1. REPORTING ENTITY
Agfa-Gevaert NV (\u2018the Company\u2019) is a company established in BelgiumThe address of the Company\u2019s registered office is Septestraat 27, 2640 Mortsel
The 2024 consolidated financial statements of the Group include the Company and 66consolidated subsidiaries (2023: 71 consolidated subsidiaries) controlled by the Company. Investments in subsidiaries are listed in note 42.
In Europethere are a few subsidiaries in which non-controlling interests have an interest that is of minor importance to the Group.
2. BASIS OF ACCOUNTING
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union up to December 31, 2024.
The Group has not early adopted any new IFRS requirements that were not yet effective in 2024. Further information is provided in note 51 \u2018New standards and interpretations issued but not yet effective\u2019.
The Board of Directors has concluded to continue applying accounting principles in the assumption of going concern. In this respect, further information is provided under 4.1 \u2018Liquidity situation and going concern\u2019.
The consolidated financial statements were authorized for issue by the Board of Directors on March 11, 2025.
49. BASIS OF MEASUREMENT
The consolidated financial statements have been prepared on the historical cost basis except for the following items in the statement of financial position:
derivative financial instruments are measured at fair value;
non-derivative financial instruments at fair value through profit or loss (FVTPL) are measured at fair value;
debt and equity instruments at FVOCI are measured at fair value;
contingent consideration assumed in a business combination is measured at fair value;
liabilities for cash-settled shared-based payments arrangements are measured at fair value;
plan assets attributable to the Company\u2019s defined benefit retirement plans and other post-employment benefit plans are measured at fair value;
DBO attributable to defined benefit plans are measured using the projected unit credit method.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__6-1": { "value": "1. REPORTING ENTITY
Agfa-Gevaert NV (\u2018the Company\u2019) is a company established in BelgiumThe address of the Company\u2019s registered office is Septestraat 27, 2640 Mortsel
The 2024 consolidated financial statements of the Group include the Company and 66consolidated subsidiaries (2023: 71 consolidated subsidiaries) controlled by the Company. Investments in subsidiaries are listed in note 42.
In Europethere are a few subsidiaries in which non-controlling interests have an interest that is of minor importance to the Group.
A company classifies a liability as non-current if it has a right to defer settlement for at least twelve months after the reporting period. The amendments clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. They clarify that classification is unaffected by expecta-tions about whether an entity will exercise its right to defer settlement of a liability. The IASB issued an amendment clarifying that only covenants of a liability arising from a loan arrangement, which an entity must comply with on or before the reporting date affect the classification of that liability as current or non-current. The amendments do not require an entity to present separately non-current liabilities for which the entity\u2019s right to defer settlement is subject to compliance with future covenants within twelve months. The amendments require entities to disclose information about such covenants and related liabilities in the notes.
Agfa-Gevaert NV has a three-year multi-currency revolving credit facility of 230 million euro at its discretion. This facility is unsecured, runs until May 2026 and will be used for general corporate purposes. Drawdowns under this facility are subject to predefined covenants agreed with the financial institution, i.e. a leverage ratio of net financial debt over EBITDAand an interest cover of EBITDAover the interest expense which should not exceed certain tresh-olds. These covenants are tested twice a year. As per December 31, 2024, these covenants are met.
Drawdowns under this loan facility are made for short periods. Based on the fact that the entity has the right to roll over the drawdown under the existing loan facility and thus defer the settlement, the Group has classified this liabil-ity as long-term.
The other standards (amendments) were either not applicable or did not have a material impact to the Group\u2019s finan-cial statements.
6. ALTERNATIVE PERFORMANCE MEASURE
Alternative performance measures (APMs) are used in the financial communication of the Group since management believes that these alternative performance measures are widely used by certain investors, securities analysts, and other interested parties as supplemental measure of performance.
Management has presented the performance measures \u2018Adjusted EBIT\u2019 and \u2018Adjusted EBITDA\u2019 because it monitors these performance measures by division and believes that these measures are relevant to an understanding of the financial performance of the Group\u2019s operating segments. Other APMs measuring the financial performance and financial position of the Group and frequently used in external communications involve Free cash flowand Adjusted free cash flow, Working Capitaland Net Financial Debt incl. IFRS 16 and excl. pension debt, Net Financial Debt excl. IFRS 16 and excl. pension debt andNet Debt.
The alternative performance measures used in financial communication of the Group may not be comparable to similarly titled measures of other companies and should be analyzed together with IFRS data. Therefore, each of these APMs are defined and reconciled with IFRS information in sections 6.1 until 6.5.
6.1 Adjusted EBIT
Adjusted EBIT: The result from continuing operating activities before restructuring expensesand adjustments.
Restructuring expenses: Expenses related to detailed and formal restructuring plans approved by management. Related expenses comprise expenses recognized when accounting for a \u2018Provision for restructuring\u2019 but could also comprise other expenses that are directly linked to a formal restructuring plan (e.g. exceptional write-downs on inventories and impairment losses on receivables when specifically linked to/resulting from a decision to restruc-ture). Restructuring expensesmainly relate to employee termination costs.
Adjustments: Income and expenses related to activities or events which are not indicative as arising from normal, recurring business operations and are not related to a restructuring plan. These adjustmentscomprise expenses related to important transformation programs, material changes in the measurement estimates of assets or liabilities related to infrequent events (such as the sale of a building), material gains or losses related to infrequent events or transactions (e.g. mergers and acquisitions) as well as substantial litigations which are not part of the normal recur-ring business activities. In case the activities or events are not directly linked to a specific segment but are related to Agfa as a Group, the costs are not attributed to the reportable segments.
The following table reconciles Adjusted EBITwith 'Results from operating activities' as presented in the consolidated statement of profit or loss.
Reconciliation of Adjusted EBITto results from operating activities | 2023 | 2024 |
Adjusted EBIT | 31 | 27 |
Restructuring | (9) | (38) |
Adjustments | (30) | (37) |
Results from operating activities | (8) | (48) |
At year end 2024, restructuring expensesamounted to 38 million euro and mainly relate to:
the reorganization of the manufacturing plant in Belgium (32 million euro) and
the closure of the Schrobenhausen site in Germany (5 million euro).
More detail on these restructuring expensesis provided in note 9.2.
At year end 2023, restructuring expensesamounted to 9 million euro and mainly relate to employee termination costs of which:
4 million euro related to HealthCare IT (2 million euro in NAFTA and 2 million euro in Belgium)
3 million euro related to Digital Print and Chemicals (of which 2 million euro in Belgium and 1 million euro in other European countries)
2 million euro related to Radiology Solutions (1 million euro in Belgium and 1 million euro in other countries, mainly in China)
At year end 2024, adjustmentsamount to 37 million euro and mainly comprise:
impairment losses on Property, plant and equipment (18 million euro) related to Radiology Solutions
impairment losses on Property, plant and equipment (2 million euro) due to decommissioning of certain assets related to Radiology Solutions
impairment losses on Right-of-use assets (4 million euro) related to Radiology Solutions
strategic transformation projects related costs of 10 million euro (changing the organizational structure into a lean, agile and future-oriented structure: 6 million euro relating to the ICS transformation in Belgium and 4 million euro consultancy costs)
a provision for a litigation on indirect taxes (2 million euro)
S4hana project costs in North America (1 million euro)
a discounted impact on the receivables in Brazil related to indirect taxes (1 million euro)
lawyer costs (1 million euro related to AgfaPhoto and to an Intellectual Property litigation in Digital Print and Chemicals)
income due to reversal of provision for soil remediation, amounting to 1 million euro
settlement gain of obligation against silver recovery company (1 million euro)
a net gain related to housing mainly driven by the sale of a warehouse in Spain (1 million euro)
At year-end 2023, adjustmentsamount to 30 million euro and mainly comprise:
strategic transformation projects related costs of 17 million euro (changing the organizational structure into a lean, agile and future-oriented structure)
impairment losses on Property, plant and equipment of 2 million euro (Radiology Solutions)
impairment losses of 3 million euro on Right-of-use assets related to empty space in Munich
lawyer expenses of 6 million euro
an exceptional write-down of inventories of 1 million euro; and
preservation site costs as well as unrecoverable balance sheet amounts of 1 million euro.
6.2 Adjusted EBITDA
Adjusted EBITDA: The result from continuing operating activities before depreciation, amortization, restructuring expensesand adjustments.
Reconciliation of adjusted EBITto adjusted EBITDA | 2023 | 2024 |
Adjusted EBIT | 31 | 27 |
Depreciation and amortization on intangible assets and PP and E | 26 | 26 |
Depreciation right-of-use assets (IFRS 16 impact) | 19 | 16 |
Adjusted EBITDA | 76 | 70 |
6.3 Free Cash Flowand Adjusted Free Cash Flow
Free Cash Flow: The sum of \u2018Net cash from/(used in) operating activities\u2019 and \u2018Net cash from/(used in) investing activities excluding the impact of \u2018Acquisitions of subsidiaries, net of cash acquired\u2019, \u2018Interests received\u2019 and the \u2018Net cash from/(used in) operating and investing activities that relates to discontinued operations\u2019.
Adjusted Free Cash Flow:Free Cash FlowAdjusted excluded for the impact of the \u2018Cash out for pensions below EBIT\u2019, the \u2018Cash out for long-term termination benefits\u2019 and the cash out for \u2018Adjustmentsand restructuring expenses\u2019.
Cash out for pensions below EBIT: The sum of Expenses for defined benefit plans and long-term termination benefits (see \u2018Consolidated Statement of Cash Flows\u2019) and the cash out for defined benefit plans and long-term termination bene-fits that are part of the \u2018Cash out for employee benefits\u2019 as presented in the Consolidated Statement of Cash Flows.
Adjustments and restructuring related cash in- and outflows: Cash in- and outflows resulting from income and expenses that are either in the current or previous reporting periods recognized in \u2018Adjustments\u2019 or \u2018Restructuring expenses\u2019.
The following table summarizes the components of (Adjusted) Free Cash Flowwith net increase (decrease) in cash and cash equivalents as presented in the consolidated statement of cash flows.
Reconciliation(Adjusted) Free Cash Flow | 2023 | 2024 |
Adjusted EBITDA | 76 | 70 |
Working capital-net | 21 | (18) |
Capex | (33) | (45) |
Provisions and other | (12) | 16 |
Income taxes | (1) | (4) |
Adjusted Free Cash Flow | 50 | 19 |
Pensions (below EBIT) and long term termination benefits | (47) | (44) |
Cashouts for adjustmentsand restructuring expenses\u00a0 | (51) | (21) |
Free Cash Flow | (48) | (46) |
Adjustmentsfor: | ||
Payment of finance leases | (21) | (21) |
Proceeds from borrowings | 40 | 85 |
Repayment of borrowings | - | (20) |
Acquisition of subsidiaries, net of cash acquired | 3 | - |
Acquisition of associates | (1) | (1) |
Interests received | 16 | 12 |
Interests paid | (13) | (16) |
Other financial flows | (4) | (6) |
Cash Flows from continued operations | (29) | (12) |
Net cash from/(used in) operating activities related to discontinued operations | (12) | (1) |
Net cash from/(used in) investing activities related to discontinued operations | (5) | 2 |
Net cash from/(used in) financing activities related to discontinued operations | (11) | - |
Cash Flows from discontinued operations | (28) | 1 |
Net increase (decrease) in cash and cash equivalent | (57) | (11) |
6.4 Working Capital
Working Capital: The sum of Inventories plus trade receivables plus contract assets minus contract liabilities and minus trade payables.
The following table summarizes the captions of the consolidated statement of financial position totaling working capital.
Working Capital | 2023 | 2024 |
Inventories | 289 | 293 |
Non-current trade receivables | 2 | 2 |
Current trade receivables | 175 | 178 |
Contract assets | 83 | 93 |
Non-current trade payables | (3) | (2) |
Current trade payables | (132) | (127) |
Contract liabilities | (97) | (102) |
Working Capital | 317 | 335 |
6.5 Net Financial Debt incl. IFRS 16 and Net Financial Debt excl. IFRS 16 and excluding pension debt
Net Financial Debt incl. IFRS 16 and excluding pension debt: The sum of non-current and current liabilities to banks including non-current and current lease liabilities and bank overdrafts minus cash and cash equivalents.
Net Financial Debt excl. IFRS 16 and excluding pension debt: The sum of non-current and current liabilities to banks excluding non-current and current lease liabilities, including bank overdrafts minus cash and cash equivalents.
The following table summarizes the components of Net Financial Debt incl. IFRS 16 and excluding pension debtand Net Financial Debt excl. IFRS 16 and excluding pension debt. These balances match with the consolidated financial statement of financial position.
Net Financial Debt including IFRS 16 and excluding pension debt | 2023 | 2024 |
Cash and cash equivalents\u00a0 | (77) | (68) |
Non-current loans and borrowings | 69 | 141 |
Current loans and borrowings | 14 | 15 |
Net Financial Debt including lease liabilities | 6 | 87 |
Net Financial Debt excluding IFRS 16 and excluding pension debt | 2023 | 2024 |
Cash and cash equivalents\u00a0 | (77) | (68) |
Non-current loans and borrowings | 69 | 141 |
Non-current lease liabilities comprised in non-current loans and borrowings | (29) | (36) |
Current loans and borrowings | 14 | 15 |
Current lease liabilities comprised in current loans and borrowings | (14) | (15) |
Net Financial Debt excluding lease liabilities | (37) | 37 |
The following table reconciles the net increase/decrease in cash and cash equivalents to the net cash in(out)flows.
MILLION EURO | 2023 | 2024 |
Net increase / (decrease) in cash and cash equivalents | (57) | (11) |
Proceeds from borrowings (-) | (40) | (85) |
Repayment of borrowing (+) | - | 20 |
Net cash in (out)flows | (96) | (76) |
More information on the different cash flows explaining the net cash consumption is provided in note 6.3.
The net financial debt increased in 2024 by 74 million euro from a net cash position of 37 million euro to a net debt position of 37 million euro. This 74 million euro is explained by a net cash outflow of 76 million euro and a currency impact of 2 million euro.
The net financial debt increased in 2023 by 97 million euro from a net cash position of 134 million euro to a net cash position of 37 million euro. This 97 million euro is explained by a net cash outflow of 96 million euro and a currency impact of 1 million euro.
The following table shows a reconciliation from the opening balances to the closing balances for the Net Financial
Debt excl. IFRS 16 and excluding pension debt.
MILLION EURO | 2023 | 2024 |
Net financial debt (cash) (excl IFRS16 and excl. Pension debt) - January, 1 | (134) | (37) |
Cashflows | (96) | (76) |
Currency impact | (1) | 2 |
Net financial debt (cash) (excl IFRS16 and excl. Pension debt) - December, 31 | (37) | 37 |
6.6 Net debt
Net debt:the sum of Net financial debt incl IFRS 16 and the liabilities for post-employment and long-term termina-tion benefit plans - net balance sheet position.
Net debtcould be summarized as follows
MILLION EURO | 2023 | 2024 |
Net Financial Debt (excl IFRS 16 and excl. pension debt) | (37) | 37 |
Lease liabilities | 43 | 50 |
Liabilitites (assets) for post-employment and long-term termination benefit plans - net balance sheet position | 457 | 405 |
Net Debt | 463 | 492 |
PERFORMANCE OF THE YEAR
The Agfa-Gevaert Group posted strong Q4 revenue, profitability and free cash flowgrowth, with record performances of its growth engines. The strong year-end resulted in significant full year revenue growth and a strong profitabil-ity step up in Digital Printing Solutions, Green Hydrogen Solutions and Direct Radiography, as well as a significant increase in order intakein HealthCare IT, with a high share of cloud-based and net new customer contracts. This was counterbalanced by an accelerated market decline for the traditional film activities. The savings program to align the costs base to the evolution of the traditional film markets is on track.
In 2024, there was an acceleration of the impact of the successful strategies for the growth engines. HealthCare IT, Digital Printing Solutions and Green Hydrogen Solutions all recorded record-high EBITDAfigures in the fourth quarter of 2024 and delivered good full year results. Over the past three years, Agfa has been rebuilding the strategic foundations of its HealthCare IT division, transforming it into a strong player in the cloud segment of its market. As a result, a record-high order intakefor this business was recorded in 2024. The three major KLAS Awards that Agfa recently won, demonstrate the dedication to advancing Enterprise Imaging and delivering innovative solutions that empower healthcare providers. Driven by major strategic decisions and successful product launches, Agfa reaches critical mass with its Digital Printing Solutions. In 2024, a double-digit revenue growth was posted and a doubling of the profit for this business. In a few years\u2019 time, we turned our Green Hydrogen Solutions business from an R and D project into a successful start-up structure, with continuous strong sales growth. The ZIRFON membranes are the standard in the industry, used for the largest hydrogen projects in the world. Recently, an agreement was reached with our social partners in Belgium on our plan to adjust the cost base of our traditional film activities to the reality in the market. This self-funding program will allow Agfa to reduce the cost base of these activities by 50 million euro by the end of 2027. The first savings will start to materialize in the second half of 2025.
Mainly based on cloud-related contracts with high-profile new customers, HealthCare IT recorded a record 32% increase in the 12 months rolling order intakestarting from 124.6 million euro the year before to 164.8 million euro. 27% of total 2024 full year order intakeis cloud-related. Net new customers represent 33% of total order intake. 66% of total order intakeis related to project contracts and 34% to recurring revenue contracts. The division\u2019s top line decreased by 3.0% versus 2023 due to the market transition to cloud technology. Mainly due to the increased service contribution and a higher contribution of own IP software in total sales, HealthCare IT\u2019s gross profit margin improved from 46.5% in 2023 to 48.8%, which is an all-time high full-year percentage for this division. The adjusted EBITDA margin evolved from 12.5% to 13.6%, with a strong performance in the fourth quarter of the year.
The Digital Printing Solutions business posted record top line and EBITDAresults in 2024. The business saw a gradual quarter-on-quarter acceleration of top line growth versus the previous year, resulting in a full year growth by 13%. This clearly shows the success of the growth strategy for these activities. Agfa expects to build further momentum with its digital printing portfolio in 2025, based on recent product launches and on the global strategic partnership between Agfa and EFI for digital printing equipment. Ink top line grew by 15%, also driven by the success of the ongoing program to convert former Inca customers to Agfa\u2019s ink sets.
Agfa continued to expand and enhance its industry-leading digital printing equipment portfolio. In 2025, at least four major product launches are planned. There have been a number of successful product launches in 2024.
Sales of the ZIRFON membranes for renewable-powered green hydrogen production grew by 27% versus 2023.
Overall market momentum is improving with increasing interest in alkaline water electrolysis projects for green hydrogen; important investments expected to be launched in Europe on the back of reinforced or continued support mechanisms (IPCEI, Hydrogen Bank, H2Global) and further implementation of EU legislation. Agfa continued to expand its customer base based on the rising interest in Asia, resulting in a first major customer in India.
The establishment of a new industrial-scale ZIRFON production plant in Mortsel, Belgium is on track. In September 2024, a new ZIRFON lab was taken into operation in Mortsel. A renewed collaboration agreement with VITO, a global research and service center, to pioneer a new generation of gas separator membranes for alkaline water electrolyzers, was achieved.
Volumes of Agfa\u2019s medical film business followed the declining market trends. Profitability in this business was impacted by the volume decrease and costs related to manufacturing inefficiencies. This was partly offset by meas-ures to control costs and to streamline the business. The gross profit margin decreased from 31.4% of revenue in 2023 to 27.8%. The adjusted EBITDAmargin decreased from 8.8% of revenue in 2023 to 4.1%. The program to tackle the challenges in the film business is on track. It is expected to deliver its first results as from the second half of 2025.
Driven by a particularly strong fourth quarter, profitability improved in DR and Computed Radiography (CR).
Agfa\u2019s Direct Radiography (DR) business posted 8% top line increase in 2024, thus growing stronger than the market. In Europe, consolidation exercises in healthcare groups are leading to postponed investment plans, while a further trend toward big tenders is increasing the fluctuations between quarters. Profitability for this business improved year-over-year, as well as quarter-over-quarter.
As part of its plans to review the footprint of its Computed Radiography (CR) production facilities, Agfa came to an agreement with the social partners to stop the production and assembly of CR plates and cassettes at its Schroben-hausen site in Germany, resulting in the closure of this facility.
