24 Employee benefits

Employee benefit liabilities

The employee benefit liabilities of €205 million (2024: €550 million) consist of €91 million related to pensions (2024: €367 million), €56 million related to other post-employment benefits (2024: €60 million), and €58 million related to other employee benefits (2024: €123 million). See also the table at the end of this note.

The Group also operates a number of defined benefit plans and defined contribution plans throughout the world, the assets of which are generally held in separately administered funds. The pension plans are generally funded by payments from employees and from the relevant Group companies. The Group also provides certain additional healthcare benefits to retired employees in the US and Switzerland.

For the core countries (Switzerland, United States of America, United Kingdom, and Germany), costs for the defined benefit plans relating to pensions are expected to be €59 million in 2026. In 2026, dsm-firmenich is expected to contribute €49 million (actual 2025: €42 million) to its defined benefit plans in these countries.

Changes in net liabilities of the post-employment benefits recognized in the balance sheet are shown in the overview below. The decrease in the net liabilities during 2025 is mainly due to the reclassification of assets and liabilities relating to the ANH business to held for sale.

Pension-plan assets

The fair value of the pension-plan assets consists of 65% of quoted assets (2024: 74%). The pension-plan assets do not include dsm-firmenich shares.

The countries with the most significant defined benefit obligations for dsm-firmenich are specified in the table below.

Sensitivities of significant actuarial assumptions

The discount rate, the future increase in wages and salaries, and the pension increase rate were identified as significant actuarial assumptions. The following impacts on the defined benefit obligation are to be expected.

• A 0.25% increase/decrease in the discount rate would lead to a decrease/increase of 3.2% (2024: 3.2%) in the defined benefit obligation

• A 0.25% increase/decrease in the expected increase in salaries/wages would lead to an increase/decrease of 0.3% (2024: 0.3%) in the defined benefit obligation

• A 0.25% increase/decrease in the expected rate of pension increase would lead to an increase/decrease of less than 1.6% (2024: 1.7%) in the defined benefit obligation

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

Main defined benefit plans description

The dsm-firmenich Group companies have various pension plans, which are geared to the local regulations and practices in the countries in which they operate. As these plans are designed to comply with the statutory framework, tax legislation, local customs, and economic situation of the countries concerned, it follows that the nature of the plans varies from country to country. The plans are based on local legal and contractual obligations.

dsm-firmenich’s current policy is to offer defined contribution retirement benefit plans to new employees wherever possible. However, dsm-firmenich still has a (small) number of defined benefit pension and healthcare schemes from the past or in countries where legislation does not allow us to offer a defined contribution scheme. Generally, these schemes have been funded through external trusts or foundations, where dsm-firmenich faces the potential risk of funding shortfalls. The most significant defined benefit schemes are:

• Pension plan at Firmenich SA in Switzerland

• Affiliation to the DSM Nutritional Products (DNP) AG pension plan in Switzerland (DNP AG)

• DSM UK pension scheme in the UK

• Pension plan at Firmenich, Inc. in the US

For each plan, the following characteristics are relevant:

Firmenich SA pension plan and affiliation to DNP AG pension plan in Switzerland

Both the DNP AG pension plan and the Firmenich SA pension plan are typical Swiss cash balance plans. For accounting purposes, these plans are qualified as defined benefit plans. They are contribution-based plans, with no promise of indexation for ongoing pensions. The Swiss state minimum requirements for occupational benefit plans have, however, to be respected.

The purpose of the plans is to protect the dsm-firmenich employees against the economic consequences of retirement, disability, and death. The employer and employees pay contributions into the pension plan at rates set out in the pension plans rules based on a percentage of salary. The amount of the retirement account can be taken by the employee at retirement in the form of pension or capital.

The weighted average duration of the defined benefit obligation for the dsm-firmenich business affiliated to the DNP AG pension plan is 13.0 years (2024: 13.9 years) and for the Firmenich SA pension plan 13.8 years (2024: 15.1 years), which could be seen as an indication of the maturity profile of the schemes.

According to the Swiss Federal Law on Occupational Retirement, Survivors and Disability (LPP/BVG), the Swiss pension plans are managed by independent and legally autonomous entities which have the legal structure of a foundation. Both plans are managed by different foundations. For both foundations, the Pension Board is composed of employee and employer representatives in equal numbers. Each year, the Pension Boards decide on the level of interest, if any, to apply to the retirement accounts in accordance with the pension policy of the respective pension plan.

The Pension Boards are also responsible for the investment of the assets and defining the investment strategy for long-term returns with an acceptable level of risk. Within each foundation, the plan assets are invested collectively (no individual investment choice is offered).

DSM UK pension scheme

The DSM UK pension scheme was closed as of September 30, 2016 for all pension accruals. An unconditional indexation policy is applicable for the vested pension rights. The weighted average duration of the defined benefit obligation is 12.1 years (2024: 12.9 years), which could be seen as an indication of the maturity profile of the scheme.

The pension plan is managed and controlled by a dsm-firmenich company pension fund. The Board of Trustees consists of representatives of the employer and the employees, who have an independent role. There is a long-term de-risking strategy for the DSM UK pension scheme in place with the objective to align the company’s intentions and the Trustees’ responsibility with respect to this plan.

Pension plan at Firmenich, Inc. in the US

The plan provides benefits on a defined benefit basis and is closed to all new employees. The plan was also frozen to the majority of current employees for future benefit accruals. The grandfathered group of participants to the defined benefit plan continues to accrue benefits that are payable at retirement and on death in service. With exceptions for optional lump sum amounts for certain sections of the plan, the benefits are paid out as annuities.

The US pension plan is qualified under, and is managed in accordance with, the requirements of US federal law. In accordance with federal law, the assets of the plan are legally separate from the employer and are held in a pension trust.

The law requires minimum and maximum amounts that can be contributed to the trust, together with limitations on the amount of benefits that may be provided under the plan. There are named fiduciaries that are responsible for ensuring the plan is managed in accordance with the law. The fiduciaries are responsible for defining the investment strategy for long-term returns with an acceptable level of risk as well as the oversight of the investment of plan assets.

The employees do not contribute to the plan and the employer contributes to the plan amounts which are at least equal to the minimum required by the law and not more than the maximum that would limit the tax deductibility of the contributions.

The weighted average duration of the defined benefit obligation is 8.6 years (2024: 8.8 years), which could be seen as an indication of the maturity profile of the scheme.

Impact ANH Carve-out

Two core country pension plans are impacted in the reclassification of liabilities and assets to held for sale. This pertains to the affiliated NewCo businesses of the DSM Nutritional Products (DNP) AG pension plan in Switzerland (DNP AG), which is included in the transaction perimeter with the sale of DNP AG and the funded as well as unfunded pension plans at DSM Nutritional Products GmbH in Germany (DNP GmbH).

Other long-term employee benefits

Other long-term employee benefits comprise jubilees, long-term incentive (LTI) plans to senior management, and deferred compensation liabilities. The changes in other employee benefits are listed in the table below.