epiq annual report 1999

epiq is a

‘contract electronic

manufacturer’ (cem) with

a high quality organization

and extensive expertise

in its key areas.

Epiq uses an electronic design

which has been developed by either

the end customer or by Epiq itself

in order to manufacture

electronic system boards or

full electronic designs

for its customers.

contents

1. Letter to the shareholders 3

2. The epiq share 5

3. Key-figures 6

4. Epiq Profile 9

4.1. Introduction 9

4.2. Founding 9

4.3. Group Structure 10

4.4. Overview of the activities 11

5. Epiq Business and Products 13

5.1. Products 13

5.2. Customers 15

5.3 Research and Development 16

5.4. Total Quality Organization 16

6. Epiq’s strategy 19

7.The Company’s Administration,

Management and Supervision 21

8. Selected Summary Financial Data 23

Epiq99def 30-03-2000 15:31 Pagina 1

Epiq99def 30-03-2000 15:31 Pagina 2

1. Letter to the shareholdersWe are satisfied about the results in the

‘household appliances’ market:

• The integration of Frankonia enlarged the

product range of the group to larger household

appliances, which will give us additional

growth opportunities the following years.

• The successful start-up of our Mexican plant

in 1999 and the introduction of our know-how

with two main American manufacturers of

household equipment must enable our group

to become a market leader in the North

American market the following years.

We are extremely satisfied with the growth of

the automotive market. Mass production for

several main customers was introduced in

1999 and is giving us excellent references for

new customers. This successful launch has

enforced our market position strongly in order

to elaborate this market fully the following

years. Different new projects have been

introduced, and will lead to mass production

in the following years.

The latest forecast on growth in the automotive

outsourcing in Europe is in the 35% per annum

range and confirms our expectations of the

development of this more recent cem market.

Epiq therefore believes that the strategy it

implemented is indeed the right one.

The telecom market still remains a deman-

ding market where epiq can elaborate its

position if synergies can be found with our

existing production activities. In 1999, telecom

sales have risen due to the increased

production for a new customer who doesn’t

own a production facility.

Other sales are decreasing due to our

increased attention to our two core markets

(household and automotive).

The geographic expansion of our group

remains focused on our global ambitions. In

1999, the facility in Mexico was organized. The

actual workforce of 100 workers will triple in

2000, which demonstrates the success of our

commercial efforts on the American market.

Many customers are enthusiastic about our

expansion in Mexico and it is epiq’s intention

to launch further activities in the coming

years (China, Brazil, India, …).

The competition did not change radically in

1999. The bigger us players like sci, solectron

and flextronix are the main global players in

the market. On the other hand, European

competitors like Kyrrel and Cofidur are

starting to organize themselves

internationally but remain strongly focused

on their core markets.

We expect a consolidation in the cem business

in the near future where epiq will remain an

active player. In January 2000, we have

acquired the German cem-manufacturer, fmc

in order to improve our commercial position

on the German automotive market. Beyond

that, we will continually evaluate merger and

acquisitions possibilities actively.

The epiq Quality Policy, in both its day-to-day

continuous improvement, and its long-term

strategic objectives, saw several milestones

achieved during the past year. The most

important achievement was the qs9000

certification of our Western locations. Together

with the usual customer’s quality audits, these

results demonstrated our commitment and

our success to fulfil our quality objectives.

With the exception of the acquisition of fmc,

there were no significant events subsequent to

year-end.

The Board of Directors proposes to appropriate

the loss of the year as recorded in the

accompanying financial statements.

Yours Sincerely,

Tessenderlo, March, 2000

Roland Duchâtelet, Chairman

Norbert Hofer, ceo

Gilles Bernard, ceo

Epiq reported

consolidated revenues

of Euro 52 million in 1999,

up 72 % from the revenues

of the previous year.

Comparatively

in a year by year

comparison to 1998,

household appliance sales

increased by 125 %,

automotive was up 71 %

and telecom 31 %.

Other sales decreased

by 44 % due to the recent

sale of the test and

automation department

in June 1998.