OUTLOOK 2025
The Agfa-Gevaert Group expects that the growth engines will continue to perform strongly in 2025. As usual, due to seasonality reasons, a slower start of the year is expected, followed by a stronger second half. This outlook is based on the current economic environment.
HealthCare IT: The good momentum is expected to continue. Taking into account the ongoing transition to cloud technology, the division\u2019s performance is expected to be roughly in line with that of last year.
Digital Print and Chemicals: The division expects continued significant growth in top line and profitability, driven by Digital Printing Solutions and Green Hydrogen Solutions.
Radiology Solutions: A stable performance is expected, with continued progress in Direct Radiography and con-tinued pressure on the medical film business.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralInformationAboutFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__7": { "value": "1. REPORTING ENTITY
Agfa-Gevaert NV (\u2018the Company\u2019) is a company established in BelgiumThe address of the Company\u2019s registered office is Septestraat 27, 2640 Mortsel
The 2024 consolidated financial statements of the Group include the Company and 66consolidated subsidiaries (2023: 71 consolidated subsidiaries) controlled by the Company. Investments in subsidiaries are listed in note 42.
In Europethere are a few subsidiaries in which non-controlling interests have an interest that is of minor importance to the Group.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCompositionOfGroupExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__8": { "value": "Agfa-Gevaert ", "dimensions": { "concept": "ifrs-full:NameOfReportingEntityOrOtherMeansOfIdentification", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__9": { "value": "Agfa-Gevaert ", "dimensions": { "concept": "ifrs-full:NameOfParentEntity", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__10": { "value": "NV ", "dimensions": { "concept": "ifrs-full:LegalFormOfEntity", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__11": { "value": "Belgium", "dimensions": { "concept": "ifrs-full:CountryOfIncorporation", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__12": { "value": "Belgium", "dimensions": { "concept": "ifrs-full:DomicileOfEntity", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__13": { "value": "Septestraat 27, 2640 Mortsel", "dimensions": { "concept": "ifrs-full:AddressOfRegisteredOfficeOfEntity", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__14": { "value": "Europe", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__17": { "value": "2. BASIS OF ACCOUNTING
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union up to December 31, 2024.
The Group has not early adopted any new IFRS requirements that were not yet effective in 2024. Further information is provided in note 51 \u2018New standards and interpretations issued but not yet effective\u2019.
The Board of Directors has concluded to continue applying accounting principles in the assumption of going concern. In this respect, further information is provided under 4.1 \u2018Liquidity situation and going concern\u2019.
The consolidated financial statements were authorized for issue by the Board of Directors on March 11, 2025.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__15": { "value": "The consolidated financial statements were authorized for issue by the Board of Directors on March 11, 2025.", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__18-1": { "value": "3. FUNCTIONAL AND PRESENTATION CURRENCY
The consolidated financial statements are presented in euro, which is the Company\u2019s functional currency. All finan-cial information presented in euro has been rounded to the nearest million, except when otherwise indicated. By using rounded numbers, the sum of line items presented in a table may not always match with (sub)totals as this total has been rounded to the nearest million and is not the sum of rounded data.
Employee benefit liabilities
MILLION EURO | December 31, 2023 | December 31, 2024 |
Assets related to post-employment benefits | 29 | 54 |
Liabilities for post-employment benefits | 486 | 459 |
Other non-current employee benefits | 5 | 5 |
Current employee benefit liabilities | 73 | 74 |
Total employee benefit liabilities | 565 | 538 |
13. POST-EMPLOYMENT BENEFIT PLANS
The Group provides retirement benefits in most countries in which it operates, mainly through defined contribution plans. In some countries, however, the Group organizes its retirement benefits via defined benefit plans. The net defined benefit liability for Belgium, Germany, UK and USA together (within Agfa in this context also referred to as \u2018material countries\u2019) represent 99% (2023: 99%) of the total net defined benefit liability of the Group. A major part of these liabilities relates to closed pension plans, meaning that no further benefits are accrued under these plans. This is the case in the UK, the USA and for a major part of the German pension plans. In Belgium, the major pension plan \u2013 referred to as \u2018Fabriekspensioenplan\u2019 \u2013 has been closed to new managers entering as from January 2019.
The following table summarizes the impact of the Group\u2019s post-employment benefit plans on its consolidated state-ments of financial position, broken down into material countries and other countries.
MILLION EURO | ||||||
December 31, 2023 | December 31, 2024 | |||||
Retirement plans (excl. Belgian DC-plans) | ||||||
Belgian DC-plans with return guaranteed by law | TOTAL | Retirement plans (excl. Belgian DC-plans) | ||||
Belgian DC-plans with return guaranteed by law | TOTAL | |||||
Liabilities for post-employment benefits | 473\u00a0 | 7\u00a0 | 480\u00a0 | 447\u00a0 | 7\u00a0 | 454\u00a0 |
Belgium/Germany/UK/USA | 469\u00a0 | 7\u00a0 | 476\u00a0 | 442\u00a0 | 7\u00a0 | 449\u00a0 |
Other countries | 4\u00a0 | -\u00a0 | 4\u00a0 | 5\u00a0 | -\u00a0 | 5\u00a0 |
Assets related to post-employment benefits | (29)\u00a0 | -\u00a0 | (29)\u00a0 | (54)\u00a0 | -\u00a0 | (54)\u00a0 |
Belgium/Germany/UK/USA | (29)\u00a0 | -\u00a0 | (29)\u00a0 | (54)\u00a0 | -\u00a0 | (54)\u00a0 |
Other countries | -\u00a0 | -\u00a0 | -\u00a0 | -\u00a0 | -\u00a0 | -\u00a0 |
Liabilities for post-employment benefits - net balance sheet position | 444\u00a0 | 7\u00a0 | 451\u00a0 | 393\u00a0 | 7\u00a0 | 400\u00a0 |
Belgium/Germany/UK/USA | 440\u00a0 | 7\u00a0 | 446\u00a0 | 388\u00a0 | 7\u00a0 | 396\u00a0 |
Other countries | 4\u00a0 | -\u00a0 | 4\u00a0 | 5\u00a0 | -\u00a0 | 5\u00a0 |
Liabilities for post-employment benefits | - | - | 480\u00a0 | - | - | 454\u00a0 |
Long-term termination benefits | - | - | 6\u00a0 | -\u00a0 | - | 4\u00a0 |
Liabilities for post-employment and long-term termination benefit plans | - | - | 486\u00a0 | - | - | 459\u00a0 |
Assets related to post-employment benefits total 54 million euro as of December 31, 2024 (2023: 29 million euro) and comprise a surplus in the \u2018Fabriekspensioenplan\u2019 amounting to 39 million euro (2023: 13 million euro) and a surplus attributable to the UK pension plan amounting to 15 million euro (2023: 16 million euro).
Management has assessed the possibility to recognize the surpluses on both plans.
Payment of any surplus out of the \u2018Fabriekspensioenplan\u2019 to the employer is not possible, however the rules of related pension plan do not exclude that future contributions would be reduced. The economic benefits available to Agfa in
the form of reduced contributions to fund the future benefits accrual and administrative costs of the plan exceed the IAS 19 surplus on December 31, 2024. Therefore, management has assessed that the full amount of 39 million euro surplus can be recognized.
The net surplus for the UK pension plan amounted to 15 million euro on December 31, 2024 (2023: 16 million euro). Agfa has received external legal advice in December 2021 that it can unconditionally claim the surplus upon both termination and liquidation of this plan. This confirms the recognition as an asset of the 15 million euro surplus of the UK pension plan.
Other explanations on the content and evolution of the pension liabilities for the Group\u2019s material countries are dis-closed in section 13.2.
13.1 DEFINED CONTRIBUTION PLANS
The Agfa-Gevaert Group companies\u2019 contributions to publicly or privately administered defined contribution pension funds or insurance contracts totaled 7 million euro in 2024 (7 million euro in 2023) of which 3 million euro relates to the Group\u2019s material countries (3 million euro in 2023). These figures reflect the Group\u2019s contributions for its continu-ing operations only.
Once the contributions have been paid, the Group companies have no further payment obligation. The regular contri-butions constitute an expense for the year in which they are due.
13.2 DEFINED BENEFIT PLANS
The Group\u2019s main defined benefit retirement plans are in Belgium, Germany, the UK and the USA.
The Group Pension Committee (reporting to the Group\u2019s Executive Committee) oversees the Group\u2019s retirement plans, including reviewing plan design, funding and investment strategies.
The different defined benefit plans expose the Group to actuarial risks, such as interest rate, inflation, investment and longevity risks. The Group has taken action in recent years to reduce and de-risk its defined benefit pension liabilities globally. This includes completing annuity buy-in contracts covering all the pensioner liabilities and most of the deferred member liabilities of its UK pension plan.
13.2.1 Characteristics of the plans per country
Belgium
The main pension plan in Belgium is the \u2018Fabriekspensioenplan\u2019.
The plan members are eligible for a pension benefit based on their service and final salary. As this funded pension plan remains open to future benefit accrual and (non-manager) new entrants, the plan exposes the Company to a salary increase risk, as well as interest rate risk, investment risk and longevity risk. Although the plan benefit formula is for an annuity pension on retirement, most participants choose to take their benefit as a single capital payment at retirement age.
The plan is financed through employer contributions to an Organization for Financing Pensions (OFP), the \u2018Pensioen-fonds Agfa-Gevaert OFP\u2019. The OFP has a Board of Directors who have ultimate responsibility for the management of the assets and liabilities of the \u2019Fabriekspensioenplan\u2019. The legal and regulatory framework for the \u2018Fabriekspensioen-plan\u2019 is based on the law of October 27, 2006 on the supervision of institutions for occupational retirement provision and the law on supplementary pensions (WAP), applicable as from January 1, 2004. In accordance with the applicable legislation, a funding valuation is prepared each year at January 1, which is used to determine the contributions to be
paid by the Group to the OFP each year. The contributions for 2025 are expected to be of the order of 10 million euro (14 million euro in 2024).
The Group also offers defined contribution (\u2018DC\u2019) plans to some employees in Belgium through group insurance contracts, including a plan where granted bonuses can be contributed to a pension plan. All but one of these plans are fully financed by employer contributions and provide a capital payment on retirement. In accordance with local leg-islative requirements, participants are entitled to a minimum guaranteed rate of return on the contributions paid into these plans. As insurance companies apply technical interest rates \u2013 i.e. agreed interest rates excluding profit-sharing \u2013 below the minimum return guaranteed by law, not all actuarial and investment risks relating to these insured plans are transferred to the insurance company managing the plans. These plans are therefore classified as defined benefit plans under IFRS.
Germany
In Germany, no legal or regulatory minimum funding requirements apply. The Group\u2019s German defined benefit plans are unfunded plans. The different defined retirement benefit plans expose the Group to actuarial risks such as inter-est rate risk, pension indexation risk and longevity risk.
The two main pension plans in Germany are:
Old pension plan: closed to new entrants from 2005 and closed to future benefit accrual as of December 31, 2009.
New pension plan: applies to new hires from 2005 onwards, and for former \u2018old pension plan\u2019 participants from 2010 who joined on enhanced terms.
Both pension plans comprise \u2018basic\u2019 and \u2018supplementary\u2019 plans.
Old pension plan\u2013 basic plan
The base pension of the \u2018old pension plan\u2019 including the indexation granted up until 2003 is provided through the \u2018Bayer Pensionskasse\u2019 and paid by the \u2018Bayer Pensionskasse\u2019 directly. The \u2018Bayer Pensionskasse\u2019 is a multi-employer plan under the control of Bayer AG. As the Group is unable to obtain sufficient information for defined benefit accounting from the \u2018Bayer Pensionskasse\u2019 and has no right to obtain the necessary data, this part of the basic plan is accounted for as a defined contribution plan.
As no further benefits accrue in the old pension plan and the \u2018Bayer Pensionskasse\u2019 is in surplus, the Group does not contribute to the \u2018Bayer Pensionskasse\u2019. The Group does not expect to pay any contributions to the \u2018Bayer Pensions-kasse\u2019 in 2025. In case of a deficit, this plan may expose the Group to investment and actuarial risk. The Group considers these risks insignificant.
The Group is responsible for the pension indexation granted on the base pension from 2004 onwards in accordance with Sec. 16, 1 and 2 of the German Pension Act (BetrAVG \u2013 Betriebsrentengesetz). These liabilities are unfunded and a defined benefit liability is disclosed in the Group\u2019s accounts for this indexation.
New pension plan \u2013 basic plan
The new pension plan - basic plan is funded through employer and employee contributions to the \u2018Rheinische Pen-sionskasse\u2019. Once the contributions have been paid to the \u2018Rheinische Pensionskasse\u2019, in principle the group compa-nies have no further payment obligation. It is therefore accounted for as a defined contribution plan and included in the contribution amount in note 13.1.
Old pension plan and New pension plan - supplementary plans
The supplementary plans in the old and new pension plans are defined benefit plans. The benefits are based on a fixed percentage of pensionable salary above the SSC, which is converted into individual pension entitlements. In the new pension plan participants have the option at retirement to take their supplementary plan pension entitlements as capital payments instead of a monthly pension.
Other plans
The defined benefit liabilities in Germany also include deferred compensation pension plans and a number of small plans that are closed to future benefit accrual.
UK
The Agfa UK Group Pension Plan has been closed to future benefit accrual since 2010. The plan provides benefits based on final average pay and length of service. Retirement benefits accrued under the plan can be paid partly as a capital payment at retirement with the remainder paid in monthly payments.
The plan is managed by a board of Trustees. The Trustees have responsibility for obtaining valuations of the fund, administering benefit payments and investing the plan's assets. The Trustees delegate some of these functions to their professional advisers where appropriate.
The Plan is subject to the Statutory Funding Objective under the Pensions Act 2004. A valuation of the plan is carried out at least once every three years to determine whether the Statutory Funding Objective is met. As part of the process the Group must agree with the Trustees the contributions to be paid to meet the Statutory Funding Objective. The most recent actuarial valuation of the plan was carried out at March 31, 2021 and showed the plan to be in surplus on its Statutory Funding Objective, as did valuation updates prepared at March 31, 2022 and 2023. The next valuation is being prepared as of March 31, 2024 and is in progress. The Group does not expect to pay any contributions to the plan in 2025.
The plan\u2019s assets are predominantly annuity \u2018buy-in\u2019 contracts covering all the pensioner liabilities and most of the deferred member liabilities. Under these insurance contracts, the insurer pays the pension plan the amount of the benefit payments to the covered participants as they fall due, removing the interest rate, inflation, and longevity risks associated with these liabilities.
USA
The Agfa Corporation Pension Plan has been closed to future benefit accrual since 2009. The plan participants are eligible for a benefit for based on a final average pay formula. This frozen defined benefit plan exposes the Company to actuarial risks such as investment risk, interest rate risk and longevity risk.
The plan assets are held in a trust. The Board of Directors of Agfa Corporation, the plan sponsor, delegate investment decisions and oversight of the plan\u2019s assets to a local investment committee, the Benefits Plan Investment Commit-tee (BPIC). The BPIC members have a fiduciary duty to act solely in the best interests of the beneficiaries according to the trust agreement and US law. The legal and regulatory framework for the plan is based on the applicable US legislation, the Employee Retirement Income Security Act (ERISA). Based on this legislation, a funding valuation is prepared annually on January 1.
The plan sponsor and participating employers contribute such amounts as are deemed necessary on an actuarial basis to provide sufficient funds to meet the benefits to be paid to plan members. Minimum contributions are based on the requirements prescribed by the provisions of the Employee Retirement Income Security Act (ERISA) of 1974 and the Pension Protection Act of 2006 (PPA). The Group does not expect to pay any contributions to the plan in 2025.
13.2.2 Evolution net defined benefit liability and its components
The following three tables show a reconciliation from the opening balances to the closing balances for the net defined benefit liability and its components.
Evolution net defined benefit liability during 2023 and 2024
MILLION EURO | ||||||
2023 | 2024 | |||||
Retirement plans (excl. Belgian DC-plans) | ||||||
Belgian DC-plans with return guaranteed by law | TOTAL | Retirement plans (excl. Belgian DC-plans) | ||||
Belgian DC-plans with return guaranteed by law | TOTAL | |||||
Net liability at January 1 | 493 | 10 | 503 | 439 | 7 | 446 |
Defined benefit cost included in profit or loss | 32 | 9 | 41 | 21 | 10 | 31 |
Total remeasurements included in OCI | 15 | 1 | 15 | (21) | 2 | (19) |
Net transfer in/(out), including impact of business combinations and divestitures | (45) | (1) | (46) | - | - | - |
Cash flows | ||||||
Employer contributions | (17) | (11) | (28) | (15) | (12) | (27) |
Benefits paid directly by the Company | (38) | - | (38) | (36) | - | (36) |
Currency effects: charge (or credit) | (1) | - | (1) | - | - | - |
Net liability at December 31 | 439 | 7 | 446 | 388 | 7 | 396 |
The net transfer out in 2023 relates to the sale of the Offset Solutions business in April 2023.
Defined benefit costs for 2023 and 2024
MILLION EURO | ||||||
2023 | 2024 | |||||
Retirement plans (excl. Belgian DC-plans) | Belgian DC-plans | TOTAL | Retirement plans (excl. Belgian DC-plans) | Belgian DC-plans | TOTAL | |
Service cost | ||||||
Service cost, exclusive of employee contributions | 12 | 9 | 20 | 10 | 10 | 20 |
Past service cost | - | - | - | (4) | - | (4) |
(Gain) loss on settlements | - | - | - | - | - | - |
Total service cost | 12 | 9 | 20 | 6 | 10 | 16 |
Net interest cost | ||||||
Interest expense on DBO | 52 | 5 | 57 | 44 | 4 | 48 |
Interest (income) on plan assets | (34) | (5) | (39) | (30) | (4) | (34) |
Total net interest cost | 18 | - | 18 | 14 | - | 14 |
Administrative expenses | 2 | - | 3 | 1 | - | 1 |
DEFINED BENEFIT COST INCLUDED IN PROFIT OR LOSS | 32 | 9 | 41 | 21 | 10 | 31 |
Actuarial losses (gains) | ||||||
Experience losses (gains) on plan liabilities | (16) | (9) | (25) | (25) | 48 | 23 |
Demographic assumptions | (16) | (2) | (17) | (1) | 1 | - |
Financial assumptions | 57 | 5 | 62 | (25) | - | (25) |
Return on plan assets excl. Interest income | (14) | 7 | (7) | 30 | (47) | (17) |
Total remeasurements included in OCI | 12 | 1 | 12 | (21) | 2 | (19) |
TOTAL DEFINED BENEFIT COST RECOGNIZED IN PROFIT OR LOSS AND OCI | 44 | 10 | 53 | - | 12 | 12 |
The total defined benefit cost recognized in Profit or Loss and Other Comprehensive Income (OCI) for 2024 for the Group\u2019s material countries amounted to 12 million euro (2023: 53 million euro).
Of this amount, 31 million euro expense is reflected in the Group\u2019s Consolidated Statement of Profit or Loss over 2024 (2023: 41 million euro expense). The balance, being a credit of 19 million euro for 2024 (a cost of 12 million euro for 2023) is reflected in OCI under net amount of remeasurements of the net defined benefit liability. These remeasure-ments originate from experience gains on plan liabilities, changes in demographic and financial assumptions as well as from experience adjustmentson the fair value of assets.
Past service credit
A past service credit of 4 million euro disclosed in 2024. This is an estimate of the reduction in the retirement plan obligations in Belgium in connection with the headcount reduction plan announced by the Group in November 2024 that is expected to take effect in the next three years. IAS 19 requires companies to recognise the past service cost of a curtailment event such as this at the earlier of the date when the curtailment occurs, and the date the Company recognises the related restructuring costs or termination benefits. The Group has recognised these costs in 2024, see note 9.2 \u2018Other operating expenses\u2019 for further information. The reduction in the benefit obligation relates primarily to the Group\u2019s main pension plan in Belgium, the \u2018Fabriekspensioenplan\u2019.
