Accounting policy
Provisions are recognized when there is a present legal or constructive obligation as a result of past events, when it is probable that an outflow of resources will be required to settle the obligation, and when a reliable estimate of the amount can be made. The underlying assumptions in the recognition of provisions are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. In cases where the effect of the time value of money is material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation. Where discounting is used, the increase in the provision due to time passing is recognized as financial expense. Differences in final obligations and initial estimates are recognized in the consolidated income statement in the period in which such determination is made.
In cases where the effect of the time value of money is material, provisions are measured at the present value of the expenditures expected to be required to settle the obligation.
Estimates and judgments
Many estimates relate to determining the likelihood and timing of potential cash flows included in their measurement.
|
|
Restructuring costs and termination benefits |
|
Environmental costs |
|
Other provisions |
|
Total |
|---|---|---|---|---|---|---|---|---|
Balance at 1 January 2023 |
|
41 |
|
29 |
|
25 |
|
95 |
Of which current |
|
39 |
|
2 |
|
4 |
|
45 |
|
|
|
|
|
|
|
|
|
Changes: |
|
|
|
|
|
|
|
|
- Acquisition |
|
3 |
|
– |
|
46 |
|
49 |
- Additions |
|
102 |
|
4 |
|
40 |
|
146 |
- Releases |
|
(9) |
|
– |
|
(21) |
|
(30) |
- Uses |
|
(66) |
|
(3) |
|
(16) |
|
(85) |
- Other change |
|
1 |
|
3 |
|
(3) |
|
1 |
Total changes |
|
31 |
|
4 |
|
46 |
|
81 |
|
|
|
|
|
|
|
|
|
Balance at 31 December 2023 |
|
72 |
|
33 |
|
71 |
|
176 |
Of which current |
|
25 |
|
3 |
|
6 |
|
34 |
|
|
|
|
|
|
|
|
|
Changes: |
|
|
|
|
|
|
|
|
- Acquisition |
|
– |
|
– |
|
– |
|
– |
- Additions |
|
38 |
|
– |
|
66 |
|
104 |
- Releases |
|
(4) |
|
– |
|
(24) |
|
(28) |
- Uses |
|
(58) |
|
(3) |
|
(22) |
|
(83) |
- Other change |
|
1 |
|
– |
|
(6) |
|
(5) |
Total changes |
|
(23) |
|
(3) |
|
14 |
|
(12) |
|
|
|
|
|
|
|
|
|
Balance at 31 December 2024 |
|
49 |
|
30 |
|
85 |
|
164 |
Of which current |
|
24 |
|
3 |
|
50 |
|
77 |
The rate used for discounting decreased from 3.5% to 3.4%. Depending on the risk profile, the discount rates used at the end of 2024 vary from 3.4% to 5.3% (2023: 3.5% to 5.7%). The balance of provisions measured at present value increased by less than €2 million in 2024 in view of the passage of time (similar to 2023). Provisions for restructuring costs and termination benefits mainly relate to the costs of redundancy schemes connected to the dismissal of employees and costs of termination of contracts. These provisions generally have a term of one to three years.
Regarding the provisions for restructuring costs and termination benefits, the additions related mainly to an addition of €4 million to the existing provisions in relation to the merger and integration, and the creation of a provision for an amount of €21 million in connection with the closure of a plant following the divestment of the Yeast Extract business. The usage of these provisions mainly related to the existing provisions for the merger and integration (€17 million), the restructuring of the vitamin asset footprint (€10 million), and the closure of the Pinova ingredients plant (€18 million). Other additions to provisions for restructuring costs and termination benefits in 2024 relate mainly to the various smaller restructuring projects (same as in 2023). The provisions for environmental costs relate to soil clean-up obligations, among other things and have an average life of around 30 years.
Several items have been combined under Other provisions, e.g., demolition costs, onerous contracts and legal claims. These provisions have an average life of one to 10 years. Following the divestments in 2024, provisions for onerous contracts amounting to €32 million were created.