Gilles Bernard

& Norbert Hofer

Epiq99def 30-03-2000 15:31 Pagina 3

04-01-1999 30-12-1999

0

1

2

3

4

5

6

0

500

1000

1500

2000

2500

3000

EPIQ INDEX

Epiq99def 30-03-2000 15:31 Pagina 4

2. the epiq shareThe table on the right describes the most

important statistics concerning the epiq share

in 1999. At the beginning of the year the price

of the epiq share was around 3 Euro and the

share fluctuated in 1999 between 1.5 and

3 Euro.

Key market statistics 1999 epiq

easdaq Stock Exchange: epiq

price 1/1/99 : 3,95

highest 1999 : 4,15

lowest 1999 : 1,5

price 31/12/99 : 1,975

Free Float 35,2%

Total number of shares 12.171.000

Market capitalisation** 24.037.72

Price/Earnings ratio

Lowest price/Net result n.r.

Highest price/Net result n.r.

Price/ Cash-flow ratio

Lowest price/cash-flow 99 : 13,84

highest price/cash-flow 99 : 38,29

Net equity pro share *** 2,09

* All figures are expressed in Euro

** Market capitalisation is calculated at

share price per 31/12/1999

*** shareholders equity at 31/12/99

The positive evolution which has started at

the end of the year 1999, has continued in

2000 and is shown in this graph, which

compares the evolution of the epiq share with

the evolution of the easdaq-index.

Since 1/1/99

the epiq share

is quoted in Euro.

Epiq99def 30-03-2000 15:31 Pagina 5

turnover evolution

ebit evolution

cash flow evolution

quarterly turnover evolution

1994 1995 1996 1997 1998 1999

0

10.000

20.000

30.000

40.000

50.000

60.000

1994 1995 1996 1997 1998 1999-4.000

-3.000

-2.000

-1.000

0

1994 1995 1996 1997 1998 1999-2.500

-2.000

-1.500

-1.000

-500

0

500

1.000

1.500

2.000

J

J J

J

Q1 Q2 Q3 Q4

0

2.000

4.000

6.000

8.000

10.000

12.000

14.000

16.000

18.000

20.000

1997

1998

J1999

Epiq99def 30-03-2000 15:31 Pagina 6

3. Key figures

Overview of figures of epiq Group

for 1994 - 1998: unaudited, pro-forma figures

for 1999: audited figures

Operating results 1994 1995 1996 1997 1998 1999

turnover 28.935 29.250 28.791 33.235 38.492 52.390

ebit -1.338 -493 -3.396 -2.947 -917 -1.841

ebitda 262 999 -1.844 -1.212 1.207 1.171

Cash flow and capital expenditures 1994 1995 1996 1997 1998 1999

Cash flow (*) -195 -265 -1.919 -148 1.692 1.350

Depreciation 1.600 1.492 1.552 1.735 2.034 3.012

Capital expenditure 1.619 3.413 3.730 1.637 6.574

(*) : cash flow = net profit + depreciation and amortization

Balance sheet structure 1994 1995 1996 1997 1998 1999

Shareholders’ Equity 3.333 7.417 4.124 7.359 27.224 25.499

Net indebtedness (*) 7.652 3.870 4.965 3.645 -15.176 -1.340

Working capital -1.987 2.618 -2.902 -1.780 18.252 14.244

(*) : bankdebts and overdrafts - cash and cash equivalents

Quarterly turnover decomposition Q1 Q2 Q3 Q4

1997 8.151 8.263 7.887 8.929

1998 9.879 10.379 8.478 9.756

1999 8.809 12.619 12.674 18.287

Epiq99def 30-03-2000 15:31 Pagina 7

Epiq99def 30-03-2000 15:31 Pagina 8

4. Epiq Profile3.1 Introduction

Epiq is a ‘contract electronic manufacturer’

(cem) with a low-cost high quality organization

and extensive expertise in its key areas.

The headquarters are located in Germany

(operational) and Belgium (finance) and

production facilities in Germany, France, the

Czech Republic, Bulgaria, Mexico and China.

Epiq’s customers include main automotive

equipment suppliers, household electronics

manufacturers and telecommunication

equipment manufacturers throughout Europe.

Epiq manufactures Electronic System Boards to

customers’ design and also as part of a full

electronic design and manufacturing service.

The company does not sell products to end-

users. Epiq has a total staff of 1605.

3.2 Founding

The company was formed in 1998 as a result

of the merger of four companies:

• Sigma Delta n.v., a Belgian company

specializing in household and industrial

electronics, with product development

facilities in Belgium and a manufacturing

site in Bulgaria

• Epiq s.a.r.l., a French company specializing

in automotive electronics and

telecommunications electronics, with a

manufacturing site in Dieppe, France

• SM2E s.a., a French company with expertise

in cem for automotive electronics with

product development and manufacturing

in Besançon, France; and

• Eker GmbH, specializing in household

electronics, having product development

in Germany and manufacturing sites in

Germany and in the Czech Republic.