Remeasurements: Actuarial gains/losses \u2013 Retirement plans (excluding Belgian DC-plans)
The experience gains on the plan liabilities in 2024 include the effects of changes in the membership of the plans over the year. For example, more employees leaving service than expected in Belgium, and more deaths of retirees reported in Germany over the year. In 2024, the experience gains also include the impact of a change in interpre-tation of the pension age assumption, principally affecting the \u2018Fabriekspensioenplan\u2019 in Belgium as part of a new actuary taking on the IAS 19 valuation in Belgium. The pension age assumption is \"65 or earliest subsidized age, increases to 66 in 2025 and 67 in 2030\" and is unchanged from last year. On December 31, 2023, the pension age was set equal to age 65 in the valuation for all participants who joined before 2025 (i.e. all participants). On December 31, 2024 a pension age of 66 or 67 is used in the valuation for younger participants. The actuary has also taken into account early retirement if this was possible based on the service with Agfa (for example, at age 63 after completing 42 years of service). The impact is estimated as a reduction in the defined benefit obligation of approximately 17.4 million euro.
The actuarial gains due to changes in financial assumptions, amounting to 25 million euro, are principally the result of increases in the discount rate assumptions over the year for the plans in the UK and the USA. Actuarial gains due to changed financial assumptions for the UK pension plan and the Agfa Corporation pension plan (USA) total 34 million Euro and are partially offset by actuarial losses (9 million Euro) for the pension plans in Belgium and Germany. Detailed information regarding the financial assumptions is shown under 13.2.3.
A large part of the negative return on plan assets (excluding interest income) relates to the reduction in the value placed on the annuity buy-in contracts that are part of the UK plan assets and cover the almost all of the UK plan liabilities. These contracts are qualifying insurance policies and in accordance with IAS 19.115, the fair value of these insurance policies is deemed to be the present value of the related obligations. The increase in the discount rate over the year, which reduced the value placed on the UK plan liabilities, therefore also reduces the value placed on the annuity buy-in contracts.
Remeasurements: Actuarial gains/losses \u2013 Belgian DC-plans
The Group\u2019s past practice has been to exclude the deferred vested rights within the defined contribution plans for former employees from the summary tables in this note on grounds of materiality. The liabilities for these former employees were fully covered by the insurance company, and as such there was no net liability and the risk of default by the insurance company was considered extremely low.
The defined benefit obligation (50 million euro) and corresponding asset value (50 million euro) for the deferred vested rights of former employees within the Group\u2019s two largest DC-plans in Belgium have been added to the summary tables on December 31, 2024. These increases defined benefit obligation and fair value of assets are treated as remeasurements included in OCI in 2024 and are the main source of the experience losses on the plan liabilities and the return on plan assets (excl. interest income) for the Belgian DC-plans in 2024.
Evolution defined benefit obligation, fair value of assets and funded status during 2023 and 2024
The defined benefit obligation, plan assets and funded status for the Group\u2019s material countries are shown below.
MILLION EURO | ||||||
2023 | 2024 | |||||
Retirement plans (excl. Belgian DC-plans) | ||||||
Belgian DC-plans with return guaranteed by law | TOTAL | Retirement plans (excl. Belgian DC-plans) | ||||
Belgian DC-plans with return guaranteed by law | TOTAL | |||||
Change in defined benefit obligation | ||||||
Defined benefit obligation at January 1 | 1,270 | 134 | 1,404 | 1,204 | 112 | 1,317 |
Service cost | ||||||
\u00a0Current service cost, exclusive of employee contributions | 12 | 9 | 20 | 10 | 10 | 20 |
\u00a0Past service cost | - | - | - | (4) | - | (4) |
\u00a0(Gain)/loss on settlements | - | - | - | - | - | - |
Interest expense | 52 | 5 | 57 | 44 | 4 | 48 |
Cash flows | ||||||
Benefit payments from plan assets | (57) | (10) | (67) | (50) | (13) | (63) |
Benefit payments direct from employer | (38) | (38) | (36) | (36) | ||
\u00a0Employee contributions | - | - | - | - | - | - |
\u00a0Premiums Paid | - | - | - | - | - | - |
Increase (decrease) due to transfers, including impact of business combinations and divestitures | (67) | (19) | (85) | - | - | - |
Remeasurements | ||||||
\u00a0Effect of changes in demographic assumptions | (16) | (2) | (17) | (1) | 1 | - |
\u00a0Effect of changes in financial assumptions | 57 | 5 | 62 | (25) | - | (25) |
\u00a0Effect of experience adjustments | (13) | (9) | (22) | (25) | 48 | 23 |
Currency effects: charge (or credit) | 4 | - | 4 | 19 | - | 19 |
Defined benefit obligation at December 31 | 1,204 | 112 | 1,317 | 1,136 | 162 | 1,299 |
Change in plan assets | ||||||
Fair value of assets at January 1 | 777 | 124 | 901 | 765 | 105 | 870 |
Interest income | 34 | 5 | 39 | 30 | 4 | 34 |
Employer contributions | 17 | 11 | 28 | 15 | 12 | 27 |
Employee contributions | - | - | - | - | - | - |
Benefit payments from plan assets | (57) | (10) | (67) | (50) | (13) | (63) |
Administrative expenses | (2) | - | (2) | (1) | - | (1) |
Premiums Paid | - | - | - | - | - | - |
Increase (decrease) due to transfers, including impact of business combinations and divestitures | (22) | (18) | (40) | - | - | - |
Return on plan assets (excluding interest income) | 14 | (7) | 7 | (30) | 47 | 17 |
Currency effects: (charge) or credit | 5 | - | 5 | 19 | - | 19 |
Fair value of assets at December 31 | 765 | 105 | 870 | 748 | 155 | 903 |
Funded status at December 31 | ||||||
Funded status | 439 | 7 | 446 | 388 | 7 | 396 |
Effect of asset ceiling/onerous liability | - | - | - | - | - | - |
Net liability (asset) at December 31 | 439 | 7 | 446 | 388 | 7 | 396 |
On December 31, 2024, the total defined benefit obligation for the Group\u2019s material countries, excluding defined contribution plans with return guaranteed by law, amounted to 1,136 million euro (1,204 million euro at December 31, 2023). Of this amount, 708 million euro (751 million euro on December 31, 2023) is related to wholly or partly funded plans and 428 million euro (453 million euro on December 31, 2023) is related to unfunded plans.
On December 31, 2024, the financing deficit for the Belgian defined contribution plans with guaranteed return amounted to 7 million euro (7 million euro on December 31, 2023). The net pension liability for these plans is calculated as the difference between the present value of the defined benefit obligation (DBO) amounting to 162 million euro (112 million euro on December 31, 2023) and the fair value of the plan assets amounting to 155 million euro (105 million euro on December 31, 2023). It should be noted that for the Belgian defined contribution plans, the deferred vested rights of former employees have been included in the summary tables for the first time on December 31, 2024, which increased the defined benefit obligation and the related fair value of assets by approxi-mately 50 million euro each.
13.2.3 Defined benefit obligation - Principal actuarial assumptions at the reporting date
Provisions for pension plans and other post-employment benefits are measured annually at the reporting date using actuarial techniques. The net liability in the statement of financial position at the reporting date for the Group\u2019s mate-rial countries is:
MILLION EURO | December 31, 2024 | ||||
Belgium - DB | Belgium - DC | Germany | UK | USA | |
Defined benefit obigation (DBO) | (340) | (162) | (417) | (305) | (74) |
Fair value of plan assets | 369 | 154 | - | 320 | 59 |
Net (liability)/asset | 29 | (8) | (417) | 15 | (15) |
The assumptions for determining the obligations for the plans differ according to the individual conditions in the countries concerned. The principal assumptions used at the end of the 2023 and 2024 reporting periods were:
December 31, 2023 | December 31, 2024 | |||||||
Financial assumptions | Belgium | Germany | UK | USA | Belgium | Germany | UK | USA |
Discount rate | 3.45% | 3.45% | 4.45% | 4.75% | 3.35% | 3.35% | 5.40% | 5.45% |
Price inflation1 | 2.10% | 2.10% | 3.05% | n/a | 2.00% | 2.00% | 3.15% | n/a |
Salary growth | 3.99% | 2.71% | n/a | n/a | 3.90% | 2.78% | n/a | n/a |
Pension indexation2 | 0.00% | 1.00% | 3.50% | n/a | 0.00% | 1.00% | 3.55% | n/a |
1 UK: Retail Price Inflation (RPI) assumption. | ||||||||
2 UK: Rate shown is for annual pension increases in line with inflation with a maximum increase of 5% and minimum increase of 3% each year | ||||||||
Mortality | December 31, 2023 | December 31, 2024 | ||||||
Belgium | MR/FR with age rating of -1 / -5 / -7 by year of birth | MR/FR with age rating of -1 / -5 / -7 by year of birth | ||||||
Germany | Heubeck Richttafel 2018 G | Heubeck Richttafel 2018 G | ||||||
UK | 2021 Vita tables using year of birth with CMI 2022 model | 2021 Vita tables using year of birth with CMI 2023 model | ||||||
USA | PRI-2012 tables and scale MP-2021 generational mortality | PRI-2012 tables and scale MP-2021 generational mortality |
The discount rates used are determined by reference to the rates available on high-quality corporate bonds, that have a credit rating of at least AA from a main rating agency, that have maturity dates approximating the terms of the Group\u2019s obligations.
Sensitivity analysis
The table below illustrates the effect on the Defined Benefit Obligation (DBO) of a reasonable change in key assump-tions on December 31, 2024 for the retirement plans in the Group\u2019s material countries. The sensitivity analysis consid-ers the change in one assumption at a time, leaving the other assumptions unchanged from the original calculation, i.e. possible correlation effects between the individual assumptions are not taken into account.
MILLION EURO | ||||||
Assumption | Change in actuarial assumption | Belgium | Germany | UK | USA | Total |
Discount rate | Reduction by 0.5 percentage points | 21 | 21 | 17 | 5 | 63 |
Increase by 0.5 percentage points | (18) | (19) | (16) | (3) | (57) | |
Price inflation(1) | Increase by 0.25 percentage points | 5 | 5 | 5 | - | 14 |
Reduction by 0.25 percentage points | (4) | (5) | (5) | - | (14) | |
Life expectancy | Increase by one year | 3 | 20 | 13 | 2 | 37 |
Reduction by one year | (1) | (17) | (13) | (2) | (34) | |
(1) The effect on the DBO of the change in the price inflation assumption includes the effect of the price inflation change on inflation-linked assump-tions (e.g. salary growth, pension indexation) where relevant. |
It is to be noted that, for the UK pension plan, a change in the defined benefit obligation due to changes in assump-tions sees a corresponding change in the value of plan assets. Therefore, the net pension liability for the UK pension plan \u2013 to the extent related to obligations covered by \u2018buy-in\u2019-policies \u2013 is not sensitive to changes in assumptions.
Since pension plans in Germany are unfunded and therefore are direct obligations of the employer to the beneficiar-ies of the plans, the net pension liability for Germany is most sensitive to changes in assumptions.
For the funded plans in USA, Belgium and the small portion of pension liabilities of the Agfa UK Pension Plan that are financed through a separate pension fund, the asset allocation seeks a proper matching between plan assets and corresponding Defined Benefit Obligations. Further information on Asset and Liability Management studies and resulting strategic decisions on asset allocations is disclosed under 13.2.4.
13.2.4 Plan assets
Fair value of assets, split by major asset class
For the Group\u2019s material countries, plan assets comprise following major asset classes:
MILLION EURO | December 31, 2023 | December 31, 2024 |
Cash, cash equivalents and other | 21 | 20 |
Equity instruments | 105 | 113 |
Debt instruments | 301 | 306 |
Investment funds | 9 | - |
Assets held by insurance company | 435 | 463 |
TOTAL | 870 | 903 |
The assets held by insurance companies relate principally to the Belgian DC-plans with returns guaranteed by law and to the annuity buy-in contracts held by the UK plan. The buy-in policies held by the UK plan cover the liabilities of all pensioner members and substantially all deferred members (295 million euro on December 31, 2024).
For the equity and debt instruments the Group applies a passive or semi-passive management (index tracking) approach.
On December 31, 2024 the plan assets did not include any financial instruments of the Company or its subsidiaries (2023: zero). Neither did they include any properties or other assets used by the Company or its subsidiaries.
Strategic asset allocations
For the Group\u2019s main plans in Belgium and USA and uninsured pension liabilities in UK that are financed through a separate pension fund, the Group Pension Committee has established a target strategic asset allocation with the goal to limit investment risks and ensure a proper matching with the Group\u2019s pension obligations.
The Group Pension Committee determines a target strategic asset allocation with a certain tolerance range around it for the Group in function of the investment risk and expected return acceptable to the Group. Each of the pension funds determines its own strategic asset allocation based on a periodic Asset and Liability Management study (ALM) and in consultation with the Group so that the Group's strategic asset allocation is within the desired range.
Following table summarizes the target strategic asset allocations per December 31, 2024 as agreed by the Group\u2019s pension funds of its main countries:
As per December 31, 2024 | Target allocation | ||
Belgium | UK(1) | USA | |
Equities | 30% | 35% | 13.5% |
Bonds | 70% | 65% | 86.5% |
(1) UK (assets excl. buy-in assets) |
The US pension fund has implemented an investment approach where a large portion of the asset portfolio (86.5%) is matching the evolution and cash-flow profile of the liabilities (via fixed income investments) and a smaller portion of the portfolio (13.5%) is invested in return seeking assets (equities). The goal of this approach is to make sure that the pension fund has the income-generating assets it needs to satisfy its financial obligations (i.e. payouts to plan partic-ipants), while realizing a return which is slightly improved by the return seeking assets. As a result of this investment strategy, the changes in liabilities over the period are largely offset by the changes in assets, resulting in stable but slightly decreasing net liability over time.
13.2.5 Duration of retirement obligations and expected timing of benefit payments
The weighted average duration of the retirement obligations in the Group\u2019s material countries is:
Weighted average duration (years) | Belgium | Germany | UK | USA |
At December 31, 2024 | 8 | 10 | 11 | 12 |
The expected timing of the undiscounted benefit payments under the retirement plans for the next 10 years for the Group\u2019s material countries are:
MILLION EURO | Belgium | Germany | UK | USA | Total |
2025 | 21 | 37 | 19 | 4 | 81 |
2026 | 26 | 36 | 19 | 4 | 85 |
2027 | 35 | 34 | 20 | 5 | 94 |
2028 | 50 | 33 | 21 | 5 | 109 |
2029 | 59 | 32 | 21 | 5 | 117 |
2030 to 2034 | 218 | 137 | 118 | 27 | 500 |
The retirement plans in Germany are unfunded and the benefit payments are therefore direct payments from the employer to the beneficiary.
Except for two smaller unfunded plans (one in Belgium, and one in the USA), the benefit payments for Belgium, UK and USA are paid from plan assets.
13.2.6 Expected defined benefit costs and cash flows for 2025
For 2025, the Group expects for the defined benefit plans of its material countries a total defined benefit cost in profit or loss of 32 million euro, comprising of 19 million euro service cost (of which 10 million euro related to defined con-tribution plans in Belgium), 1 million euro administrative expenses and 12 million euro net interest costs.
During the 2025 fiscal year, the Group expects to contribute 11 million euro to its material funded retirement plans (compared to 15 million euro in 2024). This amount excludes the estimated contribution payments for the defined contribution plans in Belgium amounting to 12 million euro (2024: 12 million euro). Additionally, the Group expects to make direct benefit payments totalling 37 million euro to beneficiaries of its material unfunded retirement plans (compared to 36 million euro in 2024).
14. LONG-TERM TERMINATION BENEFITS
Long-term termination benefits result from the Group\u2019s commitment to either terminate the employment before the normal retirement date or provide termination benefits as a result of an offer made to encourage voluntary redun-dancy. At December 31, 2024, long-term termination benefits amounted to 4 million euro (6 million euro at December 31, 2023) and mainly relate to severance payments in connection with early retirement arrangements with employees of the Group\u2019s Belgian entities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__19": { "value": "4. USE OF ESTIMATES AND JUDGMENTS
The amounts included in the consolidated financial statements require estimates and judgments by management. These are continually re-evaluated considering experience and other factors such as expectations of future events that may reasonably be expected to occur. Actual amounts could possibly differ from these estimates. The areas involving a higher degree of judgment or complexity or areas where assumptions and estimates are significant in the consolidated financial statements are discussed below.
Liquidity situation and going concern
Net present value of estimated future cash flows used in impairment testing
Recoverability of deferred tax assets
Tax liabilities for current and expected tax audits
Actuarial assumptions used to measure defined benefit plans
4.1 LIQUIDITY SITUATION AND GOING CONCERN
The consolidated financial statements have been prepared on a going concern basis which assumes the realization of assets and the fulfillment of liabilities in the ordinary course of business.
The Company's Board of Directors has assessed the going concern status and the major uncertainty that relates to the refinancing on long-term basis of the Company.
In managing its liquidity, the Group currently has a revolving credit facility it can access to meet its liquidity needs. The notional amount of this credit facility amounts to 230 million euro of which 100 million euro is drawn per Decem-ber 2024 and matures in March 2026 and the financial institutions have extended the maturity to May 30, 2026 which covers a period of at least 12 months after the Annual General Meeting that will approve the financial statements for 2024. Management is currently in close discussion with the financial institutions for the refinancing of the credit facility. The Board of Directors is confident to reach an agreement with the financial institutions that is appropriate for the Company.
As part of the existing revolving credit facility, the Group is required to adhere to several financial covenants. The covenant tests, measured over the Group\u2019s continuing operations, consist of:
Leverage covenant: the leverage ratio of net financial debt over the last twelve months EBITDAis not to exceed 3
Interest coverage: the last twelve months EBITDAover net interest cost should be minimum 5
The Group has complied with all covenant requirements of the current revolving credit facility throughout the report-ing period. Below overview provides more information about the situation of the covenants as per June 30, 2024 and December 31, 2024.
MILLION EURO | 2024 | ||
June 30, 2024 | December 31, 2024 | ||
Net Financial Debt | [1] | 51 | 37 |
12 Month Rolling EBITDA | [2] | 54 | 52 |
12 Month Rolling Interest | [3] | 0 | -4 |
Covenants | |||
NFD/EBITDA\u00a0\u00a0 [1]/[2]\u00a0(Max 3) | 0.9 | 0.7 | |
EBITDA/Interest [2]/[3] (Min 5) | 285.6 | 12.3 | |
Note: | |||
Covenant testing done every half year | |||
Adjusted EBITDAonly continued operations |
The Board of Directors will closely monitor future compliance with these financial covenants. Based on the budget for 2025, these covenants are expected to continue to be met.
Management has prepared detailed budgets and cash flow forecasts for the next five years. Management acknowl-edges that uncertainty remains in these cash flow forecasts. Significant changes in the realization of business plans may affect the Company\u2019s level or timing of drawdown on its credit facility.
During 2024, the Company continued to consume operating cash and realized a free cash flowof -46 million euro (2023: -48 million euro) which resulted in a Net Financial Debt that has evolved from a net cash position of 37 million
[1] \"Net Financial Debt\" in the context of the calculation of the covenants means the Company's consolidated net financial indebtedness, i.e. liability line items \"Loans and borrowings\" (in both Current and Non-current liabilities) of the statement of financial position minus cash investments and liquid assets (i.e. asset line item \"Cash and cash equivalents\" of the statement of financial position), but excluding any lease liabilities.
[2] \"EBITDA\" in the context of the calculation of the covenants means, for each relevant period, the Company's consolidated profits before interest, tax, depreciation and amortization (i.e. line item \"Profit from operating activities\" (before taking into account restructuring charges and Adjustments(previously named non-recurring items) of the consolidated statement of profit or loss) plus line item \"Depreciation, amortization and impairment losses\" of the consolidated statement of cashflows), but after deducting any payment in respect of any lease.
