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.
Estimates and judgments
Main 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 January 1, 2024 |
|
72 |
|
33 |
|
71 |
|
176 |
Of which current |
|
25 |
|
3 |
|
6 |
|
34 |
|
|
|
|
|
|
|
|
|
Changes: |
|
|
|
|
|
|
|
|
- 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 December 31, 2024 |
|
49 |
|
30 |
|
85 |
|
164 |
Of which current |
|
24 |
|
3 |
|
50 |
|
77 |
|
|
|
|
|
|
|
|
|
Changes: |
|
|
|
|
|
|
|
|
- Additions |
|
33 |
|
– |
|
16 |
|
49 |
- Releases |
|
(12) |
|
– |
|
(47) |
|
(59) |
- Uses |
|
(24) |
|
(4) |
|
(14) |
|
(42) |
- Reclassification to held for sale |
|
(6) |
|
– |
|
(3) |
|
(9) |
- Other change |
|
– |
|
– |
|
– |
|
– |
Total changes |
|
(9) |
|
(4) |
|
(48) |
|
(61) |
|
|
|
|
|
|
|
|
|
Balance at December 31, 2025 |
|
40 |
|
26 |
|
37 |
|
103 |
Of which current |
|
37 |
|
– |
|
14 |
|
51 |
The base rate used for discounting increased from 3.4% to 3.9%. Depending on the risk profile, the discount rates used at the end of 2025 vary from 3.9% to 6.2% (2024: 3.4% to 5.3%). The balance of provisions measured at present value increased by less than €2 million in 2025 in view of the passage of time (same in 2024).
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. The additions of €33 million related mainly to various smaller restructuring projects across the company.
The provisions for environmental costs mainly relate to soil clean-up obligations 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 ten years. The release of €48 million includes the positive outcome of a legal dispute of €26 million and the release of Insurance related provisions of €9 million, following the merger of the internal Insurance companies.