Annual ReportFiscal Year 2005

- when it has to be right

A Year of Success

Three-Year Overview

EBITDA(Continuing)

Net income(Continuing)

Sales by divisionSales(Continuing)

Sales in CHF million

Currency-adjusted sales growth in %

Sales growth in %

EBITDA in CHF million

EBITDA of sales in %

In CHF million

FY03 FY04 FY05 FY03 FY04 FY05 FY03 FY04 FY05

773

689

650

0

900

750

600

450

300

150

0 128

99

80

0

120

100

80

60

40

20

0

515

–14

60

50

40

30

20

10

0

10

20

16.6

12.3

14.3

12.26.0–2.0

7.915.5

–8.8

Surveying & Engineering 64%

GIS & Mapping 12%

Metrology 9%

Consumer Products 8%

High-Definition Surveying 4%Special Products 3%

Profit & lossUnless otherwise stated amounts for Continuing Operations in CHF million/Year ended March 31 2005 2004 2003Sales 773.2 689.1 650.3Year-on-Year Growth 12.2% 6.0% (8.8%)Currency-Adjusted Growth 15.5% 7.9% (2.0%)Gross-Profit 409.9 352.6 336.3Gross-Profit Margin 53.0% 51.2% 51.7%Total Operating Expenses (338.7) (324.8) (326.5)Earnings before Interest and Taxes (EBIT) 71.6 29.5 7.3EBIT Margin 9.3% 4.3% 1.1%Net Income/(Loss) – Continuing Operations 50.6 5.2 (13.7)Depreciation of Fixed Assets 18.8 18.0 21.1IAS 38 Amortization 37.6 34.4 31.1Goodwill Amortization1 – 16.9 21.9EBITDA 128.1 98.7 80.3EBITDA Margin 16.6% 14.3% 12.3%Adjusted EBITDA2 102.3 60.4 39.1Adjusted EBITDA Margin 13.2% 8.8% 6.0%Net Income from Discontinued Operations – 0.4 35.6Total Net Income 50.6 5.6 21.9Basic EPS (in CHF) 22.27 2.54 9.80Fully Diluted EPS (in CHF) 21.57 2.48 9.78

Balance sheet & cash flowNet Working Capital 127.9 121.1 112.1Net Working Capital/Sales 15.8% 16.4% 16.0%Total Assets 697.4 683.6 683.1Net Debt3 107.7 152.0 154.0Net Equity 369.2 319.0 313.6Debt/Equity 29% 48% 49%Cash Flow from Operating Activities 93.8 59.7 59.1Tangible Capital Expenditures (24.0) (16.0) (19.6)Intangible Capital Expenditures (28.8) (39.2) (40.9)Total Employees 2,398 2,461 2,388

1 Goodwill amortization was discontinued in fiscal year 20052 Calculated as EBITDA less the amount of internally generated and

capitalized development costs during the period

3 Net debt is calculated as total debt, net of cash and unamortized debt issue costs

1Contents

Contents

Annual Report

Summary 2Highlights Fiscal Year 2005 4Leica Geosystems Profile 5Letter to Shareholders 6Corporate Management 8

Summary 10The Road Ahead 12Leadership through Innovation 14Understanding Customers’ Needs 16Quality Assurance 19

Summary 20Statement of Responsibility 22Commitment to Sustainable Development 23Reducing our Environmental Footprint 26Social Commitment 27

Summary 28Divisional Overview 30Surveying & Engineering 32High-Definition Surveying (HDS) 34GIS & Mapping 36Consumer Products 38Metrology 40Special Products 42

Leica Geosystems Worldwide 43Company Contact Information 44

Definition of Key Terms 46

Words in italic are explained in glossary.

The corporate governance report and the financial results may be

found in the “Corporate Governance and Financial Report” attached

to this volume.

A Year of Success

The Way Forward

Corporate Responsibility

Operating Divisions

Locations

Glossary

New products

drive growth

The flood of new

products continued

again this year,

contributing to sales

growth of above

12%. Over 50% of

total turnover was

generated from prod-

ucts less than one

year on the market.

When it has

to be right

The company

launched its new

corporate identity

campaign during the

year, capturing the

essence of Leica

Geosystems’ promise

to all stakeholders –

Trust Leica Geo-

systems when it has

to be right!

Significant increase

in profitability

With a robust sales

growth, an improved

gross margin, and

restrained increases

in operating costs,

profitability in-

creased significantly

in fiscal year 2005.

A Year of Succ

2

First dividend to

shareholders to be

proposed

With record net

earnings, and a pos-

itive outlook for the

future, Leica Geo-

systems will propose

its first-ever dividend

payment to share-

holders at the An-

nual General Meeting

on July 6, 2005.

essLeica Geosystems provides

solutions for customers’

entire workflow

3

4Leica GeosystemsAnnual Report

Highlights Fiscal Year 2005

Momentum for ADS40

Hong Kong expands GPS network

Redemption of high-yield notes

Commencement of T-Probe shipments

Launch of Leica Sprinter

Kempen Socially Responsible Index

USDA standardizes on LPS

Frost & Sullivan Award

Launch of HDS educational program

Launch of SmartStation –GPS and TPS in oneinstrument

GPS reference stationsoftware

New facility in Singapore

April 2004: North West Geomatics Ltd in Canada adds a second ADS40

Airborne Digital Sensor to its range in response to a material surge in demand

for digital imagery from its clients.

May 2004: The Hong Kong Lands Department commissions Leica Geosystems

to set up six additional GPS reference stations and upgrade the existing GPS

network’s equipment and software.

June 2004: Leica Geosystems redeems the entire principal of its 65 million euro

high-yield notes issue and refinances the notes with a new four-year-term loan.

July 2004: Leica Geosystems begins shipments of the revolutionary new

armless and wireless T-Probe portable measurement system to key customers

in the automotive and aerospace sectors.

August 2004: Leica Geosystems rolls out the world’s first low-cost, easy-

to-use electronic level. The Leica Sprinter combines high efficiency and unique

functionality with unparalleled user-friendliness.

September 2004: Leica Geosystems is admitted to the Kempen/SNS Smaller

Europe SRI (socially responsible investment) Index.

October 2004: The United States Department of Agriculture (USDA) Natural

Resources Conservation Service (NRCS) selects the Leica Photogrammetry Suite

(LPS) to support and streamline the National Resources Inventory, thus estab-

lishing LPS as the premier software tool for photogrammetric applications.

November 2004: Frost & Sullivan chooses Leica Geosystems to receive its

Industrial Automation Product Innovation of the Year award for the new Local

Positioning Technology, including the hand-held ultralight T-Probe and T-Scan.

December 2004: Leica Geosystems HDS, LLC (High-Definition Surveying)

announces the launch of a new Education Product Program (EPP), a formalized

purchase program for educational institutions that teach or conduct research

into the field of High-Definition Surveying.

January 2005: Leica Geosystems launches SmartStation, the world’s first

all-in, high-performance total station with integrated GPS. Shipments began

in March 2005.

February 2005: Leica Geosystems introduces GPS Spider V2.0, an integrated

software suite for controlling and operating single reference stations or

networks from a central location.

March 2005: Leica Geosystems announces the official opening of its

Singapore-based global headquarters for leveling and alignment products.

5A Year of Success

Who We Are and What We Do

Leica Geosystems – when it has to be right People who build houses or bridges, make maps

and design aircraft need measurements they can

rely on. With almost 200 years’ experience in

pioneering solutions to measure the world, Leica

Geosystems is best known for a broad range of

products that capture and analyze spatial data

easily and accurately, generate models quickly,

and are capable of presenting spatial information

in 3-D. People who use our products every day

trust them for their dependability, the value they

deliver, and our superior customer support.

Taking cutting-edge solutions to the worldBased in Heerbrugg, Switzerland, Leica Geo-

systems is a genuinely global company, with

tens of thousands of customers supported

by more than 2,300 employees in 21 countries

and hundreds of partners located in more than

120 countries around the world. In the course

of its history, Leica Geosystems has grown from

modest origins into the world’s leader in sur-

veying innovation.

Pushing forward the barriers with total solutionsLeica Geosystems is a total-solution provider,

working to supply our customers with systems

that address their needs precisely,

all the way through from presale

advisory services to after-sales

support. Many of our solutions

feature cutting-edge approaches,

such as digital imaging and laser

scanning, but whatever the technology, they are

ultimately designed to enable our customers

to do their jobs faster and more efficiently than

before.

The leading position we hold in our industry is

based on a solid foundation of qualities which,

taken together, give us a unique position in the

world of geospatial systems. These are:

Service: We deliver outstanding service where

and when it matters. Our customers trust us

to keep their equipment up and running at all

times.

Innovation: We have a long history of firsts,

including the theodolite, the aerial camera

and the world’s first total station with inte-

grated GPS – the SmartStation.

Precision and accuracy: We lead the field

in facilitating the capture of precise spatial

information that can be measured repeatedly

and consistently to specification.

Broad solution range: We offer the widest

choice of solutions for high-precision data

capture, fast modeling, easy analysis, and full

3-D visualization and presentation of spatial

information.

Reputation: The Leica brand is synonymous

with high precision, excellent quality and re-

liability, as well as first-class customer service

and organization.

Quality: Leica Geosystems products are

renowned for their dependability in the field.

Product applicationsLeica Geosystems products and solutions are

widely used in:

Surveying, engineering and construction

Civil and structural engineering

Public and private infrastructure projects

Asset and facilities management

Aerospace, automotive and general industries

Mining and exploration

Agriculture and forestry

Mapping

Urban planning and cadastral applications

Disaster management

Our solutions in actionSome of the more impressive examples of our

solutions in action include:

The use of Leica Geosystems’ equipment and

software solutions in the planning and con-

struction of the world’s highest bridge in the

south of France.

Quality control during the construction of

NASA’s space station, the Airbus A380 and

Renault’s F1 racing car, provided by Leica

Geosystems’ laser trackers and photogram-

metry.

The use of Leica Geosystems’ GPS technology,

photogrammetry, total stations and machine

guidance systems to ensure completion of

Hong Kong’s Chek Lap Kok Airport in record

time.

We give our cus-

tomers the tools

they need to do the

job quickly, precisely

and reliably.

6Leica GeosystemsAnnual Report

Letter toShareholders

When it has to be right. This simple phrase is

packed with relevance for our company. At the

heart of the statement is trust; trust in Leica

Geosystems by our customers, employees, busi-

ness and community partners, and investors.

When it has to be right also means commitment.

Commitment to providing our customers with

the right products, services and solutions, so

they can succeed in critical missions, meet tight

schedules and enhance productivity. In this year’s

Annual Report, we will highlight key elements

of this commitment, ranging from product inno-

vation through to our customer care program.

A record yearThe financial success of this year, a record

achievement in many respects, was made possi-

ble by the careful groundwork laid several years

before. With significant investments in research

and development, we now offer one of the most

comprehensive baskets of products and solutions

in our industry. In our current portfolio, customers

have the choice of solutions that span the geo-

spatial imaging chain – from sensors that capture

data in varying degrees of density, through

to software solutions and service offerings that

enable customers to work with up to terabytes

of spatial data.

During the year, we again launched many new

products onto the market, including the Smart-

Station in March 2005. The SmartStation is a

milestone in the surveying industry, and is an

extension of our successful System 1200 family,

which was a material contributor to our business

growth this year. Other products include the

new Local Positioning Technology products from

Metrology, an expanded offering of construction-

oriented products, GPS reference station soft-

ware, and new machine automation solutions,

particularly in the mining sector.

Expanding our customer baseWe continued to gain the trust of many new

customers during the year. This is evidenced by

local-currency growth in several of our businesses

at multiples of historical market growth rates.

In Surveying & Engineering, growth in our high-

end TPS and GPS businesses was particularly

strong, further supported by solid demand for

our low-cost leveling and alignment products.

Our move of the leveling and alignment business

unit to a new facility in Singapore should enable

us to make deeper inroads in Asia, a key growth

region for Leica Geosystems.

Geographically, we continue to hold a leading

market position in Europe, where we recorded

sales growth of 10% this year. We see further

opportunities in Europe, particularly in the

emerging markets of the east, which will com-

plement our solid presence in Western Europe.

Our strongest growth regions this year, however,

were the Americas and Asia Pacific, where we

realized top-line growth rates approaching 30%

in local currency. Growth in these regions was

bolstered by a combination of a strong product

offering and intense marketing initiatives. Apart

from this, new organizational structures added

the local management expertise needed in these

markets. We expect to see continued strong

growth in both regions in the upcoming year.

Our expanding presence in China, led by a dedi-

cated member of management reporting to the

CEO, underscores our commitment to this region.

Outstanding sustainability ratingsResponsible corporate citizenship is part of an

ensemble of values held by Leica Geosystems.

In last year’s Annual Report, we presented our

first comprehensive Corporate Responsibility re-

port. We plan to prepare such a report once every

two years, with an update in alternate years.

In this year’s Annual Report, an update year, we

present several interesting examples of how so-

lutions from Leica Geosystems contribute to our

global sustainability efforts. We also summarize

achievements and opportunities in this area.

We are pleased to report that many international

rating organizations with a focus on sustainable

business practices awarded Leica Geosystems

ratings above our industry average this year, and

numerous sustainable investment funds have

now included our shares in their investment port-

folios.