[3] Interest means the interest income (expense) \u2013 net as presented in the profit and loss statement over a rolling period of 12 months.
euro (excl. lease liabilities) as per December 31, 2023 to a net debtposition of 37 million euro (excl. lease liabilities) as per December 31, 2024. A large part of the cash consumption in 2023 and 2024 is explained by restructuring programs and one-time events negatively impacting net cash flow, amounting to 51 million euro for 2023 and 21 million euro for 2024. For 2025, the Company expects continued profitability growth for Digital Print and Chemicals, driven by Digital Printing Solutions and Green Hydrogen Solutions. For HealthCare IT the profitability for 2025 is expected to be in line with 2024, mainly explained by the transition to cloud technology which has a short-term delaying effect on revenue recognition and related margins. For Radiology Solutions, measures are and will continue to be taken to adjust the cost base of its traditional film activities. The first savings of the restructuring plan announced in the fourth quarter of 2024 are expected to materialize in the second half of 2025.
Given the outlook for 2025 of the performance of the various divisions, the current committed facilities available to the Company and the expectation of reaching an agreement to refinance on a long-term basis beyond May 2026, the Company expects continuation of its current and future obligations and meet working capitalneeds. Therefore, the Board of Directors has concluded to continue applying accounting principles in the assumption of going concern.
Further information on the Group\u2019s credit facilities is provided in note 23 \u2018Liquidity risk\u2019.
4.2 NET PRESENT VALUE OF ESTIMATED FUTURE CASH FLOWS USED IN IMPAIRMENT TESTING
According to IAS 36 \u2018Impairment of assets\u2019, the Company assesses at the end of each reporting period whether there is any indication that an asset may be impaired. If any such indication exists, the Company estimates the recoverable amount of the asset.
Irrespective of whether there is any indication of impairment, the Company should test annually goodwill acquired in a business combination. Goodwill mainly relates to the CGU Agfa HealthCare IT (215 million euro) and to a lesser extent to the CGU Digital Print and Chemicals (2 million Euro).
In assessing whether there is an indication that an asset may be impaired, the Company considers as a minimum several indications from both external and internal sources of information. The carrying amount of the total net assets of the Group exceeding its market capitalization is one example of external sources of information that is considered in impairment testing. As per December 31, 2024, the market capitalization of Agfa-Gevaert amounts to 111.9 million euro (and reasonably consistent over the past year) whereas the total net assets of the Group amount to 326 million euro. This is a trigger for the Company to estimate the recoverability of the Group\u2019s net assets. The plan to restructure the manufacturing operations on the Belgian manufacturing site and the underperformance of certain businesses compared to budgets are internal sources of information used in assessing whether there is an indication that an asset or group of assets may be impaired.
Management prepares an assessment of the recoverable amount of the cash-generating units to which goodwill is attributed by discounting future cash flow projections to determine whether the assets of the cash-generating units are impaired at the reporting date as well as the level of impairment charge to be recognized. Future cash flow projec-tions are derived from formal five-year plans that are approved by the Board of Directors. These long-term business plans are also used as a basis for testing Intangible assets, Property, plant and equipment and Right-of-use assets that do not generate cash inflows that are largely independent of those from other assets, and consequently are to be tested on the level of the cash-generating unit to which they are attributed.
In its assessment of whether an impairment of goodwill or other non-current assets would be appropriate, a signifi-cant level of judgment is required by management which principally relates to the inputs used in both forecasting and discounting future cash flows to determine the recoverable amount of the different cash-generating units.
For HealthCare IT, the execution of the growth plan is an important driver in the recoverability assessment of its goodwill. The growth ambition reflected in the business plans is supported by a growing market and includes the
further transformation of Agfa HealthCare IT into a strong player in the cloud segment of its market.The revenue growth rate is therefore a key assumption in the calculation of the recoverable amount of the cash-generating unit HealthCare IT. Also, for Digital Print and Chemicals, the revenue growth rate is key in the calculation of the recovera-ble amount of related cash-generating unit.
In discounting the projected cashflows used in impairment testing, management uses a WACC based on a debt/equity ratio for an average market\u2019s participant increased with an additional risk premium to the cost of equity. The cost of debt is based on the conditions on which comparable companies can obtain long-term financing.
The impairment testing of goodwill demonstrates sufficient headroom when comparing the outcome of the value in use calculation (recoverable amount) of the cash-generating units HealthCare IT and Digital Print and Chemicals with their respective carrying amounts.
Having ascertained the extent of change in the assumptions used for impairment testing of goodwill attributable to the CGUs HealthCare IT and Digital Print and Chemicals that either individually or collectively would be required for the goodwill to be potentially impaired, management has currently assessed the likelihood of such movement in key assumptions as low.
For Radiology Solutions, there is considerable uncertainty about the future of the business and the ability to estimate future cash flows. Actual results in the past have been significantly lower than management's forecasts. In medical film, there is great uncertainty about the speed at which the market will continue to decline. Other important uncer-tainties in the plan relate to the timely and full realization of savings plans and the realization of the growth potential of Direct Radiography.
The calculation of the recoverable amount of the cash-generating unit Radiology Solutions has resulted in an enter-prise value below its carrying amount. This has resulted in an impairment loss of 22 million euro (18 million euro on Property, plant and equipment and 4 million euro on Right-of-use assets) on top of the impairment losses recognized due to decommissioning of certain assets, amounting to 2 million euro. More detailed information on the assets that have been impaired is provided in note 28.
Changing the assumptions selected by management, in particular discount rate and revenue growth rate assump-tions used in both forecasting and discounting future cash flows to determine the recoverable amount of the different cash-generating units, could significantly impact the Group\u2019s results.
4.3 RECOVERABILITY OF DEFERRED TAX ASSETS
The basis for assessing the recoverability of deferred tax assets is the five-year business plans of the business segments HealthCare IT and Digital Print and Chemicals. These long-term business plans are used as a basis for determining the profitability of the entities for which deferred tax assets have been recognized. In recent years, a valuation allowance has been posted for all deferred tax assets linked to the Radiology Solutions business.
The recoverability of deferred tax assets is thus closely linked to the realization of the business segments' long-term planning: significant changes to business plans and/or flows of goods and services may affect the taxable profits or losses of certain Group entities.
Moreover, the extent to which an entity is profitable is determined in part by the evolution of domestic and foreign tax laws.
In assessing future profitability, management makes an estimate of the timing of the reversal of temporary differences.
Management regularly reassesses the recoverability of the Group\u2019s deferred tax assets considering historical profita-bility, projected future taxable income, the expected timing of the reversals of existing temporary differences and tax planning strategies. If the Group continues to operate at a loss in certain jurisdictions or is unable to generate suffi-cient future taxable income, or if there is a material change in the actual effective tax rates or time horizon within which the underlying temporary differences become taxable or deductible, the Group could be required to reverse certain deferred tax assets resulting in a substantial increase in the Group\u2019s effective tax rate.
Further information on the extent and evolution of deferred tax assets is provided in note 17.
4.4 TAX LIABILITIES FOR CURRENT AND ANTICIPATED TAX AUDITS
The Group is subject to income taxes in numerous jurisdictions. Significant judgment is required in determining the Group\u2019s total income tax charge.
For identifying and monitoring tax risks, ongoing investigations and proceedings, the Group has various policies and guidelines relating to both direct and indirect taxes. As a result, the Group has a clear overview of the status of various risks and the progress of ongoing investigations and proceedings.
A dedicated team closely monitors its evolution, among other things with a view to determining an appropriate provi-sion. For material matters, the team is supported by external specialists.
The analysis distinguishes between transfer pricing risks, other tax risks, ongoing tax audits and ongoing tax litiga-tion. It goes without saying that the statutes of limitations of each jurisdiction are considered when identifying risks. The outcome of the analysis is quarterly reported to the CFO and once a year to the Audit Committee.
While the Group is confident that all its intra-group transactions are market compliant and documented, transfer prices are continuously subject to in-debt investigations by tax authorities worldwide. Some negotiations with tax authorities may lead to double taxation whereby the outcome of procedures may have a negative impact on the final tax cost. An estimate is made annually based on the results of the past five years. Such risks run over a long period of time.
With respect to ongoing tax audits, we note that the outcome is rarely straightforward and often leaves room for negotiation. Therefore, the assessment of the expected outcome of such audits is constantly adjusted depending on interim findings and subsequent discussions. The risks associated with an ongoing audit are more likely to be short- or medium-term (less than two years).
For ongoing tax legal proceedings, the situation depends on whether a disputed tax has been paid or not. In case of payment of a disputed tax, no further obligation can exist. A non-payment of a disputed tax is always supported by advice and/or opinion of an external specialist in the matter. Such proceedings often take several years (more than five years), depending on the jurisdiction.
4.5 ACTUARIAL ASSUMPTIONS USED TO MEASURE DEFINED BENEFIT PLANS
The liabilities and net periodic pension cost of the Group\u2019s defined benefit plans are determined using actuarial valuations that involve several actuarial assumptions, the most significant of which is the discount rate. Other key actuarial assumptions relate to price inflation and mortality tables. Given the size of the pension liabilities in relation to the Group\u2019s balance sheet total (29%), changes in actuarial assumptions and experience adjustmentscan have a significant effect on the Group's debt and equity position.
The discount rates used are determined by reference to the rates available on high-quality corporate bonds, that have a credit rating of at least AA from a main rating agency, that have maturity dates approximating the terms of the Group\u2019s obligation.
Changes in the present value of the defined benefit obligation resulting from changes in financial assumptions such as discount rates and inflation are part of the actuarial gains and losses recognized in Other Comprehensive Income.
The following information illustrates the sensitivity to a change as per December 31, 2024 in the Group\u2019s key actuarial assumptions for the defined benefit obligations of the Group\u2019s material countries (within the context of post-employ-ment benefit plans: Belgium, Germany, UK and USA).
MILLION EURO | ||
Assumption | Change in actuarial assumption | Amount |
Discount rate | Reduction by 0.5 percentage points | 63 |
Increase by 0.5 percentage points | (57) | |
Price inflation(1) | Increase by 0.25 percentage points | 14 |
Reduction by 0.25 percentage points | (14) | |
Life expectancy | Increase by one year | 37 |
Reduction by one year | (34) | |
(1) The effect on the DBO of the change in the price inflation assumption includes the effect of the price inflation change on inflation-linked assumptions (e.g. salary growth, pension indexations (e.g. salary growth, pension indexatin) where relevant. |
However, for the UK pension plan, a change in the defined benefit obligation due to changes in assumptions triggers a corresponding change in the value of plan assets. Therefore, the net pension liability for the UK pension plan \u2013 a surplus shown on the asset side of the statement of financial position \u2013 is not sensitive to changes in assumptions.
Since pension plans in Germany are unfunded and therefore are direct obligations of the employer to the beneficiar-ies of the plans, the net pension liability for Germany is most sensitive to changes in assumptions.
The effects of differences between the previous actuarial assumptions and what has occurred are called \u2018experience adjustments\u2019 and are part of the actuarial gains and losses recognized in Other Comprehensive Income. While the Group believes that the actuarial assumptions used are appropriate, significant differences in actual experience could materially impact the Group\u2019s retirement obligations.
Detailed information per country on the actuarial assumptions applied as of December 31, 2024, the extent and evolu-tion of post-employment benefit liabilities and sensitivity on changes in assumptions is provided in note 13.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__20": { "value": "5. CHANGES IN SIGNIFICANT ACCOUNTING POLICIES
Financial reporting standards applied for the first time in 2024
The consolidated statements of the Group as disclosed in this annual report take into account new standards applica-ble as from January 1, 2024. The Group did not early adopt standards issued but not yet effective.
Following new standards or amendments to IFRS are effective as from January 1, 2024. It relates to
Amendments to IFRS 16 Leases: Lease liability in a Sale and Leaseback(issued in September 2022)
Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as current or non-current(issued in January 2020)
Amendments to IAS 1 Non-current liabilities with covenants(issued in October 2022)
Amendments to IAS 7 Statement of Cash Flow and IFRS 7 Financial Instruments: disclosures \u2013 supplier financearrangement(issued in May 2023).
Climate change and connectivity between sustainability reporting and financial reporting
The International Sustainability Standards Board (ISSB) has published two IFRS Sustainability Disclosure Stand-ards; IFRS S1 General Requirements for disclosures of Sustainability-related financial information and IFRS S2
Climate-related disclosures (issued in June 2023) effective for annual periods starting on or after January 1, 2024. These standards provide a framework for companies to report on all relevant sustainability-related topics across the areas of governance, strategy, risk management, and metrics and targets.
The application of these standards did not have a material impact on the consolidated financial statements.
Amendments to IAS 1 Presentation of Financial Statements: Classification of liabilities as current or non-current; and Non-current liabilities with Covenants
The Group has adopted the amendments to IAS 1 related to the classification of liabilities as current or non-current as from January 1, 2024 and the amendments related to non-current liabilities with covenants.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__21": { "value": "A company classifies a liability as non-current if it has a right to defer settlement for at least twelve months after the reporting period. The amendments clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. They clarify that classification is unaffected by expecta-tions about whether an entity will exercise its right to defer settlement of a liability. The IASB issued an amendment clarifying that only covenants of a liability arising from a loan arrangement, which an entity must comply with on or before the reporting date affect the classification of that liability as current or non-current. The amendments do not require an entity to present separately non-current liabilities for which the entity\u2019s right to defer settlement is subject to compliance with future covenants within twelve months. The amendments require entities to disclose information about such covenants and related liabilities in the notes.
Agfa-Gevaert NV has a three-year multi-currency revolving credit facility of 230 million euro at its discretion. This facility is unsecured, runs until May 2026 and will be used for general corporate purposes. Drawdowns under this facility are subject to predefined covenants agreed with the financial institution, i.e. a leverage ratio of net financial debt over EBITDAand an interest cover of EBITDAover the interest expense which should not exceed certain tresh-olds. These covenants are tested twice a year. As per December 31, 2024, these covenants are met.
Drawdowns under this loan facility are made for short periods. Based on the fact that the entity has the right to roll over the drawdown under the existing loan facility and thus defer the settlement, the Group has classified this liabil-ity as long-term.
The other standards (amendments) were either not applicable or did not have a material impact to the Group\u2019s finan-cial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAdditionalInformationExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__23-1": { "value": "6.3 Free Cash Flowand Adjusted Free Cash Flow
Free Cash Flow: The sum of \u2018Net cash from/(used in) operating activities\u2019 and \u2018Net cash from/(used in) investing activities excluding the impact of \u2018Acquisitions of subsidiaries, net of cash acquired\u2019, \u2018Interests received\u2019 and the \u2018Net cash from/(used in) operating and investing activities that relates to discontinued operations\u2019.
Adjusted Free Cash Flow:Free Cash FlowAdjusted excluded for the impact of the \u2018Cash out for pensions below EBIT\u2019, the \u2018Cash out for long-term termination benefits\u2019 and the cash out for \u2018Adjustmentsand restructuring expenses\u2019.
Cash out for pensions below EBIT: The sum of Expenses for defined benefit plans and long-term termination benefits (see \u2018Consolidated Statement of Cash Flows\u2019) and the cash out for defined benefit plans and long-term termination bene-fits that are part of the \u2018Cash out for employee benefits\u2019 as presented in the Consolidated Statement of Cash Flows.
Adjustments and restructuring related cash in- and outflows: Cash in- and outflows resulting from income and expenses that are either in the current or previous reporting periods recognized in \u2018Adjustments\u2019 or \u2018Restructuring expenses\u2019.
The following table summarizes the components of (Adjusted) Free Cash Flowwith net increase (decrease) in cash and cash equivalents as presented in the consolidated statement of cash flows.
Reconciliation(Adjusted) Free Cash Flow | 2023 | 2024 |
Adjusted EBITDA | 76 | 70 |
Working capital-net | 21 | (18) |
Capex | (33) | (45) |
Provisions and other | (12) | 16 |
Income taxes | (1) | (4) |
Adjusted Free Cash Flow | 50 | 19 |
Pensions (below EBIT) and long term termination benefits | (47) | (44) |
Cashouts for adjustmentsand restructuring expenses\u00a0 | (51) | (21) |
Free Cash Flow | (48) | (46) |
Adjustmentsfor: | ||
Payment of finance leases | (21) | (21) |
Proceeds from borrowings | 40 | 85 |
Repayment of borrowings | - | (20) |
Acquisition of subsidiaries, net of cash acquired | 3 | - |
Acquisition of associates | (1) | (1) |
Interests received | 16 | 12 |
Interests paid | (13) | (16) |
Other financial flows | (4) | (6) |
Cash Flows from continued operations | (29) | (12) |
Net cash from/(used in) operating activities related to discontinued operations | (12) | (1) |
Net cash from/(used in) investing activities related to discontinued operations | (5) | 2 |
Net cash from/(used in) financing activities related to discontinued operations | (11) | - |
Cash Flows from discontinued operations | (28) | 1 |
Net increase (decrease) in cash and cash equivalent | (57) | (11) |
On April 3, 2023, the Agfa-Gevaert Group completed the sale of its Offset Solutions division to the investment firm Aurelius Group at a preliminary consideration of 49 million euro. During the third quarter 2023, the consideration has been reduced by three million euro. The price difference between June 30, 2023 (49 million euro) and September 30, 2023 (46 million euro) results from the review of the Closing Balance Sheet by our group auditor following the terms of the Sales Purchase Agreement (SPA). The decrease in net assets as a result of this audit work had an impact on the calculation of the sale price.
In the course of 2023, an amount of 11 million euro was received which brings the outstanding receivable to 35 million euro at December 31, 2023. Further discussions with the Aurelius Group have led to an understanding between parties that 2 million euro of this outstanding receivable is not due. In the course of the fourth quarter of 2024, 2 million was received, reducing the outstanding receivable to 31 million euro on December 31, 2024. The receipt is presented in the cash flow statement as \u2018Disposal of subsidiaries, net of cash disposed of\u2019.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__25": { "value": "7. REPORTABLE SEGMENTS
The activities of the Group have been grouped into four divisions: HealthCare IT, Digital Print and Chemicals, Radiology Solutions and CONOPS (Contractor Operations and Services former Offset). This divisional structure is technology and solutions based and will allow the business to seek future partnerships.
The Group\u2019s management has identified the aforementioned divisions as its operating segments. They equal the Group\u2019s reportable segments. All operating segments have strong market positions, well-defined strategies and full responsibility, authority and accountability.
To allow for a more accurate assessment of the performance of the operating segments some costs of Corporate func-tions at Group level (e.g. Investor Relations, Corporate Finance, Internal Audit, Corporate Tax, Corporate Risk) are not attributed to the operating segments. These costs are reported under \u2018Corporate Services.\u2019
The Group\u2019s operating segments reflect the level at which the Group\u2019s CEO and the Executive Committee review the business and make decisions about the allocation of resources and other operating matters. The reportable segments comprise the following activities:
HealthCare IT
Agfa HealthCare transforms the delivery of care \u2013 supporting healthcare professionals across the globe with holistic, fast, and meaningful engagement with patient images; no matter where, when or how they need access. Agfa HealthCare\u2019s Enterprise Imaging Platform is designed to not only incorporate cutting-edge technology, but also empower organizations to achieve their goals and unlock their full potential \u2013 making a difference in patients\u2019 lives on a daily basis. Focusing on creating an exceptional experience and true empowerment, Enterprise Imaging builds a connected, collaborative, and scalable community of care. Agfa HealthCare\u2019s secure platform makes this a reality by providing multi-specialty eco-systems of digital health solutions. There, images are available to all members of the care team, driving an improved performance for care providers, whilst helping to improve business, operational and financial outcomes. In addition to its robust solutions stack, Agfa HealthCare is dedicated to upholding strong client delivery principles. Its commitment extends beyond technology to ensure exceptional service and satisfaction. Agfa HealthCare calls it: \u201cThat\u2019s life in flow\u201d.
Digital Print and Chemicals
The Digital Print and Chemicals division serves a great variety of industries. Building on Agfa\u2019s expertise in chemistry and its deep knowledge of the graphic industry, the division has a leading position in inkjet printing. Agfa supplies sign and display and packaging printing companies with a range of highly productive and versatile wide-format inkjet printers with matched inks, powered by dedicated workflow software. In addition, it develops dedicated inkjet printing systems for the laminate and leather industries, as well as high-performance inkjet inks and fluids for a wide variety of industrial inkjet applications, enabling manufacturers to integrate print into their existing production processes. It also offers dedicated functional inkjet inks to specific hi-tech industries such as the printed electron-ics industry. Furthermore, the division supplies high-quality electrolysis membranes to the hydrogen production industry. With these best-in-class, exceptionally durable ZIRFON membranes, Agfa is in a strong position to benefit from the rise of the green hydrogen economy. The product assortment is completed by a range of printable synthetic papers and films for micrography, non-destructive testing, aerial photography and printed circuit board production.