In May 1999, epiq acquired Frankonia GmbH,

a Nurnberg based, German contract electronic

manufacturer.

Frankonia GmbH was founded in 1989 by Mrs.

and Mr. Flesschner. Frankonia’s largest

customers include Miele, Siemens and aeg.

The main products are components for large

household appliances (washing machines,

vacuum cleaner and others)..

The collaboration with the epiq group dates

back to 1998, and epiq was filling in their

demand for production capacity in Bulgaria. In

the process of increasing this collaboration, an

integration of Frankonia with the epiq group

was the next logical step. This integration

enlarged substantially the market potential of

the epiq group in the market for larger

household appliances.

In December 1999 epiq founded a joint venture

with Fremach. The Fremach Group specializes

in high added value - plastic injection molding

and finishing.

Epiq99def 30-03-2000 15:31 Pagina 9

3.3 Group structure

The following chart describes the corporate

structure of epiq and certain related parties

as of 31 December , 1999, including the

acquisition of fmc on January 4th 2000.

Fremach’s products can be found in

automotive and consumer electronics

assemblies, as well as a wide range of

telecommunications, office and white goods

applications. This joint venture has been

created in order to offer the main customers

sub-systems where the electronic and plastic

components are integrated.

Hofer family17%

Epiq EABulgaria

Prod. HH & A450 people

SM2E saFrance, BesanconProd. A & local

130 people

Epiq sarlFrance, Dieppe

Prod. A & T160 people

Eker SpolCzech Republic

Prod. HH300 people

Eker GmbHNurnberg

R&D, sales HH28 people

FMCNurnbergProd. A&O50 people

Fremach Epiqsystem builders

Diepenbeek, Belgium50%

Sigma-Delta Holding nv43%

Management5%

Public35%

epiq nvBelgium

R & D, finance10 people

FrankoniaNurnberg

Prod. R&D HH300 homeworkers

Eker MexicoSaltillo

Prod. HH (&A)80 people

France (28%)

Germany (31%)

Belgium (6%)

Mexico (13%)

Netherlands (5%)

Slovenia (1%)

Switzerland (4%)

UK (5%)

Other (8%)

Epiq99def 30-03-2000 15:31 Pagina 10

3.4 Overview of the activities

epiq’s main activities:

• Product development: working with oem

customers and in close collaboration with

component- and pcb- manufacturers, epiq

designs a specific product and packaging

configurations to satisfy the customer’s

requirements for product cost, functionality,

manufacturability and reliability. In the

selection of substrate materials, epiq advises

its customers on a number of factors,

including cost, mechanical strength,

electrical performance and thermal

characteristics. In the selection of integrated

circuits, epiq provides assistance to its

customers with respect to critical issues

such as size, power requirements and

package type;

• Process planning: when a product has been

developed, it is necessary to plan and

organize an efficient manufacturing process;

• Board stuffing: production – these processes

include the exact placement and micro-

connection of miniaturized components on

substrate and require the design and

effective implementation of fine tooling,

extensive automation and advanced vision

systems capable of reliable, high volume

throughput and sophisticated test

capabilities. Examples of components

include application specific integrated

circuits (‘ASICs’), standard integrated circuits

(‘ICs’), transistors, diodes, capacitors,

resistors and other components such as

relays, switches, wires, sockets, connectors,

fuses, lcd or led displays;

• Board testing: testing whether all

components are present and whether the

board shows the desired electrical behavior;

• Plastic injection mould design &

manufacturing: the production of moulds

from which casings, that surround pcbs to

form a module, are produced;

• Manufacture of casings using plastic

injection moulds;

• Module assembly: attaching the circuit

board to other parts of the oem’s product,

such as plastic housing;

• Testing the assembled module; and

• Toolmaking: the production of most

products requires some tools (such as

cutting tools and injection tools to optimize

production efficiency).

By combining any number of the above

activities, epiq is able to offer the customer

a service ranging from the assembly of

components supplied by the customer

through to a complete turnkey project

involving the development, assembly and

placing of a pcb in a module.

epiq has seven production facilities: in

Besançon (France), Dieppe (France),

Röthenbach (Germany), Adelsdorf

(Germany),Tremosna (Czech Republic),

Botevgrad (Bulgaria), Saltillo (Mexico). epiq’s

production facilities offer modern surface

mount technology (‘smt’) as well as more

traditional ‘pin through hole’ (‘pth’) automated

assembly lines and manual assembly lines.