7A Year of Success

Heerbrugg, June 9, 2005

Mr. Mario Fontana Mr. Hans HessChairman of the President and

Board of Directors Chief Executive Officer

Strong results lead to first dividendSuccess in our markets this year led to a record

financial result. Sales in Swiss francs were CHF

773.2 million, a growth of 12.2% in Swiss francs,

and 15.5% in local currencies. Growth in the

top line as well as the gross margin gave us the

means to make additional investments in re-

search and development and product-marketing

programs, and still increase our earnings by a

multiple of the growth in sales. Our EBITDA

margin increased to 16.6% of sales, and our ad-

justed EBITDA (which removes capitalized R&D

expenditures) rose to 13.2%. The positive ben-

efits of no goodwill amortization, falling debt

levels, lower interest rates, and a beneficial tax

structure supported the growth in operational

earnings, giving rise to net income of CHF 50.6

million, the highest level in our company’s

history.

With this performance, and our growth expec-

tations for the future, we will propose to pay the

first dividend to shareholders since the initial

public offering in 2000 of CHF 4 per share. This

proposal will be put forward to shareholders

at the Annual General Meeting on July 6, 2005.

Solid outlook for 2006Looking ahead to fiscal year 2006, we expect to

have another solid year of sales growth. Earn-

ings should also continue to grow above the rate

of sales.

In closing, we would like to thank all of our stake-

holders for your continued interest in Leica

Geosystems. We look forward to another exciting

year and know that when it has to be right, you

will place your trust in Leica Geosystems.

8Leica GeosystemsAnnual Report

Our Mission and Values

Mission

When it has to be right, customers can

trust Leica Geosystems to provide innova-

tive solutions and services for the capture,

modeling and visualization of 3-D spatial

information.

Values

Our company is guided by the six funda-

mental values that comprise our Code of

Conduct.

Customer orientation

Commitment to quality

Open and constructive communication

Integrity and trust

Innovation

Entrepreneurial spirit

These values are intrinsic to our daily

activities and reflected in the way we:

Serve our customers

Produce and deliver our products

Communicate internally and externally

Remain responsive and competitive

through innovation

Strive to maintain our entrepreneurial

spirit as we grow, and lastly

Conduct ourselves as suppliers, employ-

ees, and corporate citizens

Leica Geosystems can justly claim to be a global

company. Apart from the international scale

of our operations, the Corporate Management

Team is made up of individuals of diverse national

origins, which guarantees a cosmopolitan,

interdisciplinary approach to our business. The

Corporate Management Team, comprising four

corporate officers and five divisional presidents,

hails from Europe, Asia and the Americas — not

coincidentally the most strategically important

regions for the company’s operations.

Technical degrees are the most common aca-

demic background in the team. Three members

of the team hold advanced engineering degrees,

as well as one doctorate in Astronomy. The

remaining members hold degrees in Human Re-

ExperiencedLeadership

Corporate Management

From left to right:

Eric Poll, Corporate VP Strategic Marketing,

Walter Mittelholzer, President Metrology

division, Aad van Vliet, Chief Human Resources

Officer, Klaus Brammertz, President Consumer

Products division, Christian Leu, Chief Finan-

cial Officer, Erwin Frei, President HDS division

(resigned as of May 10, 2005), Hans Hess,President and Chief Executive Officer,

Robert Morris, President GIS & Mapping divi-

sion, Clement Woon, President Surveying &

Engineering division

9A Year of Success

sources, Finance and Business Administration,

Social Science and Forestry. Four individuals on

the team have MBAs.

The industrial experience of the team comple-

ments their varied educational backgrounds.

Several members of the team have spent a sig-

nificant amount of their professional careers

in our industry. Complimenting those with direct

industry experience, other team members con-

tribute their experience in the consumer products,

pharmaceutical, chemical and computer indus-

tries. During their respective careers, members

of Corporate Management have worked in a

broad array of disciplines, gaining experience in

product development, product management,

in-field surveying and mapping, corporate fi-

nance, business development, marketing and

sales, and human resources.

The Corporate Management Team, whose mem-

bers have been with the company for an average

of 10 years, has jointly seen Leica Geosystems

through the challenges and accomplishments

of the recent past. The team, together with the

Board of Directors, has been responsible for

achieving a successful turnaround in our opera-

tions over the past few years.

Corporate Management is assisted in its work

by the 120 members of Senior Management, who

are located in 21 countries around the world.

10

TheWay ForwaLeveling and Align-

ment unit gets new

home in Singapore

Leica Geosystems

opened a new

facility in Singapore

where it will head-

quarter its Leveling

and Alignment

business unit, part

of the Surveying &

Engineering division.

Innovation has a

tradition at Leica

Geosystems

Leica Geosystems

is synonymous with

Swiss precision,

quality and reliability,

but it also stands

for considerable

innovative power.

The SmartStation is

a perfect example.

Spatial information

goes digital

Today, Leica Geo-

systems enables

spatial information

to be captured,

stored and accessed

in digital form, thus

catching the interest

of many exciting

new partners.

11

rdStreamlining

our customers’

workflow

Leica Geosystems

offers scaleable, cus-

tomizable solutions

that enable custom-

ers to automate

processes through-

out the Geospatial

Imaging Chain and

thereby improve

overall efficiency.

Customer care

initiative is king

Leica Geosystems’

customer care ini-

tiative gets off the

ground this year,

leveraging the com-

pany’s reputation

for outstanding

customer service to

further increase

customer loyalty in

the future.

Leica Geosystems’ solutions

transform reality into geo-

metrically accurate drawings

12Leica GeosystemsAnnual Report

The Road Ahead

The spatial information industry is attractive and

dynamic. It provides individuals, enterprises and

governments with information about objects; it

tells us where and what they are, how they look

and when they change. Spatial information is

no longer the exclusive domain of professionals,

such as surveyors, engineers and city planners.

Many of us use it everyday in our car navigation

systems or for location-based services. The

increasing use of spatial information in an ex-

panding array of applications is what makes our

business so exciting. And Leica Geosystems is

equipped to play a major role.

The changing face of our marketSo, what are the trends that will fundamentally

change our industry? One of them is increasing

digitization. The confinement of spatial infor-

mation to maps and plans is history.

Today, this information is required

in digital form, so that it can be

stored in databases, processed and

shared over the Internet. This, in

turn, makes it available for many

new applications, and is one of

the reasons why new players such

as Google, Microsoft, Oracle and other large IT

companies have entered the industry. Leica Geo-

systems is working with many of these com-

panies and, again, is well positioned to explore

the potential of this new digital world.

Another salient feature of today’s industry is

the burgeoning need for spatial information that

is accurate and up to date. For today’s consumer,

the idea of using an obsolete map in a navigation

system is unthinkable. Leica Geosystems’ GPS

technologies can pinpoint any position on the

surface of the earth to an accuracy of a centi-

meter, while the company’s laser technologies

can determine the height of a building with milli-

meter accuracy in seconds.

However, perhaps the most exciting development

in our industry is the trend toward the fourth

dimension. Consumers increasingly expect 3-D

spatial information, preferring it to complicated

2-D maps and plans. Apart from an object’s

location and appearance, many users now need

to understand how it changes over time: in other

words, the fourth dimension. Private and pub-

lic enterprises have a real interest in knowing

whether the structure of a tunnel or a dam has

changed and if it is still safe. Or understanding

the development of cities and villages and their

impact on the environment. Leica Geosystems

offers the solutions needed for these tasks.

Our strategy for shareholder valueLeica Geosystems creates value for its share-

holders through profitable internal and external

growth. However, apart from continuing to offer

the widest range of technologies in the industry

for capturing spatial reality, Leica Geosystems

is now increasingly supplying state-of-the-art

software to process and model this information-

rich data. Leica Geosystems already supplies

solutions for applications such as building infra-

structure (roads, railroads, tunnels, bridges and

houses) as well as other key segments in land

surveying, architecture, mapping, and mining. As

we expand in these areas, the role of software

will be increasingly important.

Strategic partnerships, too, will be essential if

we are to offer attractive solutions for entire

workflows of targeted segments. In the future,

we will continue to focus on promising market

segments and dynamic geographic regions that

offer profitable, above-average growth. At the

same time, we will continue to offer a wide variety

of distinctive, customer-oriented services on a

global basis.

Leica Geosystems is in an excellent position to

capitalize on the emerging trends in our industry.

The opportunities are compelling, but require

focus to be effective. Our strategy is a measured

one, which leverages the strength of our existing

portfolio of sensors and software solutions,

as well as strategic partnerships and selected

acquisitions, to develop and expand into new

vertical market segments and service offerings.

The increasing use

of digital informa-

tion has transformed

the face of the

industry and eman-

cipated more and

more users.

13The Way Forward

After 34 years in the city state, Leica Geosys-

tems AG finally established a company-owned

operation in Singapore. Its name:

Leica Geosystems Technologies Pte

Ltd. Prior to this, Leica Geosystems

and Leica Microsystems (based

in Wetzlar, Germany) held a 50/50

interest in a business that Leica

Geosystems has now sold off. Leica

Geosystems Technologies is part of the Survey-

ing & Engineering division, which in turn belongs

to Leica Geosystems AG.

Key activitiesDuring the second half of calendar 2004, the

Surveying & Engineering division was subdivided

into four business units, and the Leveling and

Alignment unit set up in Singapore. Leveling

and Alignment is responsible for the running of

Leica Geosystems Technologies in Singapore

and maintains a research and development unit

in Grand Rapids, Michigan, USA. The new com-

Leica GeosystemsTechnologies Pte Ltd:A Company-Owned Base in Singapore

pany’s range of operations will have a wide-

reaching scope. These include its functions as:

The main competence center for research and

development into digital and optical leveling

and laser products

The global headquarters for product engineer-

ing and design

A global base for driving worldwide sales

together with the marketing of digital and

optical leveling and laser products

The main assembly plant for leveling and

alignment products, such as optical levels,

digital levels, rotating lasers and pipe lasers

An assembly plant for other surveying and

engineering products, including Terrestrial

Positioning Systems (TPS) and accessories

A main sourcing center for the Surveying &

Engineering division’s activities in Asia

A logistics center for the management of

worldwide distribution and the customization

of products manufactured in Singapore

Plant and productsThe new facility covers a total area of 50,000

sq. ft. and is located at Singapore’s Woodlands

East Industrial Estate, headquarters for the

Asia Pacific operations of many multinationals.

The cost of setting up the plant ran to some

SGD 6 million, with an additional SGD 6 million

planned for research and development each

year. This business unit currently employs some

150 people worldwide, with over 100 of them

based in Singapore. There are plans to ramp up

the Singapore workforce to 140 over the next

two years.

Since going onstream, Leica Geosystems Tech-

nologies in Singapore has developed, engineered

and manufactured a number of exciting and

innovative products for the global market, one

of the more notable being the Leica Sprinter,

holder of numerous patents and the world’s first

affordable and easy-to-use electronic level. The

Singapore operation is backed up by the Re-

search and Development Unit in Grand Rapids,

Michigan, USA. This unit recently developed the

Leica Rugby 300 SG Grade Laser and the Rugby

400 DG Dual Grade Laser, both of which are

used primarily in the construction industry and

manufactured at the new facility in Singapore.

Leica Geosystems Technologies Pte Ltd, Singapore,

officially opened its doors on March 31, 2005

From its Singapore

base, Leica Geo-

systems Technolo-

gies is ideally placed

to serve the Asia

Pacific region.

14Leica GeosystemsAnnual Report

Leadershipthrough Innovation

The technologies and the competence to get it rightLeica Geosystems has a clearly defined mission:

to be the world’s leading provider of innovative

solutions for capturing, modeling, analyzing and

visualizing spatial data. Strategic acquisitions

and continuous product development have created

a comprehensive technology and product port-

folio that gives our company a unique position

in our industry.

Over the years, the company has developed

a number of technologies and software appli-

cations that are now core to our products and

solutions. These include, among

others, EDM (Electronic Distance

Measurement), high-precision angle

measurement, GPS technology,

3-D laser scanning and point-cloud

analysis. Far-reaching software

expertise, coupled with extensive

research and development, are es-

sential if the company is to continue generating

innovative, market-leading products.

Leica Geosystems’ innovation efforts aim at one

single goal: to understand and support customer

workflow. This has resulted in a product portfolio,

a service offering and a comprehensive range of

solution packages that are unique to the market.

An industry pioneer: where innovation has a tradition Leica Geosystems is synonymous with Swiss

precision, quality and reliability; but it also stands

for considerable innovative power.

Our corporate culture is defined by innovation

and a constant focus on increasing customers’

productivity. Contributing towards this are some

of the world’s most highly qualified specialists

and multidisciplinary engineers. A core team of

experts at our Corporate Technology Center in

Heerbrugg fosters and supervises cross-divisional

developments. We also conduct focused research

and development activities in other locations,

the United States, Singapore and Australia. Our

multidisciplinary and multinational R&D team

includes mathematicians, physicists, and geo-

scientists. The company also cultivates a long-

standing relationship with the Swiss Federal

Institute of Technology as well as many other

research centers around the world.