Radiology Solutions
The Radiology Solutions division is a major player in the diagnostic imaging market, providing analog and digital imaging technology to meet the needs of specialized clinicians in hospitals and imaging centers around the world. Agfa\u2019s innovative imaging equipment and its leading MUSICA image processing software set standards in produc-tivity, safety, clinical value and cost effectiveness. Furthermore, its SmartXR portfolio provides radiographers with predictive workflow assistance. With nearly 160 years of experience, Agfa helps its customers to improve the quality and efficiency of their patient care. With Agfa, every image counts.
CONOPS (Contractor Operations and Services former Offset)
The sale of the Offset Solutions division in 2023 influences the way the Agfa-Gevaert Group reports its results. Under the terms of the share purchase agreement with Aurelius Group, the Agfa-Gevaert Group continues to provide certain consumables (including film) and services to its former division. In the financial statements of the Group this is pre-sented in a division called \u2018Contractor Operations and Services former Offset\u2019 or \u2018CONOPS\u2019. CONOPS represents the supply of film and chemicals as well as a set of support services delivered by Agfa to Offset Solutions.
As of April 2023, the segment CONOPS represents income charged to external parties ECO3, a subsidiary of the Aurelius Group, and Brother Optical Graphic Limited (Hongkong) and related costs. Revenue represents the supply agree-ments, with the corresponding cost under Cost of Sales. The income related to the support services is presented in other income, the corresponding costs are shown in the different SG and A lines. More information is provided in note 20.2.
7.1 PRINCIPLES APPLIED IN DETERMINING SEGMENT RESULTS, FREE CASH FLOWFOR
REPORTABLE SEGMENTS
The Group\u2019s management has identified the aforementioned divisions as its operating segments. They equal the Groups reportable segments.
There are no transactions between operating segments.
Segment results are attributed to a reportable segment based on the following principles:
direct attributable to a reportable segment whenever possible; otherwise
allocated to a reportable segment on a reasonable basis, preferably activity based.
To allow for a more accurate assessment of the performance of the operating segments some costs of Corporate func-tions at Group level (e.g. Investor Relations, Corporate Finance, Internal Audit, Corporate Tax, Corporate Risk) are not attributed to the operating segments. These costs are currently reported under \u2018Corporate Services.\u2019 Also the costs and liabilities for inactive employees (see below) and closed defined benefit plans are not attributed to operating segments as they cannot be allocated on a reasonable basis to one or more reportable segments.
These unallocated data are included in the reconciling items between the total reportable segment information and the consolidated profit or loss, total assets and total liabilities. This reconciliation is provided in note 7.3.
Inactive employees are defined as permanently retired employees, former employees with vested rights, and other employees who are not expected to return to active status, e.g. early retirement. Employees who are in principle only temporarily inactive, e.g. long-term disability or illness, maternity leave, military service, etc. are treated as active employees and are consequently assigned to one of the reportable segments.
7.2 KEY DATA BY BUSINESS
Key data for the reportable segments have been calculated as follows:
Adjusted EBITsee note 6.1.
Adjusted EBITDAsee note 6.2.
Free Cash Flowfrom (used in) reportable segments see note 6.3.
Reportable segment | HealthCare IT | Digital Print and Chemicals | Radiology Solutions | CONOPS | TOTAL | |||||
MILLION EURO | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 |
Revenue(1) | 249 | 242 | 409 | 438 | 425 | 383 | 68 | 75 | 1,150 | 1,138 |
Change\u00a0 | 2.2% | -3.0% | 9.8% | 7.2% | -7.9% | -9.8% | -0.3% | 10.1% | 0.5% | -1.1% |
Adjusted EBIT | 24 | 25 | 3 | 14 | 19 | 1 | - | 3 | 45 | 43 |
% of revenue | 9.7% | 10.5% | 0.6% | 3.1% | 4.4% | 0.2% | -0.5% | 4.4% | 2.7% | 3.8% |
Amortization and depreciation | 2 | 2 | 11 | 12 | 11 | 9 | 2 | 2 | 26 | 26 |
Depreciation right-of-use assets | 5 | 5 | 5 | 5 | 8 | 6 | 1 | 1 | 19 | 16 |
Adjusted EBITDA | 31 | 33 | 19 | 31 | 38 | 16 | 3 | 6 | 91 | 85 |
Profit/(loss) from operating activities generated by the four reportable segments | 20 | 23 | (1) | 2 | 8 | (46) | (1) | - | 26 | (21) |
Free Cash Flowfrom (used in) reportable segments | 18 | 8 | 7 | (7) | 4 | 11 | (9) | 7 | 20 | 19 |
Capital expenditures | 5 | 10 | 17 | 24 | 10 | 9 | 2 | 2 | 33 | 45 |
Impairment losses recognized on non-current assets | - | - | - | - | 5 | 24 | - | - | 5 | 24 |
Research and development expenses(3) | 32 | 30 | 29 | 32 | 10 | 8 | 1 | - | 73 | 70 |
Average number of employees (Full time equivalents)(2) | 1,250 | 1,209 | 1,379 | 1,407 | 1,937 | 1,782 | 281 | 189 | 4,847 | 4,586 |
(1) The revenue split of Digital Print and Chemicals over its three subdivisions is presented in note 8.2.
(2) The figures comprise permanent and temporary contracts.
(3) In 2024, 7 million euro development costs have been capitalized in the HealthCare IT business. These investments relate to cloud technology see also note 27.
7.3 RECONCILIATION OF REVENUE, ADJUSTED EBIT, PROFIT OR LOSS AND CASH FLOWS
MILLION EURO | 2023 | 2024 |
Revenue | ||
Revenue for reportable segments | 1,150 | 1,138 |
Consolidated revenue | 1,150 | 1,138 |
Adjusted EBIT | ||
Adjusted EBITfor reportable segments | 45 | 43 |
Adjusted EBITnot allocated to a reportable segment (1) | (15) | (16) |
Consolidated adjusted EBIT | 31 | 27 |
Profit or loss | ||
Profit/(loss) from operating activities generated by the four reportable segments | 26 | (21) |
Profit (loss) from operating activities not allocated to a reportable segment(1) | (34) | (27) |
Results from operating activities | (8) | (48) |
Other unallocated amounts: | ||
Interest income (expense) - net | 3 | (4) |
Other finance income (expense) - net | (29) | (22) |
Share of profit of associates - net of tax | (1) | (1) |
Consolidated profit (loss) before income taxes | (35) | (75) |
Cash Flows | ||
Free Cash Flowfrom (used in) reportable segments | 20 | 19 |
Operating Cash Flows not allocated to a reportable segment(1) | (68) | (66) |
Free Cash Flow | (48) | (46) |
(1) Operating results and cash flows, not allocated to a reportable segment, relate mainly to Corporate functions at Group level and inactive employees.
For the reconciliations of Free Cash Flowto net increase /(decrease) in cash and cash equivalents see note 6.3.
7.4 RECONCILIATION OF OTHER MATERIAL ITEMS FOR 2023 AND 2024
Other material items 2023
The segmented other material items as presented in the table under note 6.2 can be reconciled with the consolidated figures as follows:
MILLION EURO | Note | Reportable segments total | Not attributable to reportable segments | TOTAL |
Capital expenditures (cash outflows) | 27/28 | 33 | - | 33 |
Amortization and depreciation | 27/28 | 26 | - | 26 |
Depreciation right-of-use assets (IFRS 16) | 29 | 19 | - | 19 |
Impairment losses recognized on non-current assets | 27/28/29 | 5 | - | 5 |
Research and development expenses | 73 | - | 73 |
Other material items 2024
MILLION EURO | Note | Reportable segments total | Not attributable to reportable segments | TOTAL |
Capital expenditures (cash outflows) | 27/28 | 45 | - | 45 |
Amortization and depreciation | 27/28 | 26 | - | 26 |
Depreciation right-of-use assets (IFRS 16) | 29 | 16 | - | 16 |
Impairment losses recognized on non-current assets | 27/28/29 | 24 | - | 24 |
Research and development expenses | 70 | - | 70 |
7.5 GEOGRAPHICAL INFORMATION FOR 2023 AND 2024
The Group distinguishes four geographical regions: Europe, NAFTA, Latin America and Asia/Oceania/Africa. The Group\u2019s country of establishment is Belgium.
MILLION EURO | 2023 | 2024 |
Revenue by market(1) | Revenue by market(1) | |
Europe | 430 | 439 |
\u00a0\u00a0 of which related to home market Belgium | 80 | 59 |
NAFTA | 300 | 294 |
Latin America | 74 | 70 |
Asia/Oceania/Africa | 346 | 336 |
TOTAL | 1,150 | 1,138 |
Belgium | 80 | 59 |
Germany | 85 | 103 |
France | 29 | 31 |
Italy | 47 | 47 |
UK | 42 | 45 |
USA | 231 | 226 |
Canada | 45 | 45 |
Brazil | 30 | 31 |
India | 57 | 60 |
China\u00a0 | 140 | 119 |
the Netherlands | 36 | 33 |
Other foreign countries | 328 | 339 |
TOTAL CONSOLIDATED | 1,150 | 1,138 |
(1) Location by customer
MILLION EURO | 2023 | 2024 |
Non-current assets(1) | Non-current assets(1) | |
Europe | 234 | 255 |
\u00a0\u00a0 of which related to home market Belgium | 211 | 236 |
NAFTA | 256 | 246 |
Latin America | 3 | 6 |
Asia/Oceania/Africa | 9 | 5 |
TOTAL | 502 | 513 |
Belgium | 211 | 236 |
Germany | 5 | 1 |
UK | 9 | 8 |
USA | 110 | 100 |
Canada | 145 | 146 |
Italy | 5 | 6 |
China | 6 | 3 |
Brazil | 1 | 3 |
Mexico | 2 | 1 |
Other foreign countries | 8 | 9 |
TOTAL | 502 | 513 |
(1) Excluding deferred tax assets based on the location of the assets.
8. REVENUE
MILLION EURO | 2023 | 2024 |
Revenue from contracts with customers | 1,097 | 1,089 |
Revenue from other sources:\u00a0 | ||
Revenue from finance leases as lessor | 37 | 28 |
Managed Services | 17 | 20 |
Cash Flow hedges | (1) | 1 |
TOTAL REVENUE | 1,150 | 1,138 |
Driven by a strong performance in the last quarter of 2024, Digital Printing Solutions and Green Hydrogen Solutions both reported strong full year top line growth. Despite strong top line growth in quarter four of 2024, HealthCare IT\u2019s full year sales were lower due to the market transition to cloud technology. However, HealthCare IT ended the year with a record 32% increase in order intake. The traditional film activities were under pressure from the declining medical film markets. As a result, the Group\u2019s full year revenue remained almost stable versus 2023.
Mainly driven by the growth engines and in spite of the lower fixed cost coverage in the traditional film activities, the Group\u2019s gross profit margin remained stable at 31.2% of revenue.
Mainly based on cloud-related contracts with high-profile new customers, HealthCare IT recorded a record 32% increase in order intakestarting from 124.6 million euro the year before to 164.8 million euro. Out of the total 2024 order intake, 27% is cloud-related. Net new customers represent 33% of total order intake, 66% of total order intakeis related to project contracts and 34% to recurring revenue contracts. As expected and as a result of to the market transition to cloud technology, the division\u2019s top line decreased by 3.0% versus 2023. Recurring revenue grew by 4% and amounts to 57% of the total full year revenue. Mainly due to the increased service contribution and a higher con-tribution, of own IP software in total sales, HealthCare IT\u2019s gross profit margin improved from 46.5% in 2023 to 48.8%, which is an all-time high full year percentage for this division.
The Digital Print and Chemicals division\u2019s top line grew by 7.2%, mainly driven by continued growth for Green Hydrogen Solutions (+27%) and Digital Printing Solutions (+13%). Despite the rising silver cost, the division\u2019s gross profit margin improved from 27.1% of revenue in 2023 to 29% of revenue. This was partly driven by the successful pricing actions for film activities. The Digital Printing Solutions business posted record top line and EBITDAresults in 2024. In 2024, the business saw a gradual quarter-on-quarter acceleration of top line growth versus the previous year, resulting in a full year growth by 13%. This clearly shows the success of the growth strategy for these activities. Agfa expects to build further momentum with its digital printing portfolio in 2025, based on recent product launches and on the global strategic partnership between Agfa and EFI for digital printing equipment.
Ink top line grew by 15%, also driven by the success of the ongoing program to convert former Inca customers to Agfa\u2019s ink sets.
Sales of the ZIRFON membranes for renewable-powered green hydrogen production grew by 27% versus 2023. Overall market momentum is improving with increasing interest in alkaline water electrolysis projects for green hydrogen; important investments expected to be launched in Europe on the back of reinforced or continued support mecha-nisms (IPCEI, Hydrogen Bank, H2Global) and further implementation of EU legislation.
In the fourth quarter, Stiesdal Hydrogen, a leading innovator in renewable energy technology, has selected Agfa\u2019s ZIRFON membrane for use in its electrolyzers for green hydrogen production. Agfa continues to expand its customer base on the rising interest in Asia, resulting in the first major customer in India.
Volumes of Agfa\u2019s medical film business followed the declining market trends. Profitability in this business was impacted by the volume decrease and costs related to manufacturing inefficiencies. Agfa\u2019s Direct Radiography busi-ness posted an 8% top line increase in 2024. In Europe, consolidation exercises in healthcare groups are leading to postponed investment plans, while a further trend toward big tenders is increasing the fluctuations between quarters. Profitability for this business improved year-over-year, as well as quarter-over-quarter.
During 2024, the Group recorded 47% of its revenue in euro and 25% in US dollar. Revenue realized in other cur-rencies such as Indian rupee, Chinese yuan, British pound and Canadian dollar each amount to 5% of the Group\u2019s revenue. The impact of the currencies in the profit and loss statement on budgeted EBIT exposure is presented in disclosure note 21.1.4 \u2018Sensitivity analysis of foreign currency risk\u2019.
8.1 NATURE OF GOODS AND SERVICES
The Group generates revenue from the sale of goods, the rendering of services and offers multiple-element arrange-ments to customers. Other sources of revenue include revenue from equipment under finance lease agreements as
manufacturer/lessor (see note 31 \u2019Receivables under finance leases), revenue from managed services including rental
income from owned equipment under operating lease agreements (see note 44 \u2018Operating leases\u2019), and immaterial
amounts related to hedge accounting (see note 21.1.3 \u2018Foreign currency risk in profit or loss\u2019).
Revenue from the sale of goods includes the sale of consumables, chemicals, spare parts, stand-alone equipment sales and software licenses. Revenue from the sale of goods are recognized when the customer obtains control of the goods and when it is probable that the agreed transaction price will be collected. In evaluating whether collectability is probable, the entity considers the customer\u2019s ability and intention to pay that amount when it is due.
Revenue from the rendering of services includes installation services, maintenance and post-contract support services. Under the IFRS 15 standard, as the customer simultaneously receives and consumes the benefits related to these services, the revenue from rendering of services is recognized over time. In case the Group sells multiple services, the total consideration in service contracts will be allocated to all services based on their stand-alone selling price. The stand-alone selling price will be determined based on the list prices at which the Group sells the services in separate transactions.
The Group moreover enters into multiple-element arrangements with customers whereby several deliverables such as software, licenses, hardware, services and maintenance are combined and offered to the customer. In accordance with IFRS 15, the Group has assessed whether these deliverables qualify as separate performance obligations, based on the criteria of separate identifiability and whether or not the customer can benefit from goods or services on its own or with resources readily available to him. The Group concluded that for arrangements not requiring substantive customization of the software, these criteria were met. Within the HealthCare IT and Radiology Solutions business segment, the vast majority of the arrangements do not require significant customization or modification.
Within the Digital Print and Chemicals divisions, revenue from sale of equipment that require substantive installa-tion activities is recognized when the installation of the equipment is finalized in accordance with the contractually agreed specifications. Installation services and equipment for these installations are considered highly interrelated and are identified as one performance obligation that is recognized at a point in time, i.e. at installation at the client\u2019s premises. Revenue from the sale of smaller equipment not requiring substantive installation activities is recognized when the customer obtains control of the goods.
The application of the Group\u2019s accounting policy on recognition of revenue with regard to multiple-element arrangements requires judgment from management in allocating the total arrangement fee, including any discounts, to each performance obligation. Changes to the performance obligations in a multiple-element arrangement and the respective value allocated to the performance obligations could impact the amount of earned and unearned revenue.
Within the HealthCare IT segment, the Group also offers \u2018Software as a Service\u2019 arrangements, whereby products and services including own IP and other services are offered through cloud computing under a subscription model on a pay-per-use model. Agfa offers a right to access the software as it exists throughout the license period. The cloud
component is a service towards the customer who can access the software on an as-needed basis over the internet or a dedicated line. Revenue is recognized over time based on a pay-per-use schedule.
8.2 DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS
The disaggregation of revenue from contracts with customers at December 31, 2024, and December 31, 2023, as required by IFRS 15 can be presented as follows:
MILLION EURO | |||||||
2024 | |||||||
HealthCare IT | |||||||
Digital Print and Chemicals | |||||||
Radiology Solutions | CONOPS (former Offset Solutions)\u00a0 | TOTAL | |||||
Digital Printing Solutions | Specialty Film and Chemicals | Green Hydrogen Membranes | |||||
Geographical region | |||||||
Europe | 75 | 108 | 84 | 27 | 93 | 51 | 439 |
NAFTA | 128 | 65 | 47 | - | 53 | - | 294 |
Latin America | 12 | 10 | - | - | 44 | 3 | 70 |
Asia/Oceania/Africa | 27 | 14 | 80 | 2 | 193 | 20 | 336 |
Total revenue by geographical region (destination perspective) | 242 | 197 | 211 | 30 | 383 | 75 | 1,138 |
Revenue by nature | |||||||
Revenue from the sale of goods | 70 | 145 | 211 | 30 | 294 | 73 | 823 |
of which consumables | - | 73 | 210 | 30 | 211 | 71 | 595 |
of which equipment\u00a0 | 70 | 72 | 1 | - | 83 | 3 | 229 |
Revenue from the sale of services | 172 | 52 | - | 90 | 1 | 315 | |
Timing of recognition | |||||||
Revenue recognized at a point in time | 70 | 145 | 211 | 30 | 294 | 73 | 823 |
Revenue recognized over time | 172 | 52 | - | - | 90 | 1 | 315 |
MILLION EURO | |||||||
2023 | |||||||
HealthCare IT | |||||||
Digital Print and Chemicals | |||||||
Radiology Solutions | CONOPS (former Offset Solutions)\u00a0 | TOTAL | |||||
Digital Printing Solutions | Specialty Film and Chemicals | Green Hydrogen Membranes | |||||
Geographical region | |||||||
Europe | 76 | 89 | 82 | 22 | 97 | 64 | 430 |
NAFTA | 139 | 60 | 48 | - | 53 | - | 300 |
Latin America | 11 | 10 | - | - | 49 | 4 | 74 |
Asia/Oceania/Africa | 23 | 16 | 80 | 1 | 226 | - | 346 |
Total revenue by geographical region (destination perspective) | 249 | 175 | 211 | 23 | 425 | 68 | 1,150 |
Revenue by nature | |||||||
Revenue from the sale of goods | 79 | 127 | 210 | 23 | 333 | 67 | 839 |
of which consumables | - | 67 | 209 | 23 | 250 | 65 | 613 |
of which equipment\u00a0 | 79 | 60 | 1 | - | 83 | 2 | 226 |
Revenue from the sale of services | 171 | 47 | - | - | 92 | 1 | 311 |
Timing of recognition | |||||||
Revenue recognized at a point in time | 79 | 127 | 210 | 23 | 333 | 67 | 839 |
Revenue recognized over time | 171 | 47 | - | - | 92 | 1 | 311 |
Transaction prices allocated to unsatisfied performance obligations are not disclosed as the contracts have in general original expected durations of one year or less.