In addition epiq has five product development

centres in Tessenderlo (Belgium), Besançon

(France), Röthenbach (Germany), Nürnberg

(Germany) and Sofia (Bulgaria).

Epiq is a multi-product group with over

200 products in production, selling its products

to a wide customer base of approximately

80 customers.

The following graphs

show an overview

of the sales per country

and per continent.

Europe (84%)

America (13%)

Other (3%)

Epiq99def 30-03-2000 15:31 Pagina 11

Epiq99def 30-03-2000 15:31 Pagina 12

The historical evolution of sales

per segment is as follows:

5. Epiq Business and Products 5.1 Products

The principal products for which

Epiq provides design, assembly

and other services are:

• Automotive equipment;

• Household appliances;

• Telecoms equipment;

• Other appliances

The following graph divides the sales

for 1999 into automotive, household,

telecom and other.

This historical chart clearly shows the

concentration of the group turnover on our

core competences, the household and the

automotive market.

The increase of the household market can

clearly be distinguished. Due to the internal

growth of 45 % in 1998 and 10 % in 1999 (to be

calculated) and the acquisition of Frankonia

in 1999, the turnover of this business unit

within epiq doubled in two years’ time.

The increase of the turnover of the second

‘core’- business unit has not been so

exponential. Due to the clearly longer

time-lag in realizing production-turnover in

the automotive sector, we can only distinguish

the increase of the automotive turnover from

1999 on. This is clearly shown by the turnover

evolution pro quarter in 1999, as shown in the

table below :

Examples of products relevant to each

product group listed above are described in

more detail below, although these are subject

to modification according to the requirements

of specific customers.

1995 1996 1997 1998 1999

0

20

40

60

80

100

%

Household Automotive Telecom Other

Household (66%)

Automotive (19%)

Telecom (7%)

Other (8%)

Turnover evolution pro quarter and pro segment in 1999 (in mio Euro)

Q1 Q2 Q3 Q4 Total

Household 6 9,6 8,4 10,5 34,5

Automotive 1,6 1,7 2,1 4,6 10

Telecom 0,5 0,7 1,2 1,3 3,7

Other 0,7 0,6 1 1,8 4,1

Total 8,8 12,6 12,7 18,3 52,3

Epiq99def 30-03-2000 15:32 Pagina 13

Small household appliances

Epiq produces over 100 types of pcbs and

modules for small household appliances.

Small household appliances are mainly found

in the kitchen and include items such as

toasters, kettles, frying apparatus and coffee

machines. Epiq’s products for small household

appliances can be broken down into four main

categories:

• Toaster components, such as adjustable

toaster control modules and position

sensitive toaster controls. The latter allows

the user to pre-set the toasting time with

a rotational button and the controller

continuously measures the temperature

on an internal chip.

• Shut-off mechanisms. Position sensitive

auto shut-off mechanisms are safety

systems which turn off the electrical power

of irons if they are left immobile in an

ironing position for a time longer than

30 seconds horizontally or 8 minutes

vertically. A neon light indicates whether

the heating element is active or not. This

principle is not limited to irons and can be

used in a multitude of applications. Another

example of a shut-off mechanism is a

‘time-out auto shut-off module’ which is

used in coffee machines. The coffee

machine switches itself off automatically

after a fixed period of time. The auto

shut-off mechanism has other applications

in small household appliances such as

frying pans, cooking plates, steaming pots,

heating apparatus and ovens.

• Motor control for kitchen appliances.

Epiq produces motor controls for kitchen

appliances such as mixers, blenders, food

processors, cleaners, bread-slicing machines

and can-openers.

• Timer switches. Timer switches are compact

units, which can be used in any household

appliance. Timer switches are normally sold

with a standard moulding and are used in

products such as coffee machines, egg

cookers, ovens, irons, toys and fitness

apparatus.

Automotive equipment

New cars have in recent years tended

to contain an increasing proportion of

electronics with nearly all new automotive

subsystems containing more electronics than

in previous car generations. New applications

and technologies, such as suspension and

steering controls, chassis control, intelligent

cruise control, automatic collision-avoidance,

satellite-based navigation systems, electronic

transmission control, electronic accelerator

pedal, sensors and smart airbags have lead

to an increasing demand for additional

electronics. Such electronics are highly

complicated and have to be of the highest

quality. The main automotive products that

epiq manufactures for automotive equipment

suppliers include:

• Engine immobilizers;

• Infrared remote control devices for opening

car doors (both emitters and receivers);

• Various sensors;

• pcbs for car dashboards;

• Car radio controllers;

• Buzzers to show when car lights have been

left on;

• Car radio front pieces, including led displays

and switches;

• pcbs to control the motors for electric

headrests and electric windows;

• Speed rythm wiper;

• Electric control rearview mirror.

epiq is currently developing a new pcb for

car dashboards, which controls the electric

network within the car. These boards for

‘multiplexing information’ have been

produced as a test run by the SM2E sa for

Valeo on behalf of Peugeot and it is intended

to start mass production in 1999.