Leica Geosystems holds more than 1,000 pat-

ents and has a full product pipeline. The number

of innovations is at an all-time high, demonstrat-

ed by the fact that 50% of our current year’s

revenue was generated by products less than a

year old.

Leica Geosystems has consistently been at the

forefront of technological development in our

industry. Our development efforts are focused on

improving productivity: whether it is enhancing

the speed, quality and precision of instruments

to increase surveying effectiveness, leveraging

new technologies to capture and analyze larger

amounts of spatial information, or devising ways

of handling large quantities of spatial data effec-

tively. In the 1980s, the use of lasers made its

way into the industry. In the 1990s it was GPS.

More recently, laser scanning appeared on the

scene. The latest developments include the move

to the fourth dimension and the digitization of

geographic information.

The digital revolutionToday’s laser scanners capture and present

accurate, as-built information that can be pro-

cessed instantaneously on a PC. Projects are

completed faster, output is more precise. De-

ferring calculations to a later date is simple and

unproblematic. Three-dimensional

computer models are created in

virtual reality, featuring all the com-

plexities of “the real thing.” They

are comprehensively tested in

simulations, before anyone even

reaches for a tool. Computer modeling creates

a virtual world that permits developers to move

at will within the model and subject it to com-

prehensive testing and simulation.

Creating simulations that show how well a

building will blend into its environment, how an

aircraft will perform in flight, how a new city

overpass will affect the flow of traffic or how

At Leica Geosystems,

we have a history

of pushing forward

the boundaries of

science and technol-

ogy for geographical

applications.

Digitization has ex-

pedited and simpli-

fied the development

process like nothing

else before it.

15The Way Forward

Realizing a Dream – the SmartStation

fauna and flora will develop over time: such

tasks, to name just a few examples, are now

easier to perform than ever before.

Point-cloud generation, aerial photographs,

simulations and similar applications in the digital

realm represent terabytes of data. Leica Geo-

systems is changing to meet its customers’ needs

as more and more clients demand all-inclusive

hardware, software and services solutions.

Today, some 80% of our company’s turnover

comes from equipment sales. However, it is

estimated that in the next few years, software

and related services will account for up to 35%

of sales. The company is moving in that direc-

tion even now with products like Cyclone, the

point-cloud process and data management soft-

ware, the Leica Photogrammetry Suite for geo-

spatial imaging and SpiderNET, the GPS network

controller. The software required to process

large amounts of data is created in cooperation

with data storage and database specialists,

such as Oracle.

Brisbane Machine Automation Business

Leica Geosystems’ investments in the Asia Pacific

region included a move to new premises at

Dutton Park, Brisbane, Australia, in March 2005.

Following the acquisition of Tritronics and the

expansion of activities for machine automation

and site-monitoring systems for mining and

construction, existing facilities were no longer

adequate. The move has also provided an op-

portunity for Australia-based sales and support

personnel who work for other divisions or oper-

ating units of Leica Geosystems to be colocated.

The new premises provide a stimulating environ-

ment for R&D projects in mine and construction

machine automation systems, as well as a de-

monstration and training center for a wider range

of Leica Geosystems products.

Making the SmartStation concept

a reality was a long-time dream for Dr. Craig Hill,

who began a doctorate in 1993 focusing on the

integration of GPS and TPS technologies in a single

instrument. Dr. Hill believes the new development,

which is simple to use and provides an affordable

entry point to RTK GPS technology, will materially

improve surveyors’ efficiency.

SmartStation represents a significant opportunity

to encourage the use of RTK GPS by professionals

who until now have avoided the technology. Fur-

thermore, SmartStation ensures that the System

1200 family holds an unequalled market position

because TPS1200 is the only total station incorpo-

rating GPS technology. This unique feature, coupled

with TPS1200’s many other leading attributes,

should continue to be a compelling reason for ex-

isting, as well as new, customers to choose Leica

Geosystems’ surveying instruments.

For Dr. Hill, who was honored to play a key role in

the development of SmartStation, completion of the

project meant that a long-held vision had finally

become a reality.

Dr. Craig Hill, Director of

Survey Applications,

Business Unit Surveying

reference the image to obtain accurate coordi-

nates, measure it to extract specific data, analyze

the data to discover relationships between image

features, and present the data in a format that

will enable good decision making. In the industry,

we call this workflow the Geospatial-Imaging

Chain.

Empowering customers for greater independenceThere used to be a significant gap between sur-

veying and mapping, but in recent years, this has

become noticeably smaller. Leica Geosystems

is working to create products that fuse technol-

ogies from different disciplines within the geo-

spatial industry and achieve data interoperability.

Such products empower customers to execute

processes themselves which they have tradition-

ally outsourced and enable different systems

to share information. The emergence of products

that service all the links within the Geospatial-

Imaging Chain is significantly bridging the gap

between disciplines and, at the same time, sim-

plifying workflows.

While the use of geospatial information has

grown organically in enterprise environments,

there is always a risk of hindrances to pro-

ductivity, as organizations find themselves in a

juggling act, trying to figure out how

to share data. Data interoperability

is a necessity in all project workflows

that employ more than one hard-

ware or software solution. If we are

to streamline production, we need

to integrate workflows and achieve data inter-

operability between systems. Only by doing this

can we push production to its highest attain-

able level while maintaining the necessary high

standards of accuracy.

Boosting efficiency and decision makingTo streamline the geospatial-imaging workflow,

organizations can take advantage of Leica Geo-

systems’ scaleable, customizable imaging and

software solutions. These tools automate the

Geospatial-Imaging Chain from beginning to end,

with the result that projects can be completed

more efficiently and cost-effectively, and with

higher precision. The ensuing improvement

in workflow furnishes decision makers with the

information they need to reach decisions more

quickly and accurately, and makes a significant

contribution to overall project success.

UnderstandingCustomers’Needs

Although different organizations make use of

geospatial information in many different ways,

as determined by their own specific needs, their

ultimate objective is always the same: to have

the data required to make better-

informed decisions. In order to fa-

cilitate the decision-making process,

some users need maps or topo-

graphical models, while for others

the ideal solution is a fly-through,

3-D scene. And although the crea-

tion of these products and services is driven

by a wide variety of needs, the genesis of each

and every one is the same: geospatial imaging.

A clear relationship exists between the many

individual activities that constitute a project,

from data capture, spatial referencing, measuring

and analysis through to presentation. Ideally,

each step will flow smoothly into the next. Each

component in the process should likewise blend

seamlessly with the others in pursuit of the pro-

ject’s objectives: to capture the required image,

16Leica GeosystemsAnnual Report

Wendy Watson, Vice President

of Product Management & Mar-

keting, GIS & Mapping division

By bringing different

disciplines closer

together, we are

giving customers

more freedom.

Geospatial imaging

describes our

customers’ work-

flow and defines

our approach to the

industry.

17The Way Forward

The Customer Care Program

Dave Koster, Vice President of Customer

Support and Service, Metrology division

in new ideas. And there’s been a general in-

crease in awareness within the company of the

importance of customer care.

How do Leica Geosystems customers notice the difference?Next to customer care products that really fit

our customers’ needs, and the faster service we

provide, the general attitude towards service

has received more attention in various parts of

our company. The way we answer the phone

or how we offer assistance makes all the differ-

ence. Whenever we overachieve our customers’

expectations, their loyalty will increase. That’s

a basic mindset, and we’re working on making

this even better.

What else do you have in the pipeline?The next step is to standardize the look and feel

of our customer care, so whether the customer

owns a DISTO™, a GPS instrument or an HDS

scanner, the service contracts, support calls and

invoices are always the same. We’re also look-

ing at further improvement of our customer ser-

vices, making them as convenient as possible.

By giving our customers the after-sales care they

deserve, we believe we can really make a differ-

ence!

Leica Geosystems recently launched a Customer

Care Initiative. In the interview below, Dave

Koster, Vice President of Customer Support and

Service of the Metrology division, explains what

the project is all about and provides a rundown

of progress so far.

What is the aim of the Customer CareInitiative?Dave Koster: Mainly to increase customer loyalty

by boosting after-sales satisfaction. If we can

help our customers get the most out of the in-

struments they buy from us over the product’s

entire life cycle, they will be more loyal. That in

turn helps us to grow and stand out in today’s

markets. We see it as a major opportunity.

Who is involved in the program?It’s a corporate project involving service and

support managers from various divisions as well

as a controller and a human resources con-

sultant. But the drive to get things done comes

from the divisions. Ultimately, everyone will

play a part.

What are the key elements of the customer care program?We are targeting our efforts on six key areas:

Defining a clear after-sales strategy valid

across the entire company.

Strengthening service and support manage-

ment in the various divisions.

Creating a clearly defined, comprehensive

service and support portfolio.

Benefiting from information and knowledge

management internally and with key or con-

tract customers.

Further expanding the possibilities of remote

access services.

Finally, developing ideas to enhance cus-

tomers’ productivity using our applications

expertise.

Can you tell us how the project has been progressing?We make much better use of synergies between

regions and divisions, and have employed a

number of customer care professionals to bring

18Leica GeosystemsAnnual Report

Customer Needs andSatisfaction Survey 2004

The customers and noncustomer groups that

participated in the survey included civil structural-

engineering surveyors, cadastral surveyors, land

surveyors, aerospace and automotive manufac-

turers, industrial measurement, GIS and spatial-

mapping specialists, mining and exploration,

education institutions and universities, research

organizations and architects, builders and real-

estate professionals.

As in the 2002 survey, Leica Geosystems’ per-

formance in the last two years generally remains

ahead of the average for the competition. We

recorded a very high KPI score which measured

our performance against 15 attributes relating

to customer needs. Leica Geosystems generally

performs well on the attributes regarded as most

important in driving customers’ overall satisfac-

tion. We maintain a competitive position on the

four most important attributes – reliable products,

high-quality technical support, responsiveness

to requests and prompt provision of repairs/

replacements. We will continue to do every-

thing in our power to meet the needs of our

customers.

Our customers are generally very satisfied with

our performance. On average, Leica Geosystems

recorded a high score for overall satisfaction.

Similarly, our customers are also very loyal to us,

demonstrating generally very high levels of in-

tention to repurchase from us in the future and

a strong willingness to recommend us to profes-

sional colleagues. Our brand name continues to

be very well respected and a core asset to the

company with a very strong brand quality rating.

The results of the survey will help us to build on

our success, to differentiate ourselves from our

competitors and to address those areas where

we need to improve. They will be incorporated

into the development of strategic business,

product, marketing and communication plans.

1 Survey fieldwork was conducted by two independent market researchcompanies on behalf of Leica Geosystems. Fieldwork was conductedbetween October 2004 and January 2005. Twenty-three survey inter-views were conducted face-to-face, and 911 by phone. An additional95 surveys with Leica Geosystems employees were self-completedvia email. Leica Geosystems customers were informed that Leica Geo-systems was the survey sponsor before giving their answers. Non-customers were informed at the end of the survey. Data provided byrespondents requesting anonymity remained completely confidential.The total sample was provided by Leica Geosystems and the surveydata were analyzed for Leica Geosystems’ proprietary use.

2 Approximately 70% of those interviewed used Leica Geosystemsproducts.

3 Approximately 30% of all interviews were conducted with those whodo not use any products from Leica Geosystems.

Since 1995, Leica Geosystems has been con-

ducting customer-based research to help us to

understand and appreciate customer needs and

perceptions and to evaluate our performance.

The research also involves noncustomers and

employees. The survey provides

insight into the key issues our

customers and noncustomers face

when selecting a supplier in our

industry. It also assists us in under-

standing what their perceptions are

of Leica Geosystems as a supplier, their levels

of satisfaction and what is important to them.

In addition, the survey provides a basis in which

we can measure our own performance against

that of our competitors.

In January 2005, we completed the latest survey1,

which researched customers’2, noncustomers’3

and employees’ perceptions on satisfaction,

brand quality and supplier performance. In total,

1,029 interviews were completed across five

countries in Europe, Asia and America and five

key divisions of Leica Geosystems.

The results will help

us build on our suc-

cess and differen-

tiate ourselves from

our competitors.

Performance on three key measures

Leica Geosystems All competition average

9

8

7

6

5

4

3

2

1

0

Likelihoodto repurchase

Likelihoodto recommend

Overallsatisfaction

8.0

7.5

8.1

7.3

8.1

7.2

19The Way Forward

“Leica Geosystems is committed to focusing the

organizational structure, its processes, daily

activities and ideas towards achieving customer

satisfaction and meeting customer expectations.”

This statement, taken from our corporate qual-

ity policy, is no empty phrase. In the past fiscal

year, we streamlined many of our

operational processes and lever-

aged various synergies. In addition,

several of our organizations outside

Switzerland were ISO-9001:2000-

certified under SQS (the Swiss As-

sociation for Quality and Management Systems),

or are well on the way towards receiving certifi-

cation.

Progress made with the improvement of product

quality and reliability was likewise very satisfac-

tory. New products and prototypes are regularly

reviewed, even at the early stages of develop-

ment, which has enabled us to reduce time to

market and achieve a high first-pass yield in the

series manufacture. This means individuals in

R&D or process engineering do not waste their

talents on troubleshooting and can use them

more productively developing innovative new

products.