Within HealthCare IT, the Group has defined standard payment terms which differ between regions based on local practices. Payment terms are kept as short as possible. In Europe, LATAM, NAFTA and ASPAC these payment terms are on average 30 days after invoicing date, except for Southern Europe where these range between 60-90 days after invoicing date.
In other divisions of the Group, payment terms are set based on business and geographical requirements. Deviations from this policy are reviewed by the Credit Committees and approved based on different criteria.
8.3 CONTRACT BALANCES
The Group has recognized following revenue-related receivables, contract assets and contract liabilities:
MILLION EURO | 2023 | 2024 |
Trade receivables | 177 | 181 |
Contract assets\u00a0 | 82 | 93 |
Assets recognized for costs to fulfill contracts | 23 | 21 |
Goods/services transferred before payment is due | 60 | 72 |
Contract liabilities | 97 | 102 |
Deferred revenue | 78 | 76 |
Advance payments received from customers | 14 | 20 |
Expected volume discounts - rebates | 5 | 6 |
At December 31, 2024, contract assets amounted to 93 million euro (2023: 83 million euro). Contract assets primarily relate to the Group\u2019s rights to consideration for work performed that is not yet billed. Contract assets are transferred to receivables when the right to payment becomes unconditional. Assets recognized for costs to fulfill contracts com-prise all costs that are directly related to a contract such as direct labor, direct materials (WIP balances) and costs that are explicitly chargeable to a customer under a contract. The Group does not capitalize costs to obtain a contract because the amortization period of this asset is less than one year.
At December 31, 2024, contract liabilities amounted to 102 million euro (2023: 97 million euro) and comprise \u2018Deferred revenue and advance payments received from customers\u2019 and accruals for bonuses and rebates to goods and service purchased by customers during 2024.
Deferred revenue comprises amounts invoiced in accordance with contractually agreed terms but unearned whereas advance payments reflect the amounts paid by customers who have not yet received an invoice and to whom the Company still has to fulfill its commitment, i.e. delivery of goods and/or services. Deferred revenue primarily results from milestone billing in arrangements combining multiple deliverables such as software, hardware, services, \u2026 (mul-tiple-element arrangements) and from the advance billing of service and maintenance contracts.
Contract assets related to multiple-element arrangements within the HealthCare IT business amount 84 million euro (2023: 76 million euro), to 2 million euro within the division of Digital Print and Chemicals (2023: 2 million euro) and to 7 million euro within the Radiology Solutions division (2023: 5 million euro). Contract liabilities related to multiple-element arrangements within the HealthCare IT business amount to 53 million euro (2023: 57 million euro), within Digital Print and Chemicals to 22 million euro (2023: 16 million euro), within Radiology Solutions to 27 million euro (2023: 24 million euro) and within Offset Solutions to 1 million euro (2023: 0 million euro).
For credit risks associated with receivables resulting from revenue from contracts with customers see note 22.
8.4 EVOLUTION OF CONTRACT ASSETS AND CONTRACT LIABILITIES
Following table shows how much of the revenue recognized in the current period relates to the carry forward of con-tract assets and liabilities and how much relates to performance obligations that were satisfied in a prior period:
MILLION EURO\u00a0 | Contract assets | Contract liabilities |
Opening balance of contract assets and liabilities | 82 | 97 |
Revenue recognized that was included in the contract liability at the beginning of the period | - | (97) |
Revenue recognized from performance obligations satisfied in previous periods | - | - |
Advance billings to customers during the year\u00a0 | - | 141 |
Advance payments received from customers during the year | - | 28 |
Revenue recognized during the period | - | (69) |
Contract assets recognized during the period | 192 | - |
Transfer from contract assets to receivables | (107) | - |
Impairment of contract assets | - | - |
Contract assets (work in progress) released in Cogs during the period | (77) | - |
Change in volume discounts/rebates | - | (1) |
Acquisitions and disposals of business | - | - |
Exchange differences | 2 | 2 |
Closing balance of contract assets and liabilities | 93 | 102 |
9.1 OTHER OPERATING INCOME
MILLION EURO | 2023 | 2024 |
Exchange gains and changes in fair value of derivatives | 3 | 2 |
Finance lease income | 6 | 6 |
Gains on the sale of property, plant and equipment | - | 1 |
Income from reversal of unutilized provisions | 1 | 2 |
Recharges of costs and income from support services for ECO3 | 40 | 29 |
Government grant\u00a0 | - | 1 |
Settlement Air Cargo Cartel Claim | - | 1 |
Other income | 3 | 6 |
TOTAL\u00a0 | 53 | 48 |
Finance lease income (2024: 6 million euro; 2023: 6 million euro) mainly comprises interest income. The Group leases out its commercial equipment under finance leases mainly via Agfa Finance, i.e. Agfa Finance NV, Agfa Finance Corp. and Agfa Finance Inc.
Following the completion of the sale and purchase of the Offset Solutions business on April 3, 2023, the Agfa Group and Aurelius Group have agreed that the Agfa Group would provide certain services to ECO3 (its former Offset Solutions division) during a transition period. Most of the support services cover a period of twelve months or less as from the date of completion of the sale. Temporary support services mainly relate to service that the Agfa Group provides in regards of IT-activities and Logistics. In this respect some costs charged by third parties could be recharged to ECO3.
The income related to the support services is presented in the segment \u2018Contractor Operations and services former Offset\u2019(CONOPS)\u2019 in Other operating Income, the corresponding costs are shown in the different line items of Selling and General Administration expenses.
For 2024, recharges of costs and income from support services to ECO3 amount to 29 million euro (2023: 40 million euro).
In December 2024, the Group was attributed 1 million euro due to the settlement of a claim against a number of air cargo carriers who have been convicted of violating European competition law by their participating in a price fixing cartel, from December 1999 to February 2006.
In 2024, the gains on the sale of Property, plant and equipment mainly relates to the sale of a warehouse in Spain.
Income from reversal of unutilized provisions comprises for 2024 the impact of reversals of a provision for soil reme-diation (1 million euro) and trade related commitments (2 million euro).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__28": { "value": "8.1 NATURE OF GOODS AND SERVICES
The Group generates revenue from the sale of goods, the rendering of services and offers multiple-element arrange-ments to customers. Other sources of revenue include revenue from equipment under finance lease agreements as
manufacturer/lessor (see note 31 \u2019Receivables under finance leases), revenue from managed services including rental
income from owned equipment under operating lease agreements (see note 44 \u2018Operating leases\u2019), and immaterial
amounts related to hedge accounting (see note 21.1.3 \u2018Foreign currency risk in profit or loss\u2019).
Revenue from the sale of goods includes the sale of consumables, chemicals, spare parts, stand-alone equipment sales and software licenses. Revenue from the sale of goods are recognized when the customer obtains control of the goods and when it is probable that the agreed transaction price will be collected. In evaluating whether collectability is probable, the entity considers the customer\u2019s ability and intention to pay that amount when it is due.
Revenue from the rendering of services includes installation services, maintenance and post-contract support services. Under the IFRS 15 standard, as the customer simultaneously receives and consumes the benefits related to these services, the revenue from rendering of services is recognized over time. In case the Group sells multiple services, the total consideration in service contracts will be allocated to all services based on their stand-alone selling price. The stand-alone selling price will be determined based on the list prices at which the Group sells the services in separate transactions.
The Group moreover enters into multiple-element arrangements with customers whereby several deliverables such as software, licenses, hardware, services and maintenance are combined and offered to the customer. In accordance with IFRS 15, the Group has assessed whether these deliverables qualify as separate performance obligations, based on the criteria of separate identifiability and whether or not the customer can benefit from goods or services on its own or with resources readily available to him. The Group concluded that for arrangements not requiring substantive customization of the software, these criteria were met. Within the HealthCare IT and Radiology Solutions business segment, the vast majority of the arrangements do not require significant customization or modification.
Within the Digital Print and Chemicals divisions, revenue from sale of equipment that require substantive installa-tion activities is recognized when the installation of the equipment is finalized in accordance with the contractually agreed specifications. Installation services and equipment for these installations are considered highly interrelated and are identified as one performance obligation that is recognized at a point in time, i.e. at installation at the client\u2019s premises. Revenue from the sale of smaller equipment not requiring substantive installation activities is recognized when the customer obtains control of the goods.
The application of the Group\u2019s accounting policy on recognition of revenue with regard to multiple-element arrangements requires judgment from management in allocating the total arrangement fee, including any discounts, to each performance obligation. Changes to the performance obligations in a multiple-element arrangement and the respective value allocated to the performance obligations could impact the amount of earned and unearned revenue.
Within the HealthCare IT segment, the Group also offers \u2018Software as a Service\u2019 arrangements, whereby products and services including own IP and other services are offered through cloud computing under a subscription model on a pay-per-use model. Agfa offers a right to access the software as it exists throughout the license period. The cloud
component is a service towards the customer who can access the software on an as-needed basis over the internet or a dedicated line. Revenue is recognized over time based on a pay-per-use schedule.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRevenueExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__30": { "value": "9.2 OTHER OPERATING EXPENSES
MILLION EURO | 2023 | 2024 |
Restructuring expenses | 9 | 38 |
Impairment losses on PP and E | 2 | 20 |
Impairment losses on right-of-use assets | 3 | 4 |
Exchange losses and changes in fair value of derivatives | 9 | 5 |
Housing expenses related to empty space\u00a0 | 3 | 4 |
Other expenses | 12 | 12 |
TOTAL | 38 | 83 |
In 2024, restructuring expenses(38 million euro) mainly relate to the reorganization of the manufacturing plant in Belgium (32 million euro) and the closure of the Schrobenhausen site in Germany (5 million euro). The net reorganization expense of 32 million in the manufacturing plant in Belgium consists of a base headcount cost of 37 million euro reduced with a curtailment gain on 4 million euro, an estimate of the reduction in the retirement plan obligations in connection with the headcount reduction plan and a positive impact from charging Shenzhen Brothers for their contribution in the reorganization program for an amount of 1 million euro (see note 33).
In November 2024, Agfa announced a headcount reduction program in Belgium that will take effect over the next three years. The program will affect employees of Agfa-Gevaert NV and is expected to result in approximately 380 full-time equivalents across blue collar, white collar and management employees to become redundant. This program aims to adjust the cost base of the Group\u2019s traditional film activities considering the steep market decline in this business. Related cost base reduction is estimated at 50 million euro by the end of 2027. The first savings will start to materialize in the second half of 2025.
In 2023, restructuring expensesamounted to 9 million euro and mainly related to employee related restructuring expenses: 4 million euro related to HealthCare IT (NAFTA and Europe), 3 million euro in Digital Print and Chemicals (Europe) and 2 million euro for Radiology Solutions (Europe and China).
In 2024, because of the reduced performance of the business segment Radiology Solutions, an impairment test was performed compliant with IAS 36 on Intangible assets, Property, plant and equipment, and Right-of-use assets belonging to this business segment. Individual assets that generate largely independent cash inflows have been tested separately for impairment. Assets for which the value in use could not be determined separately, were tested on the basis of the cash generating unit Radiology Solutions. This has resulted in an impairment loss of 22 million euro (18 million euro on Property, plant and equipment and 4 million euro on Right-of-use assets) on top of the impairment losses recognized due to decommissioning of certain assets (2 million euro). In 2023, a similar test resulted in the recording of an impairment loss amounting to 2 million euro on the dedicated assets of the Radiology film business in Mortsel.
In 2023, impairment losses on Right-of-use assets have been recognized for an amount of 3 million euro. The loss is related to the empty space in the rented office in Munich. This was also linked to the Radiology Solutions activity.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__31": { "value": "10. NET FINANCE COSTS
MILLION EURO | 2023 | 2024 |
Interest income | ||
\u00a0\u00a0\u00a0\u00a0 on bank deposits and cash balancing accounts | 15 | 11 |
TOTAL INTEREST INCOME | 15 | 11 |
Interest expense on financial liabilities measured at amortized cost | ||
\u00a0\u00a0\u00a0\u00a0 on bank loans and cash balancing accounts\u00a0 | (12) | (15) |
TOTAL INTEREST EXPENSE | (12) | (15) |
Other finance income | ||
Exchange gains on non-operating activities net of changes in fair value of derivative financial instruments not part of a hedging relationship | 2 | 1 |
Other | 1 | 1 |
TOTAL OTHER FINANCE INCOME | 2 | 2 |
Other finance expense | ||
Net periodic pension cost treated as other finance income (expense) and interest portion on other interest-bearing provisions(1) | (20) | (16) |
Exchange losses on non-operating activities net of change in fair value of derivative financial instruments not part of a hedging relationship | (3) | - |
Interest expense on derivatives not part of a hedging relationship\u00a0 | (4) | (2) |
Interest expense on cash flow hedges | - | - |
Interest expense on other receivables | - | (1) |
Interest expense for leases | (2) | (2) |
Impairment loss on marketable securities | - | - |
Unwinding of discount on provisions | - | - |
Exchange differences on disposal of foreign operations reclassified to profit or loss | - | - |
Other | (2) | (2) |
TOTAL OTHER FINANCE EXPENSE | (31) | (24) |
NET FINANCE COSTS | (26)(2) | (27)(2) |
(1) The interest portion of other interest-bearing provisions primarily comprises the allocation of interest on provisions for pre-retirement.\u00a0 | ||
(2) The above finance income and finance costs include the following interest income and expense in respect of assets (liabilities) not at fair value through profit or loss. | ||
Total interest income on financial assets | 15 | 12 |
Total interest expense on financial liabilities\u00a0 | (15) | (18) |
10. NET FINANCE COSTS
MILLION EURO | 2023 | 2024 |
Interest income | ||
\u00a0\u00a0\u00a0\u00a0 on bank deposits and cash balancing accounts | 15 | 11 |
TOTAL INTEREST INCOME | 15 | 11 |
Interest expense on financial liabilities measured at amortized cost | ||
\u00a0\u00a0\u00a0\u00a0 on bank loans and cash balancing accounts\u00a0 | (12) | (15) |
TOTAL INTEREST EXPENSE | (12) | (15) |
Other finance income | ||
Exchange gains on non-operating activities net of changes in fair value of derivative financial instruments not part of a hedging relationship | 2 | 1 |
Other | 1 | 1 |
TOTAL OTHER FINANCE INCOME | 2 | 2 |
Other finance expense | ||
Net periodic pension cost treated as other finance income (expense) and interest portion on other interest-bearing provisions(1) | (20) | (16) |
Exchange losses on non-operating activities net of change in fair value of derivative financial instruments not part of a hedging relationship | (3) | - |
Interest expense on derivatives not part of a hedging relationship\u00a0 | (4) | (2) |
Interest expense on cash flow hedges | - | - |
Interest expense on other receivables | - | (1) |
Interest expense for leases | (2) | (2) |
Impairment loss on marketable securities | - | - |
Unwinding of discount on provisions | - | - |
Exchange differences on disposal of foreign operations reclassified to profit or loss | - | - |
Other | (2) | (2) |
TOTAL OTHER FINANCE EXPENSE | (31) | (24) |
NET FINANCE COSTS | (26)(2) | (27)(2) |
(1) The interest portion of other interest-bearing provisions primarily comprises the allocation of interest on provisions for pre-retirement.\u00a0 | ||
(2) The above finance income and finance costs include the following interest income and expense in respect of assets (liabilities) not at fair value through profit or loss. | ||
Total interest income on financial assets | 15 | 12 |
Total interest expense on financial liabilities\u00a0 | (15) | (18) |
10. NET FINANCE COSTS
MILLION EURO | 2023 | 2024 |
Interest income | ||
\u00a0\u00a0\u00a0\u00a0 on bank deposits and cash balancing accounts | 15 | 11 |
TOTAL INTEREST INCOME | 15 | 11 |
Interest expense on financial liabilities measured at amortized cost | ||
\u00a0\u00a0\u00a0\u00a0 on bank loans and cash balancing accounts\u00a0 | (12) | (15) |
TOTAL INTEREST EXPENSE | (12) | (15) |
Other finance income | ||
Exchange gains on non-operating activities net of changes in fair value of derivative financial instruments not part of a hedging relationship | 2 | 1 |
Other | 1 | 1 |
TOTAL OTHER FINANCE INCOME | 2 | 2 |
Other finance expense | ||
Net periodic pension cost treated as other finance income (expense) and interest portion on other interest-bearing provisions(1) | (20) | (16) |
Exchange losses on non-operating activities net of change in fair value of derivative financial instruments not part of a hedging relationship | (3) | - |
Interest expense on derivatives not part of a hedging relationship\u00a0 | (4) | (2) |
Interest expense on cash flow hedges | - | - |
Interest expense on other receivables | - | (1) |
Interest expense for leases | (2) | (2) |
Impairment loss on marketable securities | - | - |
Unwinding of discount on provisions | - | - |
Exchange differences on disposal of foreign operations reclassified to profit or loss | - | - |
Other | (2) | (2) |
TOTAL OTHER FINANCE EXPENSE | (31) | (24) |
NET FINANCE COSTS | (26)(2) | (27)(2) |
(1) The interest portion of other interest-bearing provisions primarily comprises the allocation of interest on provisions for pre-retirement.\u00a0 | ||
(2) The above finance income and finance costs include the following interest income and expense in respect of assets (liabilities) not at fair value through profit or loss. | ||
Total interest income on financial assets | 15 | 12 |
Total interest expense on financial liabilities\u00a0 | (15) | (18) |
10. NET FINANCE COSTS
MILLION EURO | 2023 | 2024 |
Interest income | ||
\u00a0\u00a0\u00a0\u00a0 on bank deposits and cash balancing accounts | 15 | 11 |
TOTAL INTEREST INCOME | 15 | 11 |
Interest expense on financial liabilities measured at amortized cost | ||
\u00a0\u00a0\u00a0\u00a0 on bank loans and cash balancing accounts\u00a0 | (12) | (15) |
TOTAL INTEREST EXPENSE | (12) | (15) |
Other finance income | ||
Exchange gains on non-operating activities net of changes in fair value of derivative financial instruments not part of a hedging relationship | 2 | 1 |
Other | 1 | 1 |
TOTAL OTHER FINANCE INCOME | 2 | 2 |
Other finance expense | ||
Net periodic pension cost treated as other finance income (expense) and interest portion on other interest-bearing provisions(1) | (20) | (16) |
Exchange losses on non-operating activities net of change in fair value of derivative financial instruments not part of a hedging relationship | (3) | - |
Interest expense on derivatives not part of a hedging relationship\u00a0 | (4) | (2) |
Interest expense on cash flow hedges | - | - |
Interest expense on other receivables | - | (1) |
Interest expense for leases | (2) | (2) |
Impairment loss on marketable securities | - | - |
Unwinding of discount on provisions | - | - |
Exchange differences on disposal of foreign operations reclassified to profit or loss | - | - |
Other | (2) | (2) |
TOTAL OTHER FINANCE EXPENSE | (31) | (24) |
NET FINANCE COSTS | (26)(2) | (27)(2) |
(1) The interest portion of other interest-bearing provisions primarily comprises the allocation of interest on provisions for pre-retirement.\u00a0 | ||
(2) The above finance income and finance costs include the following interest income and expense in respect of assets (liabilities) not at fair value through profit or loss. | ||
Total interest income on financial assets | 15 | 12 |
Total interest expense on financial liabilities\u00a0 | (15) | (18) |
26. ITEMS OF INCOME, EXPENSE, GAINS AND LOSSES ON FINANCIAL
INSTRUMENTS RECOGNIZED IN PROFIT OR LOSS
MILLION EURO | 2023 | ||||
Financial assets at amortized cost | Derivatives | Financial liabilities car-ried at amortized cost | Financial liabilities at fair value | TOTAL | |
Interest income | 16 | - | - | - | 16 |
Interest expense | - | (3) | (15) | - | (18) |
Finance lease income | 6 | - | - | - | 6 |
Impairment charges | (1) | - | - | - | (1) |
Income from reversal of impairment losses | 2 | - | - | - | 2 |
Change in fair value of financial instruments not part of a hedging relationship | - | - | - | - | - |
Net result from ineffectiveness of hedging instruments designated as cash flow hedges | - | - | - | - | - |
MILLION EURO | |||||
2024 | |||||
Financial assets at amortized cost | Derivatives | Financial liabilities car-ried at amortized cost | Financial liabilities at fair value | TOTAL | |
Interest income | 12 | - | - | - | 12 |
Interest expense | - | (2) | (18) | - | (20) |
Finance lease income | 7 | - | - | - | 7 |
Impairment charges | (3) | - | - | - | (3) |
Income from reversal of impairment losses | 2 | - | - | - | 2 |
Change in fair value of financial instruments not part of a hedging relationship | - | (2) | - | - | (2) |
Net result from ineffectiveness of hedging instruments designated as cash flow hedges | - | - | - | - | - |
ASSETS
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__35": { "value": "11. INFORMATION ON THE NATURE OF EXPENSES
The following table gives an overview of the major expenses/income (incl. subject to restructuring) of the Group\u2019s operating result classified by nature:
MILLION EURO | Note | 2023 | 2024 |
Revenue | 1,150 | 1,138 | |
Cost of goods and services | (654) | (641) | |
Personnel expenses | (466) | (459) | |
Amortization and depreciation | (45) | (42) | |
Impairment losses on goodwill, intangible assets, PP and E and right-of-use assets | 9.2 | (5) | (24) |
Write-downs/write-offs on inventories\u00a0 | 32 | (11) | (10) |
Impairment losses on receivables | 22.2 | 1 | (1) |
Changes in provisions excl. restructuring | 1 | (1) | |
Restructuring expenses | 6/7/9 | (9) | (38) |
Various income and expenses | 30 | 31 | |
Operating result | (8) | (48) |
Upon review of the cost structure for 2023 and 2024, including the restatments for the first quarter of 2023 due to the sale of the Offset Solutions division, it became clear that some cost items had different content. In the interest of compa-rability, the items 'Cost of goods and services,' 'Personnel expenses ', and 'Various income and expenses' were restated.