Epiq is also currently developing a ‘control

light for automatic gear box’ in collaboration

with Bourbon for Renault.

Epiq99def 30-03-2000 15:32 Pagina 14

Epiq intends to seek new customers for

these products who are involved in the

manufacturing of shavers, vacuum cleaners

and power tools and complete controls for

white household products as dryers, laundry

machines, dish washers,….

Larger household appliances

Through its acquistion of Frankonia in

Germany, epiq has acquired an important

business unit producing electronics for larger

household appliances.

Frankonia with its two production sites in the

Nürnberg area (Bavaria) has been a long time

supplier for the big German producers of large

household appliances, e.g. Miele, aeg and

Bosch.

Over the last years, Frankonia has developed

to a No. 1 supplier in terms of quality, price

and time-to-market.

Actually, the main products produced for this

market are;

• Motor control systems for vacuum cleaners

• Electronics for canal surveillance and

rainwater use

• Motor controls for pumps

• Power supply units

• Processor-controlled fluorescent lamp

ballasts for the lighting industry

• Power-saving appliances

• Control panels for washing machines

• Control panels for stoves and dishwashers

Epiq is convinced that new and additonal

customers can be sought for this newly

acquired technology and production site.

Other appliances

Unlike the household appliances described

above, higher value and complexity

characterize epiq’s products for other

appliances. Examples of other such appliances

include televisions, video recorders, fans,

motorized blinds. Products manufactured by

epiq for manufacturers of such appliances

include:

• A module which can be slotted into a televi-

sion to allow for pay per view by credit card;

• A new type of electricity meter to measure

domestic consumption;

• pcbs for videos and televisions;

• A pcb which controls the motor unit in

motorised domestic exterior blinds.

In the future epiq intends to extend its

activities to include production of modules for

industrial fans and heating systems, as well

as systems with wind and light sensors,

which automatically control the movement

of exterior blinds on buildings.

The Company is currently developing a wrist

watch which also acts as a blood pressure and

heart rate monitor. The Company is also

developing a baby phone and a baby night

watch product.

Epiq99def 30-03-2000 15:32 Pagina 15

3.2 Customers

The Company’s customers are a diverse group

of oems, which are principally engaged in the

household appliance, telecom and automotive

sectors.

The principal customers of epiq in 1999 are set

out by sector in the table below:

Sector: Automotive Equipment Manufacturers

Customers: Texas Instruments Inc., trw,

Magneti Marelli sa, Clarion sa, Valeo sa, Brose

Fahrzeugteile GmbH & Co., Sylea sa, Wehrle

Autoelektronik GmbH, dav sa, vdo, Eaton,

Electricfil, Klaxon

Sector: Manufacturers of Household Appliances

Customers: Rowenta, Philips, Hamilton

Beach/Proctor-Silex Inc., aeg Electrolux, Bosch-

Siemens, Petra, Severin GmbH, Robert Krupps

GmbH & Co, kg, Wolf Klimatechnik, Calor,

Moulinex sa, De Longhi, Brudermüller,

bsg-Schalttechnik, Cepem, De Dietrich

Thermique, dik, Effeplast, Gk-elektronik,

Investix, Luxoplast, Neff, Proxxon sa, Saunier,

Seb, Somfy, Sonlux, Tefal, T-fam, Thomson,

Toshiba, Wiesauplast, X Troncs GmbH

Sector: Telecom Equipment Manufacturers

Customers: Philips, Sagem sa, Alcatel Business

Systems sa, Inforéalité, Schmidt Telecom,

Sagem

Sector: Manufacturers of other Appliances:

Customers: Maico, Jeux Nathan sa, ies GmbH,

Siemens, Tailleur, Ufesa

Telecom equipment

Epiq provides cem services in relation to

the following telecom equipment:

• A complete printer, including packaging

and brochure;

• Power supply units for telephones;

• Pay-tv decoders for the Italian market;

• pcbs for gsm and cordless telephones;

• pcbs for high digital bit rate subscriber loop

(‘hdsl’) units. hdsl is a prime high-speed

alternative to cable modems for replacing

dial up access. hdsl is significantly faster

than the integrated services digital network

(‘isdn’).

Epiq99def 30-03-2000 15:32 Pagina 16

3.3 Research and Development

Epiq’s research and development activities

are concentrated on their two main business

units, the household and the automotive

appliances. Epiq has 35 r&d engineers.

Although the research and developments

activities are mainly prompted by customer

requirements, epiq wants to develop own

generic products for household. In order to

become a global leader in those two markets,

epiq is restructuring their research and

developing activities around these two axes :

• Near Nürnberg, a 800 m2 research and

development facility is being constructed

where the research and development

activities for the household market will

be concentrated. In close collaboration with

the researchers in Botevgrad, Bulgaria,

the r&d-team for the household segment

will consist of 20 engineers by June 2000.

• The research and development facilities for

the automotive market will be concentrated

within our plant in Besançon, France. In

order to be able to realize our expansion

plans in this business unit, the development

team has been increased to 9 engineers.

Not all of epiq’s research and development

activities are customer driven. Epiq develops

‘generic’ electronic modules without deve-

lopment contracts from a customer, such as

timers, auto-shut-off mechanisms, toaster

control modules and motor-control

modules.In the past epiq’s research and

development activities focused entirely on

household appliances. In view of epiq’s

strategy, the focus will now include the

automotive industry.

3.4 Total Quality Organization

The dynamics of the epiq Group is built on the

Total Quality approach.

The procedures and organization are certified

by well-known customers and international

norms.

The quality system is set up according to the

tqc (Total Quality Control) compliant to the

international iso norms.

epiq has been granted the iso 9002 and

valeo 1000 (automotive norm) qualifications.

This sets us to a quality level of 50ppm

(measured by our automotive customers).

Moreover, the Dieppe facility is qualified by

France Telecom for their polymerization and

refusion works.

To follow its penetration in the automotive

market, epiq has been asked to be certified

qs9000 by its key worldwide customers. Today,

the three main plants of the group working for

the automotive market are now certified

qs9000 (Dieppe, Botevgrad and Besançon)

qs for the Saltillo plant is targeted for end

of 2000.

Epiq99def 30-03-2000 15:32 Pagina 17

Epiq99def 30-03-2000 15:32 Pagina 18

6. Epiq’s StrategyReview of opportunities for acquisitions

The cem industry is a relatively fast moving

sector. Although no specific opportunities are

currently under consideration, epiq will keep

the market under close review to enable it to

take advantage of any acquisition

opportunities as and when they arise.

Epiq does not, however, currently envisage

diversifying outside the cem sector. As a part

of this strategy, epiq acquired Frankonia in

1999 and fmc in the beginning of 2000.

Additionally, epiq has started a joint-venture

with Fremach, in order to be able to deliver our

automotive and telecom customers complete

subsystems with electronic and plastic

components.

Co-evolution with select customer base

Epiq seeks to develop long-term strategic

relationships with a select group of oems and

to work closely with them in the design and

development of their products. The Company

believes that this approach enables epiq to

become an integral part of its customers’

manufacturing process and to expand into

new geographic and product markets in

parallel with its customers.

Concentration on high volume,

low cost production

Epiq focuses on providing precision

manufacturing of high-volume assemblies,

ideally on a turnkey or box-build basis, which

enables epiq to become an integral part of an

oem’s manufacturing process.The Company

believes that focusing on precision, high volume

production allows epiq to maximize value to the

customer while achieving optimum utilization of

its equipment and facilities.

Complementary medium quantity high value

production

Epiq seeks to complement its high volume, low

cost production with the production of smaller

series with higher value added to epiq. This en-

ables epiq to provide its customers with a full

range of electronics manufacturing services

The main objective of epiq

is to become a leading

international provider of

cem services by combining

epiq’s pan-European

operations to form an

integrated European cem

with a strong customer base.

To reach this goal, the key

elements of epiq’s

strategy are:

Focus on large oems in the automotive and

the household sectors

Epiq believes that the automotive sector offers

high growth opportunities and consequently

allows epiq to benefit from its experience

and engineering excellence in providing

cem services for these sectors. Epiq’s strong

position in the European household appliances

market provides a stable cash-flow to facilitate

international expansion of this segment.

Focus on cooperation with customers

Epiq will continue close collaborative relation-

ships with its customers, in particular in the

area of product development. By offering

innovative quality engineering solutions on

an individual basis, epiq hopes to build up

long-term relationships with large oems.

Expand production at lower cost plants

Epiq will continue to transfer production

technologies gathered at the ‘higher cost’

Western-European plants to ‘lower cost’ base

Eastern-European plants whenever this makes

commercial sense. As part of this strategy,

epiq has already developed smt and other

capabilities from France and Germany to

Bulgaria, the Czech Republic and Mexico.

Review of opportunities for overseas

expansion

Epiq will monitor its customers’ global needs to

enable it to set up plants where customers may

require epiq’s presence in the future. As a part of

this strategy, epiq constructed in 1999 a 3,000 m2

production facilities in Saltillo, Mexico. In 2000, a

new production facility is planned in China and

additional locations are researched for further

expansion.

Expand customer base

Epiq believes that the market for cem services

for companies that manufacture power tools

and electronics for buildings offers significant

growth opportunities. Consequently epiq will

target new customers in these sectors in the

future and seek new work from its few

existing customers in these sectors.

Epiq99def 30-03-2000 15:32 Pagina 19

Epiq99def 30-03-2000 15:32 Pagina 20

7. The Company’s Administration,

Management and Supervision7.1 Officers and Members of the Board of

Directors and Key Employees

In accordance with Belgian law, the Company’s

affairs are managed by its Board of Directors.

Pursuant to its Articles of Association,

executive authority for daily management and

implementation of the decisions of the Board

of Directors may be delegated to one or more

directors referred to as Managing Directors

(‘afgevaardigd bestuurders’). The officers,

directors and managing directors of the

Company are the following:

Epiq’s management has

demonstrated its capability

with the skill with which

the Company has acquired

businesses with a very

limited future and then

carefully restructured them

to create a business with

a strong position and good

growth prospects.

Management’s conviction

shows in the heavy

investments it made, based

on the vision about the

future of the automotive

contract manufacturing

industry.

Name Age Position

Roland Duchâtelet 53 Director and Chairman

of the Board (non-executive)

Norbert Hofer 56 Director and Chief Executive Officer

responsible for marketing

Gilles Bernard 42 Chief Executive Officer responsible for operations

Koen Batsleer 37 Chief Financial Officer

Gilles Robert 29 Head of Automotive Development

Peter Heindl 33 Head of Household Development

Françoise Chombar 37 Director (non-executive)

Peter Howard 42 Director (non-executive)

Herbert Coerper 64 Director (non-executive)

Epiq99def 30-03-2000 15:32 Pagina 21

Ms Françoise Chombar served as planning

manager at Elmos GmbH (Germany) from 1986

to 1989. Ms Chombar was elected as a director

of Melexis in 1996 where she holds the

position of Chief Operating Officer. She holds

a degree as interpreter in Dutch, English and

Spanish from the University of Ghent.

Mr Peter Howard is President and ceo of

MetricVision, a subsidiary of Thermo Electron

Corporation, which manufactures laser

radar-based 3d vision and metrology products.

Mr Howard also serves on the Board of

Directors of two other Thermo Electron

Corporation subsidiaries, Thermo Euro Tech nv

and Thermo Information Solutions, Inc. and

on the Board of jamCorp, a company in the

materials field. Mr Howard gained experience

of contract electronic manufacturing between

1987 and 1989 as ceo of Trim in Singapore and

SM2E sa in France between 1990 and 1995.

Previously Mr Howard worked for Mitsubishi

in Japan.

Mr Coerper has been a judge in Nürnberg

since 1976. He is at present a judge in the

Higher State Court (Oberlandesgericht) in

Nürnberg. From 1980 until 1990 he was a

member of the Culture, Social and Economic

board of the City of Nürnberg. Since 1986, he

has been a Board member of a company in

the electronics industry. Mr Coerper holds a

law degree from the University of Erlangen.

Mr Gilles Robert worked from 1994 to

1996 as development engineer for cfca, a

subsidiary of sylea. He joined epiq in 1996

as development engineer and was recently

appointed responsible for automotive

electronics development. He holds a degree in

electronic and mechanical engineering.

Mr Roland Duchâtelet has served as director

of the Company since 25th August, 1997. Prior

to that date, Mr Duchâtelet served in various

positions in production, finance, product

development and marketing functions for

several large and small companies. He

contributed to the start-up of three semi-

conductor manufacturers: Mietec Alcatel

(Belgium) from 1983 to 1985 as business

development/sales manager, Elmos GmbH

(Germany) from 1985 to 1989, as Chief Executive

Officer of Elex nv since 1990 and Melexis nv

since 1994 of which he is Chairman of the

Board and Managing Director. He holds a degree

in Civil Engineer Electronics, Applied Economics

and an mba from the University of Leuven.

Mr Norbert Hofer serves as joint Chief

Executive Officer responsible for marketing of

the Company from 1st August, 1998 onwards.

He served as a sales engineer at Stettner from

1967 to 1971. From 1971 to 1974 he worked as

an export manager at aeg Telefunken. In 1975

he founded Eker GmbH where he has worked

continuously until the present time. He has

been Managing Director of Eker GmbH since

1975. He holds a degree in economics from

the University of Nürnberg.

Mr Gilles Bernard worked from 1983 to 1988

as a development engineer, then technical

manager with Thomson specialising in passive

components from 1988 to 1993. He worked as

a quality control manager with SM2E sa from

1993 to 1995 and in September 1995 was

appointed plant manager of epiq sarl He has

been appointed Chief Executive Officer

responsible for operations with effect from

1st August, 1998.

Mr. Koen Batsleer worked from 1986 until

1991 for the Generale Bank. From 1992 on,

he is director of the financial consulting firm,

Finpower. In 1998, Koen Batsleer was

appointed Chief Financial Officer of epiq,

which function he will combine with his

consulting activities within Finpower. Koen

Batsleer is a commercial engineer, with

additional degrees in informatics and finance.

Epiq99def 30-03-2000 15:32 Pagina 22

Corporate Name: epiq nv

Registered Office: Transportstraat 1, 3980 Tessenderlo, Belgium

Date and Place of Incorporation: 6th February, 1989 at Gent

vat-Number: be 436.764.274

Registry of Commerce: Registry of Commerce of Hasselt,

under the number 72.464

Legislation under which

the Company operates: Laws of the Kingdom of Belgium.

Legal Form: Limited liability company

(‘naamloze vennootschap/société anonyme’)

Purpose: According to Article 3 of the Articles of Association,

the purpose of the Company is to:

- develop, produce and sell electronic products, parts,

components and software;

- import and export, to conduct trade and distribute trade in

electronic products, software, chemical products, agricultural products,

machinery and to construct factories for third parties;

- develop, produce and sell organic and chemical products;

- counsel other companies in technical, commercial, financial

and organisational matters;

- perform financial and trade transactions and services;

and all transactions which are directly or indirectly related hereto;

- perform translation work and to conduct and distribute trade

The Company may carry out all civil, commercial, industrial and

financial transactions as well as transactions involving real estate

and other property, which may directly or indirectly increase or

promote or have a connection with the purpose of the Company.

The Company may take an interest by means of contribution, merger,

subscription, financial or other intervention in all companies, existing

or to be incorporated in Belgium or abroad, of which the purpose

is equal or similar. This list is enumerative and not exhaustive

and has to be interpreted in the broadest sense.

Liability of the Shareholders: According to Belgian Law, the liability of the shareholders

of the Company is limited to the amount of their capital contributions.

Principal Offices of the Company: The Company’s offices are located in the Flemish Region of Belgium

at Transportstraat 1, 3980 Tessenderlo,

and its telephone number is + 32 (0) 13 67 07 60.

Financial Year of the Company: The financial year of the Company is the calendar year.

Term of Existence: The Company is incorporated for an unlimited term.

Epiq99def 30-03-2000 15:32 Pagina 39

Epiq’s management team

at your service

Gilles BernardChief Executive Officer

Norbert HoferChief Executive Officer

Roland DuchâteletPresident of the Board of directors

Herbert Coërpernon-executive director

Koen BatsleerChief Financial Officer

Bernd WestphalChief Purchasing Officer

Marie Claire TansInvestor Relations

Thierry Martinsales and marketing responsible

Nicolay Berovmanaging director epiq ea (Bulgaria)

Daniella Koutskamanaging director Eker Spol (Czech Republic)

Joannes Bermüllermanaging director Eker Mexico (Mexico)

Wilhelm Flesschnermanaging director Frankonia (Germany)

Sasha Kuglermanager Frankonia (Germany)

Ilse Hoferadministrative manager Eker (Germany)

Wilfred Wufuture responsible for epiq Asia

Reimund Grosshausermanaging director fmc (Germany)

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design Sign Box

+32 9 362 32 88

print Lithos

photography MediaMind

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