Suppliers and partners can also have a major

influence on the quality and reliability of our

products. We have a clear-cut evaluation process

and a selection of criteria to help us choose part-

ners who fully meet our requirements for high

quality and reliable products. Internal process

audits and external audits at suppliers’ premises

carried out the previous year provided a clear

indication of the improvements and corrective

action required.

One other key factor in successful quality

management is ongoing employee training. Apart

from ensuring that everyone understands our

quality objectives and benefits from lessons

learned, we use train-the-trainer methods and

integrate new employees as quickly as possible.

All these efforts have helped us in our quest to

boost business excellence at all levels.

Philip Benz is one of the first

links in the Leica Geosystems

quality assurance chain

A Firm Commitment to Quality Assurance

We spare no effort

in our quest to

guarantee quality

at every stage

of the value chain.

20

Changing the

focus of our

responsibilities

Our commitment to

corporate responsi-

bility remains firm,

and has broadened

to include even

greater responsibility

for our employees’

well-being, social

activities and involve-

ment in matters

of public interest.

Making a real

difference

Our products help

to make life safer,

have an important

cultural role to play,

and make a signifi-

cant contribution

towards preserving

the treasures of

nature.

Commitment to the

highest standards of

corporate citizenship

We are untiring in

our commitment to

the highest stan-

dards of responsible

corporate behavior

in how we deal with

our customers, our

partners, our staff

and our investors.

Corporate Res

21

Geospatial solutions from

Leica Geosystems facilitate

responsible urban planning

on any scaleponsibility

22Leica GeosystemsAnnual Report

Statement of Responsibility

will be part of a more general supplier policy

and supported by newly defined environmental,

social and health/safety-related targets.

Apart from making our values and principles

central to everything we do, we believe it is im-

portant for us to communicate our successes

and results to the outside world. We achieve this

by publishing a separate and more detailed re-

port on corporate responsibility every two years.

The next one will appear in 2006.

Sustainability ratingsEncouragingly, our efforts have received well-

above-average marks in sustainability assess-

ments. The Zurich Kantonalbank, for instance,

awarded us an A (on a scale of C to AAA), while

Inrate rated us 11% above the average for our

sector in its ecological rating and 26% above

the average for our sector on social issues. Many

socially responsible funds — including the

Kempen SNS Smaller Europe SRI Index, the first

sustainability index for smaller European com-

panies – now invest in our stock.

Leica Geosystems is acutely aware of its respon-

sibilities towards the environment, society and

future generations. We have a long tradition of

environment-friendly, socially and economically

responsible corporate behavior, and are con-

scious that sustainability is the linchpin of all our

actions. The focus of our efforts shifts continu-

ally in response to environmental, technological,

social and economic change. The

needs and expectations of our

stakeholders likewise reflect these

developments and spur us in our

efforts to find the most responsible ways of

achieving success. Globalization has also expand-

ed our sphere of influence, and today we are

in a position to influence social developments in

emerging markets through our employees and

suppliers abroad.

Over the years, our commitment to sustainable

development has undergone a significant shift.

As in the past, we remain firmly committed

to environmental and economic optimization of

our premises and production processes, but

our concerns have expanded to include greater

responsibility towards our employees, our social

activities and our involvement in matters of

public interest. One example is our appointment

of integration managers to help new employees

settle into their new professional and private

environments. Finally, it is vital that our cus-

tomers, our employees, our suppliers and our

shareholders see the value of buying our in-

struments, of working with us and of investing

in our company.

Top management recently defined future strat-

egy in a review that foresees the introduction

of a more general social policy, incorporating

compliance with human rights, to complement

our existing human resources strategy and code

of conduct. Although the group already observes

these principles, we feel there is a need for

a formal statement to monitor adherence. This

We have a firm

commitment to

all stakeholders.

23Corporate Responsibility

Mitigating the Effects of Natural Disasters

Communities living under the threat of natural

disasters such as earthquakes or hurricanes, to-

gether with the agencies set up to monitor them,

make widespread use of Leica Geosystems equip-

ment. The Emergency Operations Center (EOC)

in Berkeley, California, for example, is now better

prepared to mitigate the effects of a disaster

and obtain federal matching funds more quickly

because it makes use of HAZUS, a GIS-based

hazard loss estimation program produced by the

Federal Emergency Management Agency FEMA.

Until 2002, the city used orthophotographical

scanning, which was slow and inefficient. This

has since been replaced by Leica Geosystems’

ERDAS IMAGINE®, which has helped create a cen-

tralized raster data repository that gives users

fast, simple access to seamless imagery via

customized ArcIMS map services. The city’s EOC

uses HAZUS shaking models to estimate the im-

pact of an earthquake in terms of likely injuries

and deaths, building collapse, need for shelters

and resulting financial damage.

In 2004, hurricanes hit the southeastern United

States particularly hard, Florida bearing the brunt

of their force with no fewer than four hurricanes

in the space of six weeks. In the wake of the

damage inflicted by the strongest

of them, Charley, Charlotte County

commissioned EarthData to acquire

aerial imagery of the region to sup-

port relief efforts. EarthData used

the Leica ADS40 Airborne Digital Sensor at a

height of 7,800 feet for the job. County staff and

EarthData personnel customized the project,

resolved issues associated with setting control

points in and around mangrove swamps, and

completed the digital orthogeneration training.

EarthData delivered orthotiles encompassing

township-and-range sections, with the county

Commitment toSustainableDevelopment

Cities like Berkeley situated on earthquake fault

lines are now better equipped to protect them-

selves against the devastation caused by natural

disasters

providing section corners in digital format. Offi-

cials used this imagery to help them determine

the scale of damage and allocate recovery re-

sources more accurately. GIS and mapping efforts

following natural disasters, such as hurricanes,

greatly support the people and organizations

providing relief, helping to rebuild homes and

lives.

Leica Geosystems

contributes to di-

saster relief efforts

in many ways.

24Leica GeosystemsAnnual Report

Almost one and a half thousand years after its con-

struction in the center of ancient Constantinople,

the great church of Saint Sophia has finally di-

vulged the secret of its ingenious design. Volker

Hoffmann, professor at the Institute of Art His-

tory at the University of Bern, deciphered the

mystery using state-of-the-art HDS™ laser tech-

nology from Leica Geosystems. Some of his

initial laser evaluations were shown for the first

time in July 2004 at the Congress of the Inter-

national Society for Photogrammetry and Remote

Sensing (ISPRS) in Istanbul. In mid-October, the

Leica HDS3000 was used to analyze the build-

ing’s floors. At an early stage of the research

project the handheld Leica DISTO™ laser meter

also played an important role.

Because of its vast dome, which appears to float

weightlessly above the main space below, the

church was widely regarded as the eighth won-

der of the world. The original construction plans

have never been found, and for hundreds of years

experts have tried to fathom out how scientists

and artists working in the sixth century managed

to construct a freely suspended dome almost 56

meters high and 31 meters wide, supported only

by four pillars. Considering the technical facilities

available at the time, many experts consider the

building to be one of the boldest feats of con-

struction ever achieved by human hand.

Now Volker Hoffmann and his assistant, with the

help of the 3-D laser measurement techniques

made possible by Leica Geosystems equip-

ment, have cracked the once insoluble problem

of determining the church’s dimen-

sions with absolute precision and

discovered that its design is based

entirely on an “analemma.” This is

a projection technique described by

Ptolemaeus, which makes it possi-

ble to interconnect the earth and the canopy of

heaven in accordance with the view of the

world at this time: the sphere representing the

sky, god and the church, and the cube repre-

senting the earth with its four directions, above

and below. As Volker Hoffmann explains, “For

the first time ever, the Leica DISTO™ laser mea-

suring instrument enabled us to determine the

precise distances of the four supporting pillars

to within a millimeter at the simple touch of a

button. This was highly important at the start of

our work and helped us calculate the dimensions

of the double circle/double square.” His findings

revealed the brilliance of the design principle be-

hind this magnificent monument to Saint Sophia

and man’s ingenuity, and explain the structure’s

astonishing stability. These will now be pre-

sented at exhibitions in Berlin, Bern, the United

States and France.

Unraveling the Mystery of the“Eighth Wonder of the World”

For almost 1,500 years, Hagia Sophia in Istanbul,

built between 532 and 537 AD, confounded experts

attempting to discover the secret of its design;

now, the conundrum has been solved

Leica Geosystems

equipment helps to

add to the stock of

human knowledge

and understanding.

25Corporate Responsibility

Wolf Survey and Mapping in Canada is a major

supplier of seismic front-end services to energy

exploration and production companies in Canada

and uses GPS systems to support seismic ex-

ploration and surveying applications. Seismic

surveys are used to detect and map different

geological layers below the surface of the earth

and provide invaluable information about under-

ground substructures. Leica Geosystems asked

Operations Supervisor Mark Strickland to explain

some of the complexities of the business and

environmental benefits of using GPS in his work.

Leica Geosystems: What is the use of seismic surveys?Mark Strickland: For geophysicists, seismic

surveys are an indispensable means of prospect-

ing for new oil and gas deposits and enable us

to estimate the size, shape and depth of reser-

voirs as well as their porosity and fluid content.

What do seismic surveys involve and howhave they been conducted in the past?Traditionally, seismic surveying has meant clear-

ing vegetation in the target zone, which in some

cases covers thousands of square kilometers.

The development of alternative survey technol-

ogies – Leica Geosystems GPS for instance –

has enabled us to use less-invasive procedures.

How have these surveys affected the environment?Conventional seismic programs have inevitably

affected environmentally sensitive areas and led

to the destruction of vegetation, habitat, ground

disturbance and the disruption of many natural

phenomena.

How has the use of Leica Geosystems GPS equipment reduced the environmentalimpact of seismic surveying?The obvious benefits of using GPS for seismic

surveys include minimal environmental impact

with reduced timber damage, and a safer, single-

pass operation with fewer exposure hours to

danger. It eliminates the need for a precut sight-

line, and thus the felling of trees, and drasti-

cally reduces the work involved. It is an industrial

revolution in every sense of the term!

Mark Strickland: “Our reasons for choos-

ing the Leica GPS 1230 were its durability,

performance under adverse field condi-

tions, improved user interface and out-

standing battery performance.”

Minimizing the EnvironmentalImpact of Seismic Surveying

The benefits of using GPS for seismic surveys

include minimal environmental impact, safer,

single-pass survey operations, and flexible crew

movements, saving time and money

26Leica GeosystemsAnnual Report

Our environmental footprint is

very small and we aim to keep

it that way

Reducing ourEnvironmentalFootprint

An all-round boost in efficiencyIn the past, we have concentrated on optimizing

production processes, but last year the focus

was on improving our infrastructure and innova-

tion processes. At company headquarters in

Heerbrugg, we demolished a number of old build-

ings to create attractive green recreation areas

for our employees. New unpaved spaces and

parking lots allow vegetation to grow and rain-

water to drain off naturally. Our new facilities in

Singapore feature a new air-cooled air-condition-

ing system that cuts energy consumption by

30% because it can be switched on and off, as

required, in nine different zones. Special sheeting

on the windows reflects 70% of the sun’s heat.

The new system has also reduced water con-

sumption and contamination, and indoor noise

levels.

Sustainable product designTwo students working with “seed sustainability,”

a Swiss Federal Institute of Technology project

based in Zurich, have written theses on the

integration of sustainable product

design into our business processes.

In response to their work, the Leica

Innovation Process (LIP) will be

adapted to encourage sustainable

design and feature performance indicators to

monitor and control improvements, such as re-

cycling quotas.

New environmental goalsManagement has also set several new environ-

mental goals for the next five years. Since we

have largely outsourced basic production process-

es and require few resources for the assembly

of our products, the goals we have set ourselves

are more quality oriented. They include:

A 5% reduction in energy use (electricity and

fossil fuels), relative to sales

Use of environmentally friendly/multipurpose

packaging materials

A reduction of end-of-life waste created by

our products in accordance with national and

international regulations

Environmentally friendly mobility (e.g. using

modern communication technologies, pro-

moting teleworking)

The obligation is

clear: to leave a

world fit for our de-

scendants to live in.

27Corporate Responsibility

SocialCommitment

Corporate social responsibilityLeica Geosystems aspires to be a company in

which employees, customers, investors and part-

ners have complete confidence. Corporate social

responsibility is a means of boosting our image

as a fair and attractive employer because it

increases staff loyalty and attracts well-qualified

professionals. We regularly conduct employee

satisfaction surveys to find potential for improve-

ment. Our last major survey in 2003 was fol-

lowed by a minisurvey in September 2004, which

showed an increase of 15% in satisfaction for

all five areas in question. External rating agen-

cies have also given us very positive evaluations

and provided input as to how we could further

improve.

Work-life balanceIn November 2004, “Familienplattform,” an as-

sociation involving three important Swiss institu-

tions, awarded Leica Geosystems the title of

family-friendly company of the month. We spon-

sor a child-care center, employ a social adviser

for our employees, offer part-time work and an-

nual flextime models and the possibility for tele-

working. More and more employees are making

use of the possibilities of unpaid leave and

sabbaticals. We have also introduced workshops

for managers to analyze their work-life balance

and forestall burnout.