Cost of goods cover all costs incurred to purchase raw materials, goods purchased for resale, spare parts, changes in inventory and all costs that have a clear link to production such as costs for recutting and refurbishing, to the extent reflected in the cost of sales as comprised in profit or loss for the year,
Cost of services mainly cover:
the external preliminary work for the processing or manufacturing of products and projects on behalf of the Company
transport, freight, duties, storage and handling expenses
utilities and energy expenses
travel and entertainment
expenses from leasing activities
Personnel expenses in 2024 amounted to 459 million euro compared to 466 million euro in 2023.
The decrease of these personnel expenses is mainly driven by a reduction in headcount.
Personnel expense comprises:
payroll related expenses: wages and salaries and social security contributions
expenses for retirement benefits
accrued expenses for personnel expenses (such as annual vacation and annual variable payments)
other personnel expenses (such as temporary staff, training, recruitment and outplacement). Personnel related restructuring expensesare reported as restructuring expenses
The average number of employees in full-time equivalent heads for 2024 amounted to 4,586 (2023: 4,847). Classified per function, this average comprising permanent and temporary contracts can be presented as follows:
MILLION EURO | 2023 | 2024 |
Manufacturing/Engineering | 1,519 | 1,464 |
Research and development | 656 | 631 |
Sales and Marketing/Service | 1,900 | 1,783 |
Administration | 772 | 708 |
TOTAL | 4,847 | 4,586 |
12. EARNINGS (LOSS) PER SHARE
12.1 BASIC EARNINGS (LOSS) PER SHARE/DILUTED EARNINGS (LOSS) PER SHARE
The calculation of earnings (loss) per share at December 31, 2024, was based on a loss attributable to owners of the Company of 92 million euro (2023: a loss of 102 million euro) and a weighted average number of ordinary shares outstanding during the year ended December 31, 2024, of 154,820,528 (2023: 154,820,528).
Number of shares issued\u00a0 | 154,820,528 | |
Own shares (see note 37.2) | - | |
Number of outstanding ordinary shares at December 31, 2024 (see note 37.1) | 154,820,528 | |
Effect of options exercised during 2024 | - | |
Effect of stock options on issue | - | |
Weighted average number of ordinary shares at December 31, 2024 | 154,820,528 | |
Euro | 2023 | 2024 |
Basic earnings (loss) per share/Diluted earnings (loss) per share | (0.66) | (0.59) |
The average fair value of one ordinary share during 2024 was 1.09 euro per share. This is an average and not a weighted average.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEarningsPerShareExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__40": { "value": "15. SHARE-BASED PAYMENT TRANSACTIONS
In the course of 2020, the Board of Directors has appointed Mr. Pascal Ju\u00e9ry as CEO of the Agfa-Gevaert Group and Managing Director. Mr. Ju\u00e9ry is eligible for a long-term variable compensation, embedded in a Stock Appreciation Rights Plan that can result in an additional cash bonus.
The key components of the Stock Appreciation Rights Plan are the following:
Over a period of five years, commencing on February 1, 2020, Mr. Ju\u00e9ry will annually receive 200,000 Stock Appre-ciation Rights.
The strike price for these Stock Appreciation Rights has been set for the year 2020 at 4.75 euro (to be adjusted downwards for any dividend distribution). As of 2021, the strike price is depending on the average closing price of the Agfa-Gevaert share during the 30 days preceding the grant date. At December 31, 2024, the total outstanding stock appreciation rights amount to 1,000,000; 200,000 at strike price of 4.75 euro, 200,000 at strike price of 3.7793 euro, 200.000 at strike price of 3.6 euro, 200.000 at strike price of 2.86 euro and 200.000 at strike price of 1.15 euro.
The Stock Appreciation Rights will vest for one/third of each grant at the end of each calendar year over three years.
The Stock Appreciation Rights can be exercised at the earliest three years after grant.
The lifetime of the Stock Appreciation Rights is eight years, except for the first tranche which has an infinite lifetime.
The fair value of the Stock Appreciation Rights Plan is calculated using a Black-Scholes model with expected life of 10 years for the first two tranches and with an expected life of five years for the other tranches and is presented as a liability with corresponding changes in fair value recognized in profit or loss (2024: 0.1 million euro; 2023: 0.2 million euro).
For the valuation of the Stock Appreciation Rights per December 31, 2024, following implied volatility has been used in the valuation model:
Tranche granted in 2020: 50.82%
Tranche granted in 2021: 50.32%
Tranche granted in 2022: 50.6%
Tranche granted in 2023: 49.41%
Tranche granted in 2024: 50.32%
In the course of 2024, 2023 and 2022, a long-term variable compensation, embedded in a Stock Appreciation Rights Plan that can result in an additional cash bonus, was granted to key personnel members of the Group.
The key components of this Stock Appreciations Rights Plan are the following:
In March 2021, an amount of 830,000 Stock Appreciation Rights have been granted to key member personnel. An amount of 175,000 Stock Appreciation Rights have been forfeited. The outstanding Stock Appreciation Rights on December 31, 2024 amount to 655,000.
The strike price of these Stock Appreciation Rights has been set at 3.7793 euro.
The Stock Appreciation Rights will vest for one/third of each grant at the end of each calendar year over three years.
The Stock Appreciation Rights can be exercised at the earliest three years after grant.
The Stock Appreciation Rights have a lifetime of eight years after grant date.
Implied volatility used in the valuation model: 53.23%.
In March 2022, an amount of 1,397,000 Stock Appreciation Rights have been granted to key member personnel. An amount of 303,000 Stock Appreciation Rights have been forfeited. The outstanding Stock Appreciation Rights on December 31, 2024 amount to 1,094,000.
The strike price of these Stock Appreciation Rights has been set at 3.6 euro.
The Stock Appreciation Rights will vest for one/third of each grant at the end of each calendar year over three years.
The Stock Appreciation Rights can be exercised at the earliest three years after grant.
The Stock Appreciation Rights have a lifetime of eight years after grant date.
Implied volatility used in the valuation model: 50.6%.
In March 2023, an amount of 1,207,000 Stock Appreciation Rights have been granted to key member personnel. An amount of 156,000 Stock Appreciation Rights have been forfeited. The outstanding Stock Appreciation Rights on December 31, 2024 amount to 1,051,000.
The strike price of these Stock Appreciation Rights has been set at 2.86 euro.
The Stock Appreciation Rights will vest for one/third of each grant at the end of each calendar year over three years.
The Stock Appreciation Rights can be exercised at the earliest three years after grant.
The Stock Appreciation Rights have a lifetime of eight years after grant date.
Implied volatility used in the valuation model: 49.41%.
In March 2024, an amount of 2,885,000 Stock Appreciation Rights have been granted to key member personnel. An amount of 478,000 Stock Appreciation Rights have been forfeited. The outstanding Stock Appreciation Rights on December 31, 2024 amount to 2,407,000.
The strike price of these Stock Appreciation Rights has been set at 1.15 euro.
The Stock Appreciation Rights will vest for one/third of each grant at the end of each calendar year over three years.
The Stock Appreciation Rights can be exercised at the earliest three years after grant.
The Stock Appreciation Rights have a lifetime of eight years after grant date.
Implied volatility used in the valuation model: 50.32%.
The fair value of the Stock Appreciation Rights Plan is calculated using a Black-Scholes model with expected life of five years and is presented as a liability with corresponding changes in fair value recognized in profit or loss (2024: 0.2 million euro; 2023: 0.1 million euro).
The total liability related to all share appreciation rights amounts to 0.3 million euro on December 31, 2024 (2023: 0.6 million euro).
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__43-1": { "value": "17. INCOME TAXES
The breakdown of the income tax expenses by origin is as follows:
MILLION EURO | 2023 | 2024 |
Taxes paid or accrued | 11 | 13 |
\u00a0\u00a0\u00a0\u00a0 Related to this year | 14 | 16 |
\u00a0\u00a0\u00a0\u00a0 Related to prior years | (3) | (3) |
Deferred tax expense (income) | 5 | 2 |
\u00a0\u00a0\u00a0\u00a0 From temporary differences | - | (2) |
\u00a0\u00a0\u00a0\u00a0 From tax loss carryforwards and tax credits | 5 | 4 |
Income tax expense | 16 | 15 |
Current tax expenses have increased from 11 million euro in 2023 to 13 million euro in 2024 largely explained by the utilization of carry forward tax losses which were not sufficient to offset all profit in Germany, as well as increased withholding taxes on capital repatriation.
Deferred tax expenses have decreased by 3 million euro, from 5 million euro in 2023 to 2 million euro in 2024. More details on the evolution of temporary differences per category and tax loss carryforwards and tax credits is provided under 17.4.
The major components of tax expense (income) are reflected in the table that reconciles the theoretical tax rate with the effective tax rate (see Note 17.3.2).
The Group has adopted International Tax Reform \u2013 Pillar Two Model Rules (Amendments to IAS 12) upon their release on May 23, 2023. The amendments provide a temporary mandatory exception from deferred tax accounting for the top-up tax, which is effective immediately, and require new disclosures about the Pillar Two exposure.
Agfa-Gevaert NV, the Ultimate Parent Entity of the Group is headquartered in Belgium, which has enacted new legis-lation to implement the global minimum top-up tax, with effect from January 1, 2024.
The Group has performed a detailed analysis and concluded that, for the financial year 2024, it is subject to the tran-sitional safe harbor rules in almost all jurisdictions in which it is present. For those jurisdictions that do not meet the transitional safe harbor thresholds, the Group performed a full calculation, based upon which no top-up tax is due. The Group does not expect material changes to occur in this regard for the financial year 2025.
The new legislation has also introduced additional compliance requirements, including notifications to local tax authorities and filing domestic top-up tax returns and prepayments. Agfa has already submitted the necessary notifi-cations to the Belgian, Austrian, and Hungarian tax authorities which were due in 2024 and will monitor notification requirements in other jurisdictions throughout 2025. The Group is taking the necessary steps to prepare for the first filings of domestic top-up tax returns, expected still in 2025.
17.1 CURRENT INCOME TAX ASSETS AND LIABILITIES
Current income tax for current and prior periods are, to the extent unpaid, recognized as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recog-nized as an asset.
Uncertain tax positions are recognized as liabilities if and to the extent it is probable that additional tax will be due, and the amount can be reliably measured. Significant judgment is involved in determining these positions. Further information is disclosed in note 4 \u2018Significant accounting estimates and judgments.
Current income tax liabilities amount to 21 million euro (2023: 23 million euro), of which 13 million euro (2023: 14 million euro) relates to uncertain tax positions.
On December 31, 2024, current income tax assets amount to 47 million euro (2023: 51 million euro), of which 78% relates to the refund of R and D tax credits (2023: 72%).
Current income tax assets are offset against current income tax liabilities when they relate to taxes levied by the same taxation authority and are intended to be settled on a net basis.
17.2 DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carry-forward of unused tax losses and the carry-forward of unused tax credits.
Deferred tax assets are recognized where it is sufficiently probable that taxable income will be available in the future to enable the deductible temporary differences, tax loss carry forwards and tax credits to be utilized.
The Group\u2019s management regularly assesses the recoverability of its deferred tax assets, mainly based on the long-term business plans of its business divisions. The recoverability of deferred tax assets of an entity that has recog-nized deferred tax assets is closely linked to the realization of the business segments' long-term planning in which it operates. Further information about this assessment and related uncertainty is provided in note 4 \u2018Significant accounting estimates and judgments\u2019.
Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences.
Deferred tax assets and deferred tax liabilities are offset if they relate to income taxes levied by the same taxation authority.
Deferred tax assets and liabilities are attributable to the following items:
MILLION EURO | December 31, 2023 | December 31, 2024 | ||||
Assets | Liabilities | Net | Assets | Liabilities | Net | |
Intangible assets and goodwill | 24 | 2 | 23 | 23 | 1 | 21 |
Property, plant and equipment | 8 | 5 | 3 | 10 | 4 | 7 |
Right-of-use assets | - | 9 | (9) | 1 | 11 | (10) |
Inventories | 10 | - | 10 | 9 | 3 | 6 |
Receivables under finance lease | - | 11 | (11) | - | 9 | (9) |
Trade and other receivables | 1 | - | 1 | 2 | 1 | 1 |
Provisions and liabilities for post-employment benefits | 20 | 6 | 14 | 22 | 10 | 12 |
Lease liabilities | 9 | - | 9 | 10 | - | 10 |
Other current assets and other liabilities | 7 | 6 | 1 | 10 | 5 | 5 |
Deferred tax assets and liabilities related to temporary differences | 80 | 39 | 40 | 86 | 44 | 43 |
Tax loss carry-forwards | 22 | - | 22 | 18 | - | 18 |
Excess tax credits | 3 | - | 3 | 2 | - | 2 |
Deferred tax assets/liabilities | 105 | 39 | 65 | 106 | 44 | 63 |
Set off of tax | (30) | (30) | - | (36) | (36) | - |
Net deferred tax assets/liabilities | 74 | 9 | 65 | 71 | 8 | 63 |
The movement in temporary differences during 2023-2024 is disclosed in note 17.4.
On December 31, 2024, the Group has a net deferred tax asset position of 63 million euro (2023: 65 million euro).
More than half of this balance relates to the HealthCare IT division, mainly linked to tax attributes and R and D related temporary differences in key jurisdictions. None of these attributes or differences are subject to expiration.
The Group believes it is probable that these recognized deferred tax assets on HealthCare IT are recoverable by 2030.
Other major deductible temporary differences and resulting deferred tax asset positions relate to defined benefit plans in Germany, mostly related to active employees.
96% of the Group\u2019s tax losses are concentrated in Belgium and the USA. Only on 4% of the total tax loss has a deferred tax asset been recognized.
Deferred tax assets have not been recognized in respect of \u2018tax loss carry forward,\u2019 \u2018tax credits\u2019 and \u2018temporary differ-ences\u2019 for the amounts stated hereafter because it is not probable that future taxable profit will be available against which the Group can utilize the benefits there from:
tax loss carry-forwards: 495 million euro (2023: 445 million euro);
tax credits: 18 million euro (2023: 17 million euro);
temporary differences: 112 million euro (2023: 116 million euro).
The deferred tax asset impact on unused temporary differences, tax losses and tax credits expire as follows:
MILLION EURO | Temporary differences | Tax losses | Tax credits | TOTAL |
Expiry in: | ||||
2025 | - | - | - | - |
2026 | - | - | - | - |
2027 | - | - | - | - |
2028 | - | - | - | - |
after | - | 35 | - | 35 |
No expiry | 112 | 460 | 18 | 590 |
TOTAL | 112 | 495 | 18 | 625 |
17.3 RELATIONSHIP BETWEEN INCOME TAX EXPENSE AND PROFIT (LOSS)
BEFORE INCOME TAXES
17.3.1 Summary 2023 and 2024
MILLION EURO | 2023 | 2024 |
Profit (loss) before income taxes | (35) | (76) |
Income tax expense | 16 | 15 |
Tax rate | -47.1% | -20.0% |
17.3.2 Reconciliation of effective tax rate 2023 and 2024
MILLION EURO | 2023 | 2024 |
Profit (loss) before income taxes | (35) | (76) |
Theoretical income tax expense (income) | (7) | (18) |
Theoretical tax rate(1) | 21% | 23% |
Disallowed items | 4 | 6 |
Impact of tax credits and other deduction from tax basis | (2) | (3) |
Tax losses of the year for which no deferred tax asset has been recorded | 42 | 32 |
Tax losses used this year for which no deferred tax asset was recorded | (1) | (5) |
Tax expense/(income) recorded on losses of previous years | 1 | (1) |
Prior year adjustments | (3) | (3) |
Tax expense/(income) due to movement in deductible temporary differences for which no deferred tax asset was recorded | (21) | 6 |
Withholding taxes | 1 | 1 |
Other | 2 | - |
Income tax expense | 16 | 15 |
Effective tax rate | -47% | 20% |
(1) The theoretical tax rate is the weighted average tax rate of the Company and all subsidiaries included in the consolidation. |
17.4 MOVEMENT IN TEMPORARY DIFFERENCES DURING 2023-2024
MILLION EURO | Decem-ber 31, 2022 | Change in consol-idation scope | Recog-nized in profit or loss | ||||||||
Rec-og-nized in other com-pre-hen-sive in-come | Trans-lation reserves | Decem-ber 31, 2023 | Change in consolida-tion scope | ||||||||
Recog-nized in profit or loss | |||||||||||
Recog-nized in other com-pre-hensive income | Trans-lation re-serves | December 31, 2024 | |||||||||
Intangible assets and goodwill | 28 | (5) | - | - | - | 23 | - | (2) | - | - | 21 |
Property, plant and equipment | (3) | (3) | 8 | - | - | 3 | - | 4 | - | - | 7 |
Right-of-use assets | (15) | 4 | 2 | - | - | (9) | - | (1) | - | - | (10) |
Inventories | 14 | (1) | (2) | - | (1) | 10 | - | (4) | - | - | 6 |
Receivables under finance lease | (6) | - | (5) | - | - | (11) | - | 2 | - | - | (9) |
Trade and other receivables | 5 | (1) | (1) | - | (1) | 1 | - | - | - | - | 1 |
Provisions and liabilities for post-employment benefits | 15 | (2) | (1) | 3 | - | 14 | - | (3) | - | - | 12 |
Lease liabilities | 14 | (4) | (2) | - | - | 9 | - | 1 | - | - | 10 |
Other current assets and other liabilities | 4 | 1 | (1) | - | - | 1 | - | 4 | - | - | 5 |
Deferred tax assets and liabili-ties related to temporary differences | 52 | (11) | (2) | 3 | (2) | 40 | - | 2 | - | - | 43 |
Tax loss carry-forwards | 27 | - | (5) | - | - | 22 | - | (4) | - | - | 18 |
Excess tax credits | 3 | - | - | - | - | 3 | - | - | - | - | 2 |
Deferred tax assets/liabilities | 82 | (11) | (7) | 3 | (2) | 65 | - | (2) | - | - | 63 |
The deferred tax asset on provisions and liabilities for post-employment benefits which is recognized in other com-prehensive income is related to the remeasurements of the net defined benefit liability (IAS 19R).
18. OTHER TAXES
Other tax receivables amount to 17 million euro (2023: 20 million euro) and other tax liabilities amount to 24 million euro (2023: 24 million euro). Other tax receivables consist of non-current other tax receivables of 2 million euro and current other tax receivables of 15 million euro.
Other tax receivables and liabilities relate to other tax, such as VAT and other indirect taxes.
Other tax receivables are offset against other tax liabilities when they relate to taxes levied by the same taxation authority, there is a legal right to offset and are intended to be settled on a net basis.
ACQUISITIONS AND DISPOSALS
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__41-1": { "value": "Deferred tax expenses have decreased by 3 million euro, from 5 million euro in 2023 to 2 million euro in 2024. More details on the evolution of temporary differences per category and tax loss carryforwards and tax credits is provided under 17.4.
The major components of tax expense (income) are reflected in the table that reconciles the theoretical tax rate with the effective tax rate (see Note 17.3.2).
The Group has adopted International Tax Reform \u2013 Pillar Two Model Rules (Amendments to IAS 12) upon their release on May 23, 2023. The amendments provide a temporary mandatory exception from deferred tax accounting for the top-up tax, which is effective immediately, and require new disclosures about the Pillar Two exposure.
17.2 DEFERRED TAX ASSETS AND LIABILITIES
Deferred tax assets are the amounts of income taxes recoverable in future periods in respect of deductible temporary differences, the carry-forward of unused tax losses and the carry-forward of unused tax credits.
Deferred tax assets are recognized where it is sufficiently probable that taxable income will be available in the future to enable the deductible temporary differences, tax loss carry forwards and tax credits to be utilized.
The Group\u2019s management regularly assesses the recoverability of its deferred tax assets, mainly based on the long-term business plans of its business divisions. The recoverability of deferred tax assets of an entity that has recog-nized deferred tax assets is closely linked to the realization of the business segments' long-term planning in which it operates. Further information about this assessment and related uncertainty is provided in note 4 \u2018Significant accounting estimates and judgments\u2019.
Deferred tax liabilities are the amounts of income taxes payable in future periods in respect of taxable temporary differences.
Deferred tax assets and deferred tax liabilities are offset if they relate to income taxes levied by the same taxation authority.
Deferred tax assets and liabilities are attributable to the following items:
MILLION EURO | December 31, 2023 | December 31, 2024 | ||||
Assets | Liabilities | Net | Assets | Liabilities | Net | |
Intangible assets and goodwill | 24 | 2 | 23 | 23 | 1 | 21 |
Property, plant and equipment | 8 | 5 | 3 | 10 | 4 | 7 |
Right-of-use assets | - | 9 | (9) | 1 | 11 | (10) |
Inventories | 10 | - | 10 | 9 | 3 | 6 |
Receivables under finance lease | - | 11 | (11) | - | 9 | (9) |
Trade and other receivables | 1 | - | 1 | 2 | 1 | 1 |
Provisions and liabilities for post-employment benefits | 20 | 6 | 14 | 22 | 10 | 12 |
Lease liabilities | 9 | - | 9 | 10 | - | 10 |
Other current assets and other liabilities | 7 | 6 | 1 | 10 | 5 | 5 |
Deferred tax assets and liabilities related to temporary differences | 80 | 39 | 40 | 86 | 44 | 43 |
Tax loss carry-forwards | 22 | - | 22 | 18 | - | 18 |
Excess tax credits | 3 | - | 3 | 2 | - | 2 |
Deferred tax assets/liabilities | 105 | 39 | 65 | 106 | 44 | 63 |
Set off of tax | (30) | (30) | - | (36) | (36) | - |
Net deferred tax assets/liabilities | 74 | 9 | 65 | 71 | 8 | 63 |
The movement in temporary differences during 2023-2024 is disclosed in note 17.4.
On December 31, 2024, the Group has a net deferred tax asset position of 63 million euro (2023: 65 million euro).
More than half of this balance relates to the HealthCare IT division, mainly linked to tax attributes and R and D related temporary differences in key jurisdictions. None of these attributes or differences are subject to expiration.
The Group believes it is probable that these recognized deferred tax assets on HealthCare IT are recoverable by 2030.
Other major deductible temporary differences and resulting deferred tax asset positions relate to defined benefit plans in Germany, mostly related to active employees.
96% of the Group\u2019s tax losses are concentrated in Belgium and the USA. Only on 4% of the total tax loss has a deferred tax asset been recognized.
Deferred tax assets have not been recognized in respect of \u2018tax loss carry forward,\u2019 \u2018tax credits\u2019 and \u2018temporary differ-ences\u2019 for the amounts stated hereafter because it is not probable that future taxable profit will be available against which the Group can utilize the benefits there from:
tax loss carry-forwards: 495 million euro (2023: 445 million euro);
tax credits: 18 million euro (2023: 17 million euro);
temporary differences: 112 million euro (2023: 116 million euro).
The deferred tax asset impact on unused temporary differences, tax losses and tax credits expire as follows:
MILLION EURO | Temporary differences | Tax losses | Tax credits | TOTAL |
Expiry in: | ||||
2025 | - | - | - | - |
2026 | - | - | - | - |
2027 | - | - | - | - |
2028 | - | - | - | - |
after | - | 35 | - | 35 |
No expiry | 112 | 460 | 18 | 590 |
TOTAL | 112 | 495 | 18 | 625 |
19. ACQUISITIONS
19.1 Acquisitions 2024
During 2024, the Group made no acquisitions.
19.2 Acquisitions 2023
During 2023, the Group made no acquisitions. In the course of 2023, an amount of 3 million euro was received from a deferred purchase price adjustment of the acquisition of Inca Digital Printers in 2022. In the cash flow statement of 2023 this is presented in \u2018Acquisitions of subsidiaries, net of tax\u2019.
20. DISPOSALS
20.01 Disposal 2024
During 2024, the Group made no disposals.
20.2. Disposal 2023
On April 3, 2023, the Agfa-Gevaert Group completed the sale of its Offset Solutions division to the investment firm Aurelius Group at a preliminary consideration of 49 million euro. During the third quarter 2023, the consideration has been reduced by three million euro. The price difference between June 30, 2023 (49 million euro) and September 30, 2023 (46 million euro) results from the review of the Closing Balance Sheet by our group auditor following the terms of the Sales Purchase Agreement (SPA). The decrease in net assets as a result of this audit work had an impact on the calculation of the sale price.
In the course of 2023, an amount of 11 million euro was received which brings the outstanding receivable to 35 million euro at December 31, 2023. Further discussions with the Aurelius Group have led to an understanding between parties that 2 million euro of this outstanding receivable is not due. In the course of the fourth quarter of 2024, 2 million was received, reducing the outstanding receivable to 31 million euro on December 31, 2024. The receipt is presented in the cash flow statement as \u2018Disposal of subsidiaries, net of cash disposed of\u2019.
The outstanding receivable in connection with the sale of the Offset Solutions division is for an amount of 19 million euro disputed by the Aurelius Group. The elements still in dispute mainly relate to tax items in Brazil, pension lia-bilities, a contract with the Lucky Group in China, asset retirement obligations in certain countries and governance issues in Taiwan. All these discussion items were assessed in the preparation of the financial statements and the outstanding receivable is in management's estimation the reflection of the provisions in the sale agreement.
The SPA provides for a preliminary purchase price and in addition, as is common in this type of transaction, a price adjustment clause to determine the final purchase price. The price adjustment clause provides that if the parties do not agree on the price adjustment, the final purchase price will be determined by an independent expert in accord-ance with a procedure set forth in the SPA. This independent expert will then make a binding decision. In the SPA, the parties agreed that the independent would be PricewaterhouseCoopers Bedrijfsrevisoren BV (\u201cPwC\u201d) or, if PwC is unable or unwilling to take on this role, \u201canother firm of good international reputation that is a member of the \u2018Instituut der Bedrijfsrevisoren\u2019/\u2018Institut des R\u00e9viseurs d\u2019Entreprises\u2019\u201d, appointed by the President of the Antwerp Enterprise Court at the request of either the Seller [Agfa] or the Buyer [Aurelius]. Because of a conflict of interest
\u2013 PwC has been appointed on the General Annual Meeting of May 2024 as our new group auditor \u2013 PwC could not take up the role of independent expert. In June 2024, the legal process for appointment and acceptance by the inde-pendent expert could be completed. The independent expert completely controls the process including the timing and the way how this engagement is executed, which makes transparent communication about the expected outcome of the independent investigation very difficult. In an initial meeting in July 2024 with all parties involved, the inde-pendent expert had created expectations of a draft report by mid-September 2024. This has resulted in a communi-cation at the occasion of the half year 2024 results that the conclusion of the expert and the final cash payment of the consideration could be expected in the fourth quarter of 2024. However, until the date of approval by the Board of Directors for the issuance of the consolidated financial statements for 2024, the independent expert has not yet made a draft report in the dispute over the sale price. Given the original expectation created by the independent expert, management assumes that the receivable will become collectible during 2025. The receivable is therefore presented on the balance sheet as a current receivable under the caption \u2018Other receivables\u2019.
Following the completion of the sale and purchase of the Offset Solutions business of the Agfa Group (\u201cthe Trans-action\u201d), and during a transition period, Agfa-Gevaert NV has agreed to manufacture and supply, among others, graphic arts film products and film chemicals (\u201cFilm Products\u201d) as well as plate and pressroom chemicals (\u201cPlate and Pressroom Products\u201d) to ECO3, owned by the Aurelius Group. The Parties have entered into two agreements covering all terms and conditions regarding the supply and purchase of (i) the Film Products (the \u201cFilm Supply Agreement\u201d), and (ii) the Plate and Pressroom Products (the Plate and Pressroom Supply Agreement\u201d). Following the completion of the Transaction, ECO3 in agreement with Agfa-Gevaert assigned the Film Supply Agreement and part of the Plate and Pressroom Supply Agreement to Shen Zhen Brother Optical (HK) Limited. Also following the completion of the Transaction, the parties have agreed that the Agfa Group would provide certain services during a transition period. In the Group\u2019s financial statements, the combined impact of the Film Supply Agreement, the Plate and Pressroom Supply Agreement and temporary services agreements are reflected in a separate reportable segment called \u2018Contrac-tor Operations and Services former Offset\u2019 or \u2018CONOPS\u2019.
The segment CONOPS represents income charged to external parties ECO3 and Shen Zhen Brother Optical (HK) Limited and related costs. In de consolidated statement of profit or loss, income from the supply agreements is reported as revenue with the corresponding cost under 'Cost of Sales'. At the end of June 2024, Agfa-Gevaert NV has signed an agreement \u2013 effective as from July 1, 2024 - to transfer the Film Supply Agreement and the Film Chemicals Exclusive Right and Obligation under the Plate and Pressroom Supply Agreement from ECO3 to Shen Zhen Brother Optical (HK) Limited and in a next step further assigned to Brother Optical Graphic Limited (HK).
The income related to the support services is presented in \u2018Other Income\u2019, the corresponding costs are shown in the different SG and A lines. The majority of the support services cover a period of twelve months or less as from the date of completion of the sale, at April 3, 2023. The profit or loss over the first quarter of 2023 is re-presented to reflect the post-closing relationships between Agfa-Gevaert and the Aurelius Group.
In the condensed consolidated statement of profit or loss and other comprehensive income the impact of the discon-tinued operations is presented separately from the continuing operations. The result from discontinued operations comprises both the loss on the sale transaction with Aurelius Group as well as the regular results from operations of the prior Offset Solutions Division.
The divestment had the following effect on the Group\u2019s financial statements:
Result of discontinued operations
million euro | 2023 | 2024 |
Revenue | 163 | - |
Cost of sales | (118) | - |
Gross profit | 45 | - |
Selling expenses | (16) | - |
Research and development expenses | (5) | - |
Administrative expenses | (8) | (2) |
Other operating income | - | 1 |
Other operating expenses | (18) | (1) |
Results from operating activities | (1) | (2) |
Interest income (expense) - net | - | - |
Other finance income (expense) - net | - | 1 |
Income tax expense | (5) | - |
Profit (loss) for the period | (6) | (1) |
Loss on the disposal of discontinued operations | (42) | - |
Profit (loss) from discontinued operations - net of tax | (49) | (1) |
For 2024, the result from discontinued operations recorded in administrative expenses (-2 million euro) relates to cost adjustments to the agreed post-closing ICS activities as agreed with the Aurelius Group, the other operating income (1 million euro) relate to a reversal of accounts payable positions resulting from the liquidation of a former Offset entity not part of the disposal Group. The loss recorded in other operating expenses (1 million euro) mainly relates to an adjustment of the consideration receivable. As of December 31, 2023, an estimate had been made regarding the potentially non-recoverable amount of the receivable. As the discussions and investigations were still ongoing and the amount was still unclear, a provision amounting to 1.5 million euro was recorded as of December 31, 2023. Eventually, after further investigation, Agfa determined the non-recoverable amount to be 1.9 million euro. As a provision of 1.5 million euro had already been recognized at year-end 2023, the provision was used to reduce the outstanding receivable and the additional loss recognized in 2024 from the revised purchase price could be limited.
The income in other finance income (expenses) is the release of cumulative translation adjustments to profit and loss upon liquidation of former Offset entities not part of the disposal Group.
Effect of disposal on the financial position of the Group:
million euro | |
ASSETS | |
Trade receivables | 141 |
Other assets | 6 |
Deferred tax assets | 11 |
Inventories | 155 |
Current income tax assets | 2 |
Other tax receivables | 7 |
Other financial assets | 0 |
Other receivables | 5 |
Other current assets | 5 |
Cash and cash equivalents | 13 |
TOTAL ASSETS | 344 |
LIABILITIES | |
Liabilities for post-employment benefits | 51 |
Lease liabilities | 16 |
Loans and borrowings\u00a0 | 4 |
Other loans and borrowings IC: current accounts positions with Group entities outside the disposal Group | 10 |
Provisions | 9 |
Deferred tax liabilities | 0 |
Trade payables\u00a0 | 93 |
Contract liabilities | 16 |
Current income tax liabilities | 8 |
Other tax liabilities | 5 |
Other payables | - |
Employee benefits | 22 |
TOTAL LIABILITIES | 233 |
Net assets disposal Group | 111 |
of which related to non-controlling interests | (32) |
of which related to other loans and borrowings IC\u00a0 | 10 |
Total identified net assets divested\u00a0 | 90 |
Consideration receivable\u00a0 | 46(1) |
Release of exchange differences of discontinued operations to profit or loss | 2 |
Directly attributable costs\u00a0 | - |
Loss on the disposal of discontinued operations | (42) |
Outstanding receivable on December 31, 2024 | 31(1) |
(1) During 2023, an amount of 11 million euro was received, bringing the outstanding receivable to 35 million at December 2023. During 2024,2 million euro was received and 2 million euro has become not due bringing the outstanding receivable to 31 million at December 31, 2024.\u00a0 |
The net cash flows attributable to the operating, investing and financing activities from discontinued operations is provided in the condensed statement of consolidated cash flows.
FINANCIAL RISKS AND FINANCIAL INSTRUMENTS
In the normal course of its business, the Group is exposed to a number of financial risks such as currency risk, inter-est rate risk, commodity price risk, liquidity risk and credit risk that could affect its financial position and its result of operations. The Group\u2019s objectives, policies and processes in managing these financial risks are described further in this note. In managing these risks, the Group may use derivative financial instruments. The use of derivative financial instruments is subject to internal controls and uniform guidelines set up by the Group\u2019s Treasury Committee. Deriva-tives used are over-the-counter instruments, particularly forward exchange contracts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__49": { "value": "21. MARKET RISK
21.1 FOREIGN CURRENCY RISK
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The foreign currency risk management distinguishes between three types of foreign currency risk: foreign currency transaction risk, foreign currency translation risk and foreign currency eco-nomic risk.
The Group incurs foreign currency transaction risk on accounts receivable, accounts payable and other monetary items that are denominated in a currency other than the Company\u2019s functional currency. Foreign currency transac-tion risk in the Group\u2019s operations also arises from the variability of cash flows in respect of forecasted transactions.
Foreign operations which do not have the euro as their functional currency give rise to a translation risk.
The foreign currency economic risk is the risk that future cash flows and earnings generated by foreign operations may vary. Foreign currency economic risk is highly connected with other factors such as the foreign operations\u2019 com-petitive position within an industry, its relationship with customers and suppliers.
In monitoring the foreign currency risk exposures, the central treasury department focuses on the transaction and translation risk exposures whereas business management seeks to manage the foreign economic risk through natural hedges.
Each of the above types of foreign currency risk exposure impacts the financial statements differently. The following significant exchange rates have been applied:
Yearly average rate | Year-end closing rate\u00a0 | |||
2023 | 2024 | 2023 | 2024 | |
EUR/USD | 1.08158 | 1.082055 | 1.105 | 1.0389 |
EUR/GBP | 0.869907 | 0.846592 | 0.86905 | 0.82918 |
EUR/CNY | 7.65907 | 7.78626 | 7.8509 | 7.5833 |
EUR/AUD | 1.628477 | 1.639944 | 1.6263 | 1.6772 |
EUR/CAD | 1.459581 | 1.481909 | 1.4642 | 1.4948 |
EUR/JPY | 151.942108 | 163.817355 | 156.33 | 163.06 |
EUR/INR | 89.324864 | 90.530736 | 91.9045 | 88.9335 |
EUR/KRW | 1,413.264 | 1,475.256 | 1,433.66 | 1,532.15 |
The central treasury department monitors and manages foreign currency exposure from the view of its impact on either the statement of financial position or profit or loss.
21.1.1 Foreign currency transaction risk in the statement of financial position
The currencies that primarily impact the net foreign currency exposure on the statement of financial position are as follows:
MILLION FOREIGN CURRENCY | Net exposure of receivablesand payables | Hedging | Net position | |
Cash, cash equivalents loans and deposits | Derivative financial instruments | |||
December 31, 2023 | ||||
USD | 35.5 | 21.3 | (51.2) | 5.6 |
CNY | 40.6 | (52.2) | - | (11.6) |
GBP | 3.7 | 5.3 | - | 9.0 |
AUD | 1.1 | (1.1) | - | - |
INR | 583.4 | - | (611.0) | (27.6) |
JPY | 680.4 | (519.0) | - | 161.4 |
KRW | 829.8 | - | (932.0) | (102.2) |
December 31, 2024 | ||||
USD | 15.5 | 53.1 | (59.4) | 9.1 |
CNY | (18.1) | (10.4) | - | (28.5) |
GBP | 5.0 | (3.8) | - | 1.2 |
AUD | 1.0 | (0.4) | - | 0.6 |
INR | 703.8 | - | (780.6) | (76.8) |
JPY | 625.3 | (580.0) | - | 45.3 |
KRW | 1,521.6 | - | (2,213.1) | (691.5) |
The Group uses cash, cash equivalents, loans and deposits held in a foreign currency as natural hedges of the net exposure of receivables and payables held in these respective currencies.
The aim of Group\u2019s management regarding transaction exposure in the statement of financial position is to minimize, over the short term, the revaluation results \u2013 both realized and unrealized \u2013 of items in the statement of financial position that are denominated in a currency other than the Company\u2019s functional currency.
In order to keep the exposures within predefined risk adjusted limits, the central treasury department economically hedges the net outstanding monetary items in the statement of financial position in foreign currency using derivative financial instruments such as forward exchange contracts. As of December 31, 2024, the outstanding derivative finan-cial instruments are mainly forward exchange contracts with maturities of generally less than one year.
Where derivative financial instruments are used to economically hedge the foreign exchange exposure of recognized monetary assets or liabilities, no hedge accounting is applied. Changes in the fair value of these derivative financial instruments are recognized in profit or loss.
21.1.2 Foreign currency translation risk in the statement of financial position
When the functional currency of the entity that holds the investment is different from the functional currency of the related subsidiary, the currency fluctuations on the net investment directly affect other comprehensive income (\u2018Translation reserve\u2019).
All subsidiaries have as functional currency the currency of the country in which they operate. The currencies giving rise to the Group\u2019s translation risk in the statement of financial position are primarily the American dollar, Brazilian real, Indian roepie, Canadian dollar and Argentina peso.
Net investment in a foreign entity | ||
MILLION FOREIGN CURRENCY | December 31, 2023 | December 31, 2024 |
USD | 105 | 128 |
INR | 725 | 694 |
BRL | 53 | 62 |
CAD | 246 | 259 |
ARS | 1,973 | 2,383 |
The central treasury department monitors the translation exposure in the statement of financial position of the Group at least on a quarterly basis. The Treasury Committee proposes hedging actions to the