHF 152.45 in 2016 and CHF 181.19 in 2017.

 

The expenses, recognized in profit or loss, are calculated as follows:

 

The fair value of services received in return for the share options granted is measured by reference to the share options vested multiplied by their fair value at grant date (measurement date). The estimate of the fair value is based on a trinomial model. Changes in the fair value of the option after the grant date do not change the fair value of the services received.

 

Fair value of share options and key assumptions (not yet vested share option plans):

 

Grant

Share price

Exercise price

Expected

volatility1

Option life

Expected

dividends

Risk-free

interest rate

Fair value

Plan 2015

CHF 100.40

CHF 100.40

22.54%

7.0 years

2.42%

0.45%

CHF 18.54

Plan 2016

CHF 135.00

CHF 135.00

26.41%

7.0 years

2.10%

(0.20%)

CHF 29.24

Plan 2017

CHF 162.80

CHF 162.80

29.42%

7.0 years

1.75%

(0.31%)

CHF 40.47

Plan 2018

CHF 212.10

CHF 212.10

22.73%

7.0 years

1.30%

(0.01%)

CHF 42.37

  1. Historic volatility with an underlying period that depends on the option life

Data source: Bloomberg

10.4.2 Employee share plans

10.4.2.1 Performance share matching plans (PSMP)

The terms and conditions of the outstanding grants are as follows, whereby all shares are delivered physically and free of charge (except for mandatory investment):

 

Arrangement

Employees entitled/grant date

Number of shares granted

Fair value at grant

Vesting period

Vesting conditions

Performance share matching plan (PSMP) 2015

Initial grant

Extended Management Board

and other management

on April 16, 2015

20,727 shares

CHF 130.70

Graded vesting from January 1, 2015 to December 31, 20171

Three years of service

Mandatory investment 

Up to 50% of the target cash bonus 2014

Extended Management Board

on April 16, 2015

4,847 shares

CHF 130.70

Immediate vesting1

None

Matching shares

Extended Management Board

and other management

on April 16, 2015

63,935 shares

(maximum of potential

shares granted)

CHF 126.20

January 1, 2015 to

December 31, 2017

Three years of service and performance target

Performance share matching plan (PSMP) 2016

Initial grant

Extended Management Board

on March 10, 2016

20,981 shares

CHF 146.95

Immediate vesting1

None

Other management

on May 23, 2016

2,335 shares

CHF 142.25

 

 

Matching shares

Extended Management Board

on March 10, 2016

52,453 shares

(maximum of potential

shares granted)

CHF 143.45

January 1, 2016 to

December 31, 2018

Three years of service and performance target

Other management

on May 23, 2016

5,838 shares

(maximum of potential

shares granted)

CHF 138.75

 

 

Performance share matching plan (PSMP) 2017

Initial grant

Extended Management Board

on March 9, 2017

17,859 shares

CHF 164.25

Immediate vesting1

None

Additional grant CEO <br/>on April 11, 2017

7,000 shares

CHF 156.55

Other management <br/>on May 2, 2017

1,901 shares

CHF 169.55

Matching shares

Extended Management Board

on March 9, 2017

44,648 shares

(maximum of potential shares granted)

CHF 160.75 

January 1, 2017 to December 31, 2019

Three years of service and performance target

Additional grant CEO <br/>on April 11, 2017

3,000 shares

(maximum of potential shares granted)2

CHF 153.05

Other management <br/>on May 2, 2017

4,753 shares <br/>(maximum of potential shares granted)

CHF 166.05

  1. Vested shares are blocked until the end of the performance period.
  2. Matching share factor capped at 0.43 instead of 2.5

Number of shares outstanding at December 31:

 

Employee shares

2016

2017

Balance at January 1

232,232

 223,879 

Granted

81,607

 79,161 

Deblocked and available to the participants

(47,290)

 (82,858) 

Forfeited 

(42,670)

 (8,511) 

 

 

 

Balance at December 31

223,879

 211,671 

 

 

 

Thereof vested, but blocked until the end of the performance period

41,884

 48,034 

 

The expenses, recognized in profit or loss, are calculated as follows:

 

The fair value of services received in return for the shares granted is measured by reference to the shares vested multiplied by their fair value at grant date (measurement date). The fair value at grant represents the market value of one Tecan share adjusted for expected dividend payments during the vesting period. Changes in the fair value of the shares after the grant date do not change the fair value of the services received.

 

The number of matching shares is determined based on the following formula: number of shares from initial grant plus number of shares from mandatory (if applicable) times the matching share factor. The matching share factor is dependent on the achievement of specific economic profit targets. In any case, the matching share factor will not be lower than 0.0 and not higher than 2.5.

 

Number of matching shares expected to vest at December 31, 2017:

 

Year/plan

Initial grant1

Mandatory

investment1

Total base

shares

Matching share

factor applied

Matching shares

expected to vest2

PSMP 2015 

18,671

4,549

23,220

2.50

58,050

PSMP 2016 

21,274

n/a

21,274

2.50

53,185

PSMP 2017

19,760

n/a

19,760

2.50

49,400

PSMP 2017/CEO

7,000

n/a

7,000

0.43

3,000

1 Only shares that qualify for matching shares

2 Not adjusted for expected fluctuation

 

10.4.2.2 Other share plans

The terms and conditions of the outstanding grants are as follows, whereby all shares are delivered physically and free of charge:

 

Plan

Employees entitled/grant date

Number of shares granted

Fair value at grant

Vesting period

Vesting conditions

Share plan 2017 – Board of Directors (BoD)

Annual grant

Board of Directors

on April 11, 2017

2,064 shares

CHF 156.55

Graded vesting from May 1, 2017 to 
April 30, 2018

One year of service

 

10.4.3 Total expenses recognized

 

2016

2017

CHF 1,000

 

 

Expenses arising from equity-settled share option plans

639

 805 

Expenses arising from performance share matching plans

11,920

 11,679 

Expenses arising from other share plans

319

 323 

 

 

 

Total expenses recognized

12,878

 12,807 

EN DE