Integration/diversity/equalityAs a global company, we employ people from

many different nationalities. We recently set up

a workshop to explore ways of helping new em-

ployees, particularly those moving

to foreign countries, acclimatize

to their new surroundings. We now

employ integration managers,

whose job is to assist employees to

settle in their new professional and

private environments. Leica Geosystems Technol-

ogies Pte Ltd in Singapore provides overseas

workers with subsidized accommodation for the

first two years of their stay.

We have also introduced round-table meetings

as a forum for the informal exchange of informa-

tion between management and employees. Our

Chief Human Resources Officer is also respon-

sible for ensuring that men and women receive

equal pay for the same work.

Social data and goalsWe now maintain a human resources informa-

tion system, where we collect social data to

monitor achievement of our social, health and

safety goals. On a social level, we are looking to

increase the percentage of part-time and female

employees in top and middle management. We

wish to increase diversity by recruiting people

from various ethnic backgrounds. Our aim is to

employ a large number of apprentices and train-

ees to reduce youth unemployment. Another

goal is to build up a partnership with a charitable

organization for a social development project in

which we can assist with our expertise and prod-

ucts. Next to our introduced and more specific

Code of Conduct, we are introducing a social pol-

icy that defines our adherence to human rights

in a more general way.

We go to great

lengths to improve

our employees’

quality of life and

job satisfaction.

Full-time employees by regionSwitzerland 41%

Europe 23%

America 23%

Asia 13%

28

Laser scanning

comes of age

3-D laser-scanning

solutions from High-

Definition Surveying

broke out of the

early adopter phase

of their life cycle,

resulting in 149%

sales growth in

fiscal year 2005.

Key customer

wins in 2005

Governmental agen-

cies in countries

around the globe

increasingly turned

to GIS & Mapping

geospatial solutions

in fiscal year 2005.

Operating DiviStrong growth

in key regions

Robust demand

for Surveying & En-

gineering products

led to significant

local currency sales

growth in the US

and Asia in fiscal

year 2005.

29

Breakthrough surveying

solutions from

Leica Geosystems

Changes in distri-

bution structure

The sharply focused

distribution structure

in Consumer Prod-

ucts led to expand-

ed market coverage

and optimized

distribution costs.

sionsPenetration of

automotive sector

The new T-Products

from Metrology

were enthusiastically

adopted by major

players in the auto-

motive industry dur-

ing fiscal year 2005.

Interest in

Singapore JV sold

Divestments in the

Special Products

division continued

with the sale of

Leica Instruments

(Singapore) Pte Ltd

to Leica Micro-

systems in Decem-

ber 2004.

Surveying & Engineering

Surveying & Engineering pro-

vides a wide choice of products

and services that include TPS

total stations, GPS Surveying

Systems, levels, construction-

site lasers, and machine guid-

ance systems, through to

comprehensive, integrated

solutions for infrastructure and

deformation monitoring.

Markets/customersSurveying professionals

Civil engineers

General contractors

Construction companies

Mining and exploration

enterprises

Products/solutionsTheodolites, total stations

GPS surveying instruments

Levels, lasers, hand-held GIS

Machine automation solutions

30Leica GeosystemsAnnual Report

DivisionalOverview

Hardware and software

to reference spatial infor-

mation within a project,

such as a building plan, GIS

database, topographical

map or a CAD/CAM system.

Hardware to capture spa-

tial data, from individual

points at a survey site

or engineering project,

through to mass data from

airborne sensors or 3-D

laser scanners.

Local Roots, Global Reach

Through its five primary divisions, Leica Geo-

systems delivers advanced product technology

and services throughout the whole geospatial-

imaging chain. Based in Switzerland, with

a workforce of more than 2,300 people in 21

countries and hundreds of partners in over

120 nations, the company supports tens of

thousands of customers worldwide.

capture reference

High-DefinitionSurveying

High-Definition Surveying so-

lutions are designed for appli-

cations that enhance precision

and efficiency in all types of

applications, such as plant and

facility management, construc-

tion path planning, topographic

surveys, documentation of

facilities for regulatory compli-

ance, historic preservation, and

much more.

Markets/customersArchitecture, engineering

and construction

Land surveyors

Products/solutionsFamily of 3-D laser scanners

3-D pointcloud visualization

software

CAD integration software

GIS & Mapping

GIS & Mapping helps put pre-

cise imaging to work by power-

ing the entire geospatial imag-

ing workflow. A broad array of

airborne sensors, photogram-

metric mapping and remote

sensing software solutions cap-

ture data efficiently, reference

imagery accurately, measure

and analyze easily and present

spatial information in 3-D.

Markets/customersPublic/private mapping agencies

Federal, state and local

governmental organizations

Security/defense organizations

Commercial GIS users

Products/solutionsAirborne sensors, including

digital cameras and LIDAR

Photogrammetric software

Geospatial-imaging solutions

31Operating Divisions

Special Products

The Special Products division

was created to hold operations

that Leica Geosystems is

planning to divest. Currently

the division contains the com-

ponent-manufacturing facility,

Polymeca, in Heerbrugg, as

well as the GPS Marine Navi-

gation business based in

Torrance, California.

Hardware and software

tools to work with spatial

information, e.g. photo-

grammetric analysis of

imagery or engineering

projects.

Software to analyze

critical information within

a project, including feature

extraction in aerial imagery

or deviation from design.

Software solutions to

present captured spatial

information, often in 3-D,

such as 3-D city models,

as-built models of struc-

tures, site surveys and

preservation projects.

measure analyze present

Consumer Products

Consumer Products facilitates

fast, accurate measurement

with the Leica DISTO™, the orig-

inal handheld, laser-based

distance measurement product.

Available in a wide choice of

models, it is used by more than

half a million professionals

worldwide, saves time and en-

hances productivity.

Markets/customersBuilders, carpenters

Architects, interior designers

Engineers

Products/solutionsDISTO™ Lite

DISTO™ Classic

DISTO™ Plus

Metrology

Metrology supplies a wide

choice of control and industrial

measurement products that

includes laser trackers, local

positioning systems, scanning

systems, 3-D software, and

high-precision total stations

that capture data accurately,

model quickly, analyze easily,

and visualize and present 3-D

spatial information.

Markets/customersAll major players in the global

aerospace and automobile

industries

Products/solutionsLaser tracker

T-Scan and T-Probe

Metrology software solutions

Industrial theodolites

32Leica GeosystemsAnnual Report

them. These marketing activities raised our pro-

file, consolidated our presence in the industry

and brought about a major improvement in brand

recognition. The success of the System 1200

has already established itself as the industry’s

system of choice.

Going from strength to strengthIn the course of the past fiscal year, we made

satisfactory progress with efforts to strengthen

our foundations for growth. We consolidated

our machine automation and monitoring oper-

ations in the construction and mining sectors.

Our rail and underground systems established a

foothold in the industrial sector, with several rail

authorities purchasing the systems. In addition,

we won several high-prestige GPS reference net-

works around the world, some of which featured

as case studies on our website. Our GIS data

collection products and handheld GPS systems

also won several key tenders. In summary, the

division is strengthening its position in peripheral

survey market segments.

In addition to System 1200, launched just before

the start of fiscal year 2005, the financial year

saw the rollout of several other products.

MC200 and GRP5000These products made inroads into the ex-

cavation market and brought scanning tech-

nology to tunnel-mapping applications,

respectively.

MobileMatrixA software solution that enables graphical

field surveying and improves the workflow

from field to office.

SR20The release of this device means we now have

a competitive product in the L1 GPS survey

segment.

SprinterThe world’s first low-price digital level brings

greater efficiency and precision to optical-

leveling users, reducing field errors and im-

proving field productivity with its measuring

speed and ability to measure in low-light

conditions. The upshot is more measurements

and cost reductions for customers.

Rugby 300/400Unveiled at CONEXPO 2005 in Las Vegas,

these new laser rotators have extended our

product portfolio to cover single- and dual-

grade solutions.

The Surveying & Engineering division had an-

other outstanding year, posting vigorous growth

in all four of its sales regions. The division

considerably strengthened its product portfolio

following the completion of several key develop-

ment projects, while the overwhelming response

from customers to the new System 1200 provided

some indication of the momentum with which

the division entered the new fiscal year. Total

revenues for the year stood at CHF 492.4 million,

representing an over 16% increase over the

previous period. This growth is broadly based,

as the Americas and Asia both reported close

to 30%, while Japan and Europe reported solid

double-digit growth. Growth in America and

Asia was achieved despite the problems posed

by the weak US Dollar and a competitive envi-

ronment. The division’s strategy to boost pro-

ductivity in many areas led to an EBITDA margin

of 19.7% in fiscal year 2005 compared with

18.5% the previous year.

On the road to reach our customersIf fiscal year 2005 was a satisfying year in terms

of sales and revenues, it was also encouraging

from a quality angle. The Surveying & Engineer-

ing division took significant orders from several

well-known institutions and global customers,

including a number of high-profile competitive

account conversions. This was assisted by our

road show events, which attracted more than

10,000 customers in Europe alone. Two survey

trucks went on the road in North America, visiting

no fewer than 104 cities in 41 states and prov-

inces, and logging some 41,000 miles between

Surveying &Engineering

Sprinter

33Operating Divisions

Leica Geosystems Hits the Road

During the months leading up to the launch of

System 1200, a North American team brainstormed

to devise a marketing campaign with a difference.

The result was “The Leica Road Show.”

On May 1, 2004, two Ford F-150 SuperCrew Cab

pickup trucks left Atlanta to visit customers all over

North America. Events were coordinated with our

distribution partners in 104 cities, located in 41

states and provinces, and the distance covered was

41,000 miles. As an incentive to customers, one of

the trucks was the grand prize in a sweepstakes.

Although each event was different, they all high-

lighted the technical innovations and benefits of

System 1200. At an annual surveyors’ golf outing

in Canada, for example, there was a prize for the

person with the longest drive. The TPS1200 total

station with the new R300 Reflectorless EDM was

used to measure the distance traveled by each ball.

While the Road Show was a successful way of intro-

ducing new products to Leica Geosystems’ tradi-

tional customers, it also reached many non-Leica

Geosystems customers. Indeed, 36% of attendees

owned no Leica Geosystems equipment.

The culmination of the Road Show came in early

December when Hans Hess, CEO of Leica Geo-

systems, was in Atlanta to present the custom Ford

F150 to the winner Pete Tuftee, surrounded by a

host of Leica Geosystems Surveying & Engineering

employees.

Mr. Pete Tuftee receives keys to the

custom Ford F150 from Hans Hess, CEO

Spider 2.0This GPS reference network software offers

many advanced features, including area-based

correction for RTK processing. It is also the

first software package to meet the new RTCM

3.0 standard for GPS correction data distri-

bution.

SmartStationThe world’s first total station with GPS pro-

cessing capability will revolutionize traditional

surveying processes, giving customers un-

precedented productivity.

In the fourth quarter of fiscal year 2005, we

opened a new SGD 6 million facility in Singapore,

Leica Geosystems Technologies, which combines

the activities carved out from the Leica Instru-

ments (S) joint venture and laser production

activities in Grand Rapids, Michigan, USA. This

move has substantially reduced our operating

costs and improved our ability to offer competi-

tive lasers and level products in the future.

The products and organizational initiatives in

this fiscal year have laid the foundations for

another exciting year ahead. Barring unfavorable

shifts in global economic trends or unforeseen

catastrophes that negatively affect global busi-

ness sentiment, we are confident of achieving

our growth targets in the financial year ahead.

Sales in CHF million

Currency-adjusted sales growth in %

Sales growth in %

EBITDA in CHF million

EBITDA of sales in %

FY03 FY04 FY05

492

423

398

6.5

7.4 16.3

19.0

FY03 FY04 FY05

97

78

70

19.7

18.517.5

Sales EBITDA

0

500

400

300

200

100

0

0

100

80

60

40

20

0

34Leica GeosystemsAnnual Report

Increasing interest in HDS products and technologiesHDS technologies are becoming increasingly

interesting for the profession and the industry.

The number of HDS-related conferences, the

coverage of HDS topics in major journals and

the activities of universities and standardization

institutions based on HDS technologies are all

clear indications of an increased and accelerated

adoption of HDS technology at various different

levels. With its ability to support new workflows

in specifically targeted industries (civil engineer-

ing, infrastructure and plant construction), the

division significantly increased the number of

tasks and projects that can be addressed by HDS

products and solutions. The attractiveness of

HDS products and solutions for existing and

potential customers from a profitability point of

view has increased substantially and HDS now

has the potential to evolve rapidly into a stan-

dard instrument found in the toolboxes of most

measuring professionals.

HDS more than ever the system of choiceDuring fiscal year 2005, global sales increased

significantly over the previous year and the

volume of incoming orders grew steadily. The

division maintained its efforts to boost sales and

improve its global support network, and con-

tinued to leverage the excellent coverage and

strengths of the Leica Geosystems global sales

and marketing organizations. Thanks to efforts

made to reduce costs in fiscal year 2004, in-

creased revenues and a clear improvement in the

gross margin, HDS broke even at the EBITDA level.

Worldwide partnerships consolidate leading positionPart of the HDS division’s strategy is to build

relationships with suitable partners all over the

world. In calendar year 2004, the division pub-

lished details of a new venture with AVEVA Group

plc, a leading UK-based supplier of engineering

IT systems for the process, energy and marine

industries. HDS was also pleased to announce

that its laser-scanning pointcloud data integration

capabilities will be supported in future releases

of SmartPlant Review®, a 3-D visualization soft-

ware suite developed by Intergraph Corporation’s

Process, Power & Marine division. The HDS di-

vision also continued to work with other leading

suppliers in their respective fields, such as Zoller+

Fröhlich, Germany, and Bentley Systems, USA,

promoting the adoption of HDS products and

In many respects, fiscal year 2005 was a very

successful year for the High-Definition Surveying

division (HDS). With close to a 150% increase

in revenues over the previous year, a dramatic

improvement in EBITDA and the solid develop-

ment of new products, services and increased

customer benefits, HDS met, or even exceeded,

its ambitious expectations at the start of the

fiscal year.

Following the successful production ramp-up

of the HDS3000, the division succeeded in com-

pletely reducing its backlog from the previous

year and meeting increased demand from the

market for HDS products and solutions. Further

investment in Cyclone software and joint efforts

with our partners, Zoller+Fröhlich, Germany, to

facilitate seamless integration of the HDS4500

into the HDS product portfolio led to another im-

pressive release of HDS products and solutions.

The accompanying rollout of CloudWorx 3.0 en-

abled engineers and surveying professionals to

benefit from the richness and completeness of

high-volume pointclouds in third-party software

packages such as Autodesk’s

AutoCAD and Bentley’s

MicroStation. The release

of Cyclone 5.2 and

CloudWorx 3.1 at the

end of the fiscal year

demonstrated HDS’s

ongoing commit-

ment to improving

the functionality

of its software

and generating

increased bene-

fits, together

with an improved

return on invest-

ment, for customers

who choose HDS

products and solutions.

High-DefinitionSurveying (HDS)

HDS3000

35Operating Divisions

solutions and leveraging our complementary

strengths in ways that are mutually beneficial to

all parties concerned.

HDS predicts continued strong growth in fiscal

year 2006 as it intensifies efforts to enhance its

product and service range and steps up support

of specific applications and workflows in its

target markets and industries. The current trend

in the CAD/GIS industries towards 3-D solutions

will clearly facilitate the adoption of High-Defi-

nition Surveying. This, together with intensified

efforts on the part of the HDS division to opti-

mize its software, the marketing of new, industry-

specific software products and the tools and

basic technologies needed to make pointclouds

available for a multitude of third-party software

packages, should drive the accelerated adoption

of High-Definition Surveying even further.Pointcloud Management

Leica Geosystems: Jonathan Kung, what are pointclouds?Jonathan Kung: High-Definition Surveying uses

laser scanners to capture dense, 3-D geometric data

sets representing sites and structures. These data

sets are called pointclouds and are organized in a

grid-type database structure. This presents unique

challenges during the processing of scanned data

into maps and drawings or other deliverables.

How has Leica Geosystems responded to the challenge?Our HDS systems and highly versatile, HDS-opti-

mized software combine high performance with

virtually unlimited capacity and exceptional quality

in a single package.

Tell us something about recent developments.First, to shorten the learning curve and increase

customer productivity, we made Cyclone™ software

compatible with the new Leica HDS4500 phase-

based scanner. This means pointclouds from both

systems can be unified and managed in a single

model in Cyclone for visualization and data extraction

purposes. Second, we expanded our Autodesk and

Bentley CAD integration software (CloudWorx™)

to include new solutions for popular plant design

software from Intergraph and AVEVA, both leaders

in their respective fields. Finally, we made major

advances in our software architecture to reduce the

amount of office time needed to process scanned

data. Today, our software solutions are better than

ever before.

Jonathan Kung, Lead Software Engineer,

High-Definition Surveying division

Sales in CHF million

Currency-adjusted sales growth in %

Sales growth in %

EBITDA in CHF million

EBITDA of sales in %

FY03 FY04 FY05

32

1314

0

100

80

60

40

20

0

FY03 FY04 FY05

0.1

–10

–9

0

25

20

15

10

5

0

Sales EBITDA159.3

–5.6

–2.1

148.9

0.4

–68.6

–76.2

36Leica GeosystemsAnnual Report

mine the viability of large-scale, digital aerial

photographs to sample FIA plots. The project

used a Leica RC30 Aerial Camera System, ERDAS

IMAGINE® and the Leica Photogrammetry Suite

(LPS). The results show that a combination of

traditional ground crews and aerial photography

will benefit the Forest Service by increasing cost-

efficiency, while preserving accuracy and fulfilling

its annual inventory requirements.

Ordnance Survey of Ireland (OSI) is a key Leica

Geosystems customer, producing urban, rural

and tourist and leisure mapping products. This

year it not only purchased an ALS50 Airborne

Laser Scanner and upgraded its existing Digital-

Scanning Workstation (DSW) scanners to

DSW700s, but OSI also acquired a terrestrial-

scanning system from Leica Geosystems HDS

and GPS hardware from Leica Geosystems Sur-

veying & Engineering.

Pusat Remote-Sensing Negara (MACRES), the

government remote-sensing agency of Malaysia,

has selected Leica Geosystems software to sup-

port Malaysian state environmental initiatives.

Its IEDA Project utilizes LPS in support of its

ground receiving station, and in processing data

from satellite sources.

The National Remote Sensing Agency (NRSA) of

India is responsible for acquisition, processing,

distribution and archiving of data from remote-

sensing sources, and it is also engaged in execut-

ing various remote-sensing application projects.

NRSA employed its new ALS50 to map areas

affected by the South Asian tsunami within days

of the disaster on 26 December 2004.

Leica Geosystems GIS & Mapping is working to

assist government agencies and disaster relief

organizations responding to the South Asian

tsunami. Aerial imaging and mapping are impor-

tant during the response and recovery stage of

a disaster, for positioning facilities and services,

determining a triage method to repair infra-

structure, and in determining loss in order to

begin work on recovery.

Product highlights We continue to empower our customers with

complete solutions for photogrammetry, remote

sensing and image exploitation. Several product

releases and enhancements were made avail-

able this year, particularly:

GIS & Mapping

Leica Geosystems’ GIS & Mapping division is

powering geospatial imaging through every step

of the Geospatial-Imaging Chain, driving effi-

ciency and cost-effectiveness for our customers.

During fiscal year 2005, the division made sev-

eral benchmark sales and notable product re-

leases. Each of these demonstrates the diverse

applications of geospatial imaging in organiza-

tions worldwide.

Strategic customersAdoption of Leica Geosystems solutions for

image capture and exploitation has continued

at a steady pace. Among our key customers for

the year are the United States Forest Service,

the Ordnance Survey of Ireland, Pusat Remote

Sensing Negara (MACRES) and the National Re-

mote Sensing Agency (NRSA) of India.

The U.S. Forest Service is standardizing its equip-

ment with Leica Geosystems imaging-processing

and photogrammetry software. A site license

agreement allows the Forest Service to employ

the full complement of Leica Geosystems soft-

ware products in nearly every forest management

application, including forest planning, inventory,

resource mapping, fire monitoring and manage-

ment, and forest restoration.

The Forest Service is an exemplary customer,

leveraging every link of the Geospatial-Imaging

Chain. Every year, it mea-

sures 10 to 20% of all

the land in the U.S. and

updates forest popula-

tion estimates using its

Forest Inventory and

Analysis Program (FIA).

Seeking more effi-

cient, cost-effective

methods for accurately

executing the annual forest

inventory, it set out to deter-

Airborne Digital Sensor ADS40

37Operating Divisions

The Leica ADS40 Airborne Digital Sensor

now delivers 5-centimeter spatial resolution

imagery. This marks a significant improve-

ment from its previously published accuracy

level of 10–15 centimeter spatial resolution.

With this capability, the ADS40 strengthens

its standing as the leading large-format

digital sensor.

This year also marked the availability of

significant updates to ERDAS IMAGINE® and

Leica Photogrammetry Suite. These perfor-

mance enhancements were designed in re-

sponse to customer feedback, and empower

both ERDAS IMAGINE® and LPS to meet

the most stringent user requirements for

geospatial imaging.

The DSW700 Digital-Scanning Workstation,

a high-performance photogrammetric

film scanner, produces output that is uniquely

accurate while maximizing performance,

increasing reliability and reducing costs. The

latest version of the popular DSW scanner

series features a 30% improvement on scan-

ning speeds, as well as improved quality and

lower cost of operation.

Leica Geosystems powers 3-D imaging

Leica Geosystems empowers organizations to trans-

form raw imagery into three-dimensional (3-D)

scenes by providing hardware for data capture and

seamlessly integrated software for image exploita-

tion. Using a combination of terrestrial scanning,

airborne LIDAR, airborne and satellite imagery, data-

rich photographs, and generic tile textures, users

are able to quickly and easily generate accurate 3-D

renderings and fly-through simulations for use in

decision-making processes.

Until recently, it was difficult and costly to create

high-quality, interactive 3-D views. Three-dimen-

sional scenes are created by extracting geospatial

information from imagery and draping it over ele-

vation data. These scenes may be populated with

trees, vehicles, buildings and weather effects to

build simulations. We deliver intuitive, integrated,

realistic and affordable 3-D geospatial visualization

and modeling tools to facilitate decision making.

Real-time streaming and improved distribution via

the Web gives decision makers ready access to 3-D

scenes for such varied applications as homeland

security and defense, real-estate development and

urban planning, and emergency response and

management.

Mladen Stojic, Product Manager,

GIS & Mapping division

Sales in CHF million

Currency-adjusted sales growth in %

Sales growth in %

EBITDA in CHF million

EBITDA of sales in %

FY03 FY04 FY05

94

95

101

0

100

80

60

40

20

0

–5.8

Sales EBITDA

FY03 FY04 FY05

11108

0

25

20

15

10

5

0

1.1

–0.7

5.5

11.410.88.2

Despite increasing pressure from the competi-

tion, Leica DISTO™ continued to grow at a healthy

rate during the past fiscal year. Unit sales growth

was in excess of 15% while the value of sales

was up by 7.9% in local currency. Gross profit,

too, rose in response to the division’s new strat-

egy of placing more emphasis on higher-end

products, such as the Classic5a and Plus, and the

further optimization of the “pay-as-you-go”

principle. Worldwide, architects, engineers and

the property-related industries benefited from

being able to integrate the DISTO™ Plus into

their workflow. Private-label business, another

important component in the division’s strategy,

likewise continued to thrive and rose as a pro-

portion of sales.

Focused distribution structureThanks largely to a sharply focused distribution

structure, we were able to meet two of our

major targets for the past fiscal year: to expand

market coverage; and to optimize distribution

costs. Achievement of both these objectives en-

abled us to post a strong financial performance

for the year.

Through our private-label

partners, who distribute

Leica DISTO™ under their

own well-known brand

names, we have ready ac-

cess to hundreds of thou-

sands of professionals and

specialists worldwide.

Although they represent

only a relatively small pro-

portion of total sales, our

private-label partners’

brands and product baskets

give us a unique competi-

tive advantage. At the same

ConsumerProducts

38Leica GeosystemsAnnual Report

time, the extensive reach of our Leica Geo-

systems dealer network allows us to address en-

gineers, surveyors and architects in every corner

of the globe. Finally, several new, segment-spe-

cific distribution partners couple their expertise

with the unrivalled efficiency of Leica DISTO™

to create unique solutions to measurement chal-

lenges anywhere on earth.

In keeping with our strategic goals, we have

substantially increased revenues from our key

accounts and are implementing strategies to

guarantee that this continues in the years ahead.

Our new global distribution partners will be

creating new opportunities in segments where

customers quickly understand the value propo-

sition represented by the Leica DISTO™ solution.

On course for sustained growthIn the course of the year, we rolled out a global

campaign that will steadily increase the number

of points of sale around the world. This has

already helped generate double-digit growth in

the Americas and Asia, as well as a steady rise

in western European markets, which have con-

siderably less room for expansion. Our aim is to

continue improving distribution with a view to

reaching end users through all the channels at

our disposal.

Leica DISTO™ is now seen on job sites all over the

world. The Leica DISTO™ name is synonymous

with cutting-edge laser measurement technology

and continues to be the first choice of profes-

sionals in a vast range of trades and disciplines.

Now that we have succeeded in improving the

distribution, we look to the future with confi-

dence.

Leica DISTO™ Plus

Sales in CHF million

Currency-adjusted sales growth in %

Sales growth in %

EBITDA in CHF million

EBITDA of sales in %

FY03 FY04 FY05

62

59

51

0

100

80

60

40

20

0

14.8

15.9

7.9

FY03 FY04 FY05

1596

0

25

20

15

10

5

0

11.814.4

23.9

Sales EBITDA

6.2

39Operating Divisions

Bettina Messmer, Product Manager,

Consumer Products division

Success through Dynamic Product Management

The Leica DISTO™ Laser Distance Meter holds a

strong position in a dynamic and attractive growth

market. The stiffly competitive nature of this

market results in a relatively short product life cycle,

comparable with other technical consumer goods,

such as digital cameras. Although significant inno-

vations are launched at relatively short intervals, it

is vital that we operate an active life cycle manage-

ment program for each product generation. This

enables Leica Geosystems to respond rapidly to

changes in the market environment and to keep

a step ahead of the competition.

In view of the fact that we did not release a new

generation of products during the past fiscal year,

we focused our strategic marketing efforts on

life cycle management activities, with the aim of

increasing the competitiveness of the current

generation of instruments and consolidating our

leading market position. Although the current

generation of products is still the benchmark for

the industry, we introduced a number of selected

actions that further improved the strategic position-

ing of our product lines.

In the course of this year, the division successfully

launched two new products. The Leica DISTO™

classic5a superseded the current generation, offer-

ing increased measurement accuracy with a new,

innovative color design. In addition, to mark

the sale of a total of 750,000 DISTO™ products, the

division offered the Leica DISTO™ special5, a special

limited edition, which thanks to its attractive po-

sitioning between beginner and advanced models,

appeals to new customer segments.

40

prompted Frost & Sullivan to declare the Local-

Positioning-Technology-based (LPT) T-Probe and

T-Scan the winners of their 2004 Industrial Auto-

mation Product Innovation of the Year Award.

The New-York-based company said the nomina-

tion acknowledges Leica Geosystems’ “excellence

in technology leadership within its industry.”

After successful on-site benchmark tests, the

first T-Scans were shipped to customers in Asia

and the US in February. The official launch and

production ramp-up are planned for the first

quarter of fiscal year 2006. The T-Scan will facil-

itate and expedite Leica Geosystems’ entry into

high-accuracy digitization for the aerospace and

automotive industries.

In November 2004, Leica Geosystems signed a

global software license and collaboration agree-

ment with Metrologic Group, a leading 3-D

industrial measurement software provider. Leica

Geosystems’ portable CMM’s will feature custom-

ized Metrolog XG for Leica Geosystems software,

the best of its kind on the market, and custom-

ers will benefit from twice-yearly updates.

Consolidating our global positionThese moves will strengthen Leica Geosystems’

leading position as a complete-solution provider

to the automotive, aerospace and general pre-

cision industries. The division already supplies

all the aerospace industry’s big players, such as

Lockheed Martin, Boeing, Northrop Grumman,

Alenia Aeronautica, M-Torres and Eurocopter,

and has delivered more than 100 portable CMM

systems to Airbus A380 plants across Europe.

The division has also launched several initiatives

in Asia. A distribution agreement signed last

year with Tokyo Boeki Techno Systems in Japan

is yielding first results. The automotive industry

has placed orders for several portable CMM sys-

tems, and we predict higher sales in the near

future. As part of the division’s initiative in China,

several sales people were hired to better ad-

dress the automotive market and strengthen our

solid position in aerospace.

Service and support are key components in the

Metrology division’s strategy. As a highly cus-

tomer-oriented company, we strive to provide

the best service and support in the industry.

The increase in service and support revenue

(+9% compared with the previous year) can be

Fiscal year 2005 saw the first shipments of

Leica Geosystems’ new T-Probe, the award-win-

ning walk-around coordinate measuring machine

(CMM). Famous names like Airbus, Boeing or

Eurocopter in aerospace, and Ford, Rolls Royce,

BMW and others in the automotive industry

now benefit from the device’s outstanding fea-

tures. Despite the successful product launch,

the Metrology division had a challenging year.

Sales came in slightly below the prior year, but

on a currency-adjusted basis increased 3.2%.

Operating margins were also under pressure

during the year. The Metrology division closed

the year with an 11.5% EBITDA margin, down

from last year’s 18.9%. Profitability declined due

to the combined effects of lower gross margin

and increased operating investments. The time-

consuming launch of the T-Probe pushed sales

down during the first two quarters, but these

were followed by three very strong months and

an excellent fourth quarter. Several new sales

and marketing staff were hired to

promote the products to new sectors,

especially the automotive industry.

Recognition for technologicalleadershipThe handheld, wire-

less T-Probe was well re-

ceived by the market. Sales

to the automotive industry in-

creased substantially within six

months and helped strengthen

Leica Geosystems’ position

as a leading 3-D industrial

measurement solution

provider. An in-depth

analysis of the

product’s

features and

benefits backed

by market research

Metrology

T-Probe

Leica GeosystemsAnnual Report

41Operating Divisions

seen as a confirmation and appreciation of our

effort. For the upcoming fiscal year 2006, Me-

trology expects to continue to grow revenues in

line with previously communicated targets. The

division’s assumptions are based on orders from

new aerospace projects, further penetration of

the automotive and general industries thanks to

new Local-Positioning Technology solutions, and

realization of market opportunities through fo-

cused sales and marketing efforts.

Making Inroads in the Automotive Industry

Three years ago, Metrology’s European sales team

decided to even out market penetration in our key

sectors. We calculated that our Local-Positioning

Technology (LPT) would enable us to compete

against large CMM competitors and branch out into

other areas. So, we started a campaign to train our

sales and support people in these new applications

and introduce Leica Geosystems to customers who

were unaware of our metrology solutions.

Our large-volume, portable probing system has giv-

en many customers an exciting solution to old

measurement problems. Either of the methods pre-

viously used – large, fixed CMMs or smaller probing

arms – created an accumulation of errors and in-

creased measurement time that has long plagued

the measurement world.

One year after launch and the signing of a

strategic alliance to supply our portable CMMs with

Metrolog XG for Leica Geosystems Software, our

strategy is paying off. A lull in the aerospace indus-

try has been followed by success with automotive

and general industrial manufacturing applications.

In our first year, we delivered T-Probe systems to a

significant number of major car manufactures in-

cluding Renault F1. To quote Micky Nolan of Renault

F1, “The Leica Laser Tracker and T-Probe is the only

measurement system on the market that fulfils the

Renault F1 Team criteria.”

Duncan Redgwell, Vice President Sales

Europe, Metrology division

Sales in CHF million

Currency-adjusted sales growth in %

Sales growth in %

EBITDA in CHF million

EBITDA of sales in %

FY03 FY04 FY05

66

66

59

0

100

80

60

40

20

0

Sales EBITDA

FY03 FY04 FY05

81313

0

25

20

15

10

5

0

15.2

11.9 3.2

–0.9

11.518.922.1

42Leica GeosystemsAnnual Report

The Special Products division was created to

house businesses and other assets that Leica

Geosystems intends to divest. The divestment

program continued during fiscal year 2005. In

December 2004, we completed the sale of our

50% interest in Leica Instruments (Singapore)

Pte Ltd, a 50/50 joint venture, for CHF 4.4 mil-

lion. The larger part of Leica Geosystems’ share in

the assets of Leica Instruments (Singapore) Pte

Ltd was simultaneously transferred to the newly

established Singapore subsidiary, Leica Geo-

systems Technologies Pte Ltd. As of the fourth

quarter of fiscal year 2004/05, this new subsi-

diary will be accounted for under the Surveying

& Engineering division.

The remaining activities in the Special Products

division comprise the following businesses:

PolymecaA mechanical-component factory in Heerbrugg.

Polymeca continues to be an important sup-

plier of parts and components for the survey-

ing products we assemble in Switzerland.

Polymeca is simultaneously pursuing third-

party contracts, and has been successful in

developing its portfolio of external customers.

MX marineOur GPS operation for marine navigation sys-

tems, based in Torrance, California.

Special Products Unlike the other divisions of Leica Geosystems,

the Special Products division is not managed

centrally, rather at the operational-unit level. The

individual divestment projects, however, are

managed centrally at the corporate headquarters

in Heerbrugg.

For the current fiscal year 2005, Special Products

operations generated CHF 26.7 million in third-

party sales, which included sales of Leica Instru-

ments through the third quarter. The combined

operations of Special Products generated EBITDA

of CHF 11.4 million for the full year.

Sales in CHF million

Currency-adjusted sales growth in %

Sales growth in %

EBITDA in CHF million

EBITDA of sales in %

FY03 FY04 FY05

27

33

27

0

100

80

60

40

20

0

Sales EBITDA

FY03 FY04 FY05

11119

0

25

20

15

10

5

0

34.0

34.1

42.9

–19.0

21.9

–17.6

24.4

43Locations

Leica Geosystems Worldwide

Leica Geosystems has

subsidiaries in 21 countries,

with over 120 agencies

worldwide.

Europe

Belgium

Denmark

France

Germany

Italy

Netherlands

Norway

Portugal

Russia

Spain

Sweden

Switzerland

United Kingdom

Asia Pacific

Australia

China

Japan

Korea

Singapore

North and

South America

Canada

Mexico

United States

Company Contact Information

Corporate Headquarters

Leica Geosystems AGHeinrich-Wild-StrasseCH-9435 HeerbruggPhone +41 71 727 3131Fax +41 71 727 4674

Investor RelationsPhone +41 71 727 3064

Corporate CommunicationPhone +41 71 727 4252

Divisional Headquarters

Surveying & Engineering divisionLeica Geosystems AGHeinrich-Wild-StrasseCH-9435 HeerbruggPhone +41 71 727 3131Fax +41 71 727 4674President: Clement Woon

High-Definition Surveying(HDS) divisionLeica Geosystems HDS, LLC4550 Norris Canyon RoadSan Ramon, CA 94583USAPhone +1 925 790 2300Fax +1 925 790 2309President: Erwin Frei(through May 2005)

GIS & Mapping divisionLeica GeosystemsGIS & Mapping, LLC2801 Buford Highway NE, Suite 300Atlanta, Georgia 30329-2137USAPhone +1 404 248 9000Fax +1 404 248 9400President: Bob Morris

Consumer Products divisionLeica Geosystems AGHeinrich-Wild-StrasseCH-9435 HeerbruggPhone +41 71 727 3131Fax +41 71 727 4674President: Klaus Brammertz

Metrology divisionLeica Geosystems AGMönchmattweg 5CH-5035 UnterentfeldenPhone +41 62 737 6767Fax +41 62 723 0734President: Walter Mittelholzer

44Leica GeosystemsAnnual Report

Primary Manufacturing Facilities

Leica Geosystems AGHeinrich-Wild-StrasseCH-9435 HeerbruggPhone +41 71 727 3131Fax +41 71 727 4674

Leica Geosystems Technologies Pte Ltd2 WoodlandsSector 1 #01–10Woodland East Industrial EstateSingapore 738068

Polymeca AGHeinrich-Wild-StrasseCH-9435 HeerbruggPhone +41 71 727 4141Fax +41 71 727 4720Contact: Heinz Christen

Sales Companies

AustraliaLeica Geosystems Pty Ltd.Gladstone Road, Dutton ParkBrisbane, QLD 4102AustraliaPhone +61 7 3891 9772Fax +61 7 3891 9336Contact: Martin Nix

Leica GeosystemsGIS & Mapping Pty Ltd.P.O. Box 213Glenbrook, NSW 2773AustraliaPhone +61 2 4739 0669Fax +61 2 4739 0339Contact: Steve Gaynor

BelgiumLeica Geosystems NVPegasus ParkDe Kleetlaan 4, bus 2B-1831 DiegemPhone +32 2 209 0700Fax +32 2 209 0701Contact: Rene Worms

CanadaLeica Geosystems Ltd.513 McNicoll AvenueWillowdaleOntario M2H 2C9CanadaPhone +1 416 497 2460Fax +1 416 497 2053Contact: Bob Williams

Greater China RegionLeica Geosystems AGBeijing Representive OfficeRoom 1808, China Life Building16, Chao Yang Men DajieChao Yang DistrictBeijing 10020People’s Republic of ChinaPhone +86 10 8525 1838Fax +86 10 8525 1836Contact: Peter Lippmann

Leica Geosystems Ltd.Room 1701-325, Westlands RoadQuarry BayHong KongPeople’s Republic of ChinaPhone +852 2564 2299Fax +852 2564 4199Contact: Peter Lippmann

Leica Geosystems (Shanghai) Co. Ltd.Room 10402–10404No. 498 Guoshoujing RoadPudong Software ParkShanghai 201203People’s Republic of ChinaPhone +86 21 5027 1218Fax +86 21 5027 1228Contact: Hans Ni

Leica Geosystems (Wuhan) Co. Ltd.The 1st Floor, Incubator BuildingWuhan University Science ParkJiangxia Avenue, East Lake TechnologyDevelopment ZoneWuhan 430223People’s Republic of ChinaPhone +86 27 8719 6190Fax +86 27 8719 6190Contact: Deyang Wu

DenmarkLeica Geosystems A/SHorkaer 12ADK-2730 HerlevPhone +45 4454 0202Fax +45 4454 0222Contact: Morten Rasmussen

FinlandLeica Nilomark OY (10.5% JV)Sinimäentie 10CP.O. Box 111SF-02631 EspooPhone +358 9 6153 555Fax +358 9 5022 398Contact: Seppo Salo

FranceLeica Geosystems SarlParc du Saint-Laurent54, route de SartrouvilleBâtiment le QuébecF-78232 Le Pecq CedexPhone +33 1 3009 1700Fax +33 1 3009 1701Contact: Jean-Philippe Picon

GermanyLeica Geosystems GmbH VertriebHans-Bunte-Strasse 5D-80992 MünchenPhone +49 89 1498 10 0Fax +49 89 1498 10 33Contact: Lothar Assenmacher

ItalyLeica Geosystems S.p.A.Via Condognino 12I-26854 Cornegliano Laudense (LO)Phone +39 0371 697321Fax +39 0371 697333Contact: Andrea Cabrucci

45Locations

JapanLeica Geosystems K.K.Regional Headquarters Surveying & Engineering DivisionBunkyo Green Court, Bldg.21F, 2-28-8 HonkomagomeBunkyo-ku, Tokyo 113-6591JapanPhone +81 3 5940 3011Fax +81 3 5940 3012Contact: Tsutomu Kohara

KoreaLeica Geosystems KK, Korea BranchGuGu Building, 1F145-18 Samsung-dongGangnam-gu, Seoul 135-090Phone +82 2 598 1919Fax +82 2 598 9686Contact: Y. K. Choi

MexicoLeica Geosystems S.A. de C.V.Porfirio Diaz, Pte No. 35Colonia Nochebuena03720 Mexico D.F.Phone +525 563 5011Fax +525 611 3243Contact: Cesar Lanatta

NetherlandsLeica Geosystems B.V.Cobbenhagenstraat 7NL-2288 ET RijswijkPhone +31 70 307 89 00Fax +31 70 307 89 19Contact: Rene Worms

NorwayLeica Geosystems ASBrobekkveien 80N-0582 OsloPostboks 502N-0512 OsloPhone +47 22 709 180Fax +47 22 255 624Contact: Morten Rasmussen

PortugalLeica Geosystems – SistemasPara Topgrafia e GeodesiaSociedade Unipessoal, LtdaEstrada de PolimaArmazém Christel Peitz, S/NAboboda – PolimaP-2785-543 Salo Domingos de RanaPhone +351 214 480 930Fax +351 214 480 931Contact: Jaime Fernandez

RussiaLeica Geosystems OOOPartiyny pereulok, 1/57 stroenie 3,Business Center M-stilyOffice 203/204113093 MoscowRussiaPhone +7 095 250 72 69Fax +7 095 250 72 53Contact: Vladimir Gulin

SingaporeLeica Geosystems (Singapore) Pte Ltd#04-55/58 German Center25 International Business ParkSingapore 609916Phone +65 6776 9318Fax +65 6774 7145Contact: Matthew Smith

SpainLeica Geosystems S.L.Nicaragua 46, 5° 4aE-08029 BarcelonaPhone +34 93 494 9440Fax +34 93 494 9442Contact: Jaime Fernandez

SwedenLeica Geosystems ABGlimmervägen 14Box 781S-19127 SollentunaPhone +46 8 625 3000Fax +46 8 625 3010Contact: Morten Rasmussen

SwitzerlandLeica Geosystems AGEuropastrasse 21CH-8152 GlattbruggPhone +41 1 809 3311Fax +41 1 810 7937Contact: Hans-Ulrich Müller

Leica Geosystems GIS & Mapping GmbHHeinrich-Wild-StrasseCH-9435 HeerbruggPhone +41 71 727 3465Fax +41 71 727 4691Contact: Michael Hut

United KingdomLeica Geosystems Ltd.Regional Headquarters Surveying &Engineering DivisionDavy AvenueMilton Keynes MK5 8LBUnited KingdomPhone +44 1908 256 500Fax +44 1908 609 992Contact: Mark Concannon

USALeica Geosystems Inc.Regional Headquarters Surveying & Engineering Division5051 Peachtree Corners CircleSuite 250Norcross, GA 30092USAPhone +1 770 326 9500Fax +1 770 447 0710Contact: Bob Williams

46Leica GeosystemsAnnual Report

Glossary

Coordinate Measuring Machine (CMM)This machine is normally fixed inplace with a maximum volume of 3–5–8 meters. It incorporates a probe, which can be slid alongthree physically defined and mu-tually perpendicular axes. An ob-ject to be measured is placed onthe machine. By touching a probeagainst the object, the currentcontact position of the probedefines a point on the object thatyields its three coordinates.

Electronic Distance Measurement (EDM)EDM is based on the idea thatlight travels at a finite velocityand measures the time it takesfor a signal to travel back andforth between two points. Thetwo primary technical principlesof electronic distance measure-ment are (1) time of flight – thedirect measurement of the timeelapsed between the emissionand the reception of a light pulse,and (2) phase difference – themeasurement of the differencebetween the emitted and re-flected light while its emitted in-tensity is continuously changedin intensity over time.

GeomaticsThe science or profession re-lated to the process of capturingand using spatial data throughinformation technology. Broadranges of applications are partof, or associated with, geomatics,including surveying, geography,and mapping.

GeoreferenceThe established relationship between any kind of data likethe page coordinates on a pla-nar map or an aerial image andthe real-world coordinates.

GIS (Geographic Information System)An integrated set of hardwareand software designed to input,

store, manipulate, and output,geographically referenced data(i.e. geographic information). Anydata referenced to a location onthe Earth can be considered geo-graphic information. All geograph-ic information has three compo-nents: the attribute of interest(i.e. a measurement or class suchas temperature or forest type),the location to which the attri-bute refers, and time (i.e. themoment or period of time whenthe attribute was observed).

GNSS/GPS – Global NavigationSatellite SystemsThese satellite-based systemsprovide signals for positioningand navigation. GNSS includes,but is not limited to, GPS, theRussian supported Glonass sys-tem, the planned EuropeanGalileo system and various an-cillary systems such as WAAS for North America, a system ofsatellites launched by the USADepartment of Defense. The con-stellation of Navstar satellitesthat orbit the Earth provide po-sition and time information byemitting radio signals.

GPS Reference StationA GPS receiver based on a fixedpoint, providing its measure-ments to roving (i.e. mobile ormoving) receivers in order toallow those receivers to improvetheir positioning accuracy.

Laser ScannerCaptures reality by digitizing anobject with a laser. Every trans-mitted laser pulse is used tomeasure a distance to the pointof reflection, and simultaneously,horizontal and vertical anglemeasurements are taken. Thesebasic measurements are used tocalculate three-dimensional co-ordinates for individual points. A Laser Scanner is typically ableto measure between 1,000 and2,000 points per second to an ac-curacy of less than 1 centimeter.

Laser ScanningA technique to capture reality ina three-dimensional manner. A typical laser scanning systemconsists of a Laser Scanner toacquire the Cloud of points anda PC-based software package to visualize and further processthe data.

Laser TrackerA dynamic tracking laser inter-ferometer. The instrument uses an interferometer beam targetedonto a retro-reflector. If the re-flector moves, the return beamshifts laterally. This shift is detect-ed and the tracker moves to bringthe beam back on line again. Inthis way a tracking mechanismis established. The angle and in-terferometer readings are contin-uously monitored and convertedinto three-dimensional coordi-nates at 1,000 times per second,the rate at which a moving re-flector can be tracked in space.

LIDARAn acronym for LIght DetectionAnd Ranging, is often used as asynonym for EDM.

MetrologyThe science of dimensionalmeasurement in one, two, andthree dimensions.

PhotogrammetryThe application of photographicprinciples to the science of map-ping – the science of obtainingreliable spatial measurementsfrom imagery.

Pointcloud/Cloud of pointsThe result of scanning an objector a scene in reality with a LaserScanner. A Cloud of points typi-cally consists of thousands ofindividual points, which gener-ate a digitized, fully three-di-mensional representation of thescene or object in question. Eachpoint within a Cloud of points is defined by three coordinates

47Glossary

(x, y, z), as well as other addi-tional information like color orreflectivity. Clouds of points serveas a basis to visualize the cap-tured objects on a PC and/or toextract geometrical informationfrom the scanned objects toserve a multitude of applications.

Portable CMM (PCMM) InstrumentsMobile CMMs that enable the in-strument to be brought closer tothe object in question. PortableCMMs may be laser trackers, digi-tal photogrammetry (videogram-metry) systems, total stations,laser scanners or articulated arms.

Remote SensingA group of techniques for col-lecting images or other forms ofdata about an object from mea-surements made at a distancefrom the object, and the pro-cessing and analysis of the data.Remote Sensing can be cate-gorized into the following sub-systems:

Active System. A remote sens-ing system that transmits itsown electromagnetic emana-tions at an object(s) and thenrecords the energy reflectedor refracted back to the sensor. Radar is an example of an active system. It sends out pulses of microwaves and then receives the echo reflected from the target. Passive Sensing. A sensing sys-tem that detects or measuresradiation emitted or reflectedby the target. The signal re-ceived by the passive sensormay be composed of energyemitted by the atmosphere,reflected energy from the sur-face, energy emitted by thetarget, or energy transmittedthen emitted by the surface. Aerial Sensing. Remote sens-ing from an airborne platform. Satellite Sensing. Remotesensing from a satellite plat-form.

Terrestrial Positioning Systems (TPS)Systems that measure anglesand distances by using a combi-nation of lenses, prisms andmirrors, together with associatedlaser technologies and softwareapplications, in traditional sur-veying products such as levels,theodolites, distancers and totalstations.

TheodoliteAn instrument for measuringangles from a measuring stationto a remote target point. Thepointing is made using a tele-scope, which rotates about twointersecting orthogonal axes. Thehorizontal and vertical anglesmeasured on these axes definethe pointing.

Three-Dimensional Digitizingand VisualizationA variety of technologies thatfacilitate the rapid acquisition,management, handling and representation of enormous volumes of spatial data. Today,multicamera systems and, increasingly, laser scanners areused for data acquisition. Whereas camera systems needextensive computer processing,laser scanners deliver a 3-Ddigital model directly.

Total StationA theodolite equipped with anintegrated electronic distancemeter, which enables it to mea-sure a distance along the line ofsight.

TriangulationA technique by which targetsare located in a global coordinatesystem by measurement of di-rections from two or more fixedand known locations to the sametarget (intersection).

48Leica GeosystemsAnnual Report

Disclaimer

Under the safe harbor provisions of the U.S. PrivateSecurities Litigation ReformAct of 1995, we caution investors that all statements otherthan statements of historical fact included in this document,including without limitation, those regarding our financialposition, business strategy, plans and objectives of manage-ment for future operations (including development plans andobjectives relating to our existing and future products), areforward-looking statements. Such forward-looking statementsinvolve known and unknown risks, uncertainties and otherfactors, which may cause our actual results, performance orachievements, or industry results, to be materially differentfrom any future results, performance or achievements ex-pressed or implied by such forward-looking statements. Suchforward-looking statements are based on numerous assump-tions regarding our present and future business strategies andthe environment in which we expect to operate in the future.Important factors that could cause our actual results, perfor-mance or achievements to differ materially from those in theforward-looking statements include, among other factors: (i) our ability to develop and introduce new products andtechnologies that gain market acceptance on a timely basis;(ii) our ability to respond to competitive challenges, such asthe introduction of innovative products or technologies by our competitors; (iii) our ability to identify and realize growthopportunities; and (iv) overall levels of investment in infra-structure and capital spending in our markets. Additionally,any forward-looking statements speak only as of the date ofthis document. We expressly disclaim any obligation or under-taking to release publicly any update of or revisions to anyforward-looking statement contained herein to reflect anychange in our expectations with regard hereto or any changein events, conditions or circumstances on which any suchstatement is based.

Publishing Details

EditorGeorge Aase, Director Investor Relations,Leica Geosystems AG, Heerbrugg, Switzerland

Concept and designRamstein Ehinger Associates AG, Basel/Zurich, Switzerland

TextMichael Johnson, Zurich, Switzerland

LithographyBlue Horizon AG, Winterthur , Switzerland

PrintingPrintlink AG, Wetzikon, Switzerland

This Annual Report is published in English and German.In the case of inconsistencies in the German translation, the English original version shall prevail.

Photo Credits

IllustrationsAndré Wetter, Fislisbach, Switzerland; Ramstein EhingerAssociates, Basel/Zurich, Switzerland: cover, pp. 2, 10, 20, 28

PhotographyAmberg Messtechnik AG, Regensdorf, Switzerland: p. 28Apostrophe Films Pte Ltd, Singapore: p. 13Howard Brundrett, Meilen, Switzerland: pp. 7, 9, 15, 17, 19,26, 37, 39, 41Corbis: p. 10Dave Dawson, Dave Dawson Photography, USA: p. 33Getty Images: pp. 20, 23, 24, 25Imagepoint: p. 2Institut für Kunstgeschichte, Universität Bern, Switzerland,Prof. Dr. Volker Hoffmann, Nikolaos Theocharis: pp. 10,11Leica Geosystems AG, Heerbrugg, Switzerland: pp. 15, 32, 34, 36, 38, 40 (products)Jonathan Kung, USA: p. 35Opus, Copenhagen, Denmark: cover, pp. 2, 10, 20, 28Prime 8 Photo, USA: pp. 16, 37Prisma Dia: coverWolf Survey & Mapping, Canada: p. 25 (portrait)

Investor & Financial Media ContactGeorge Aase

Director Investor Relations

Phone +41 71 727 30 64

investor@leica-geosystems.com

Corporate CommunicationNicholas Bloch

Head of Corporate Communication and

Public Relations

Phone +41 71 727 42 52

nicholas.bloch@leica-geosystems.com

Whether building a house or a bridge, a map or an aircraft, you

need reliable measurements. That’s why more companies trust Leica

Geosystems to collect, analyze, and present spatial information.

When it has to be right.

- when it has to be right

Leica Geosystems AGHeinrich-Wild-StrasseCH-9435 HeerbruggSwitzerlandPhone +41 71 727 31 31

www.leica-geosystems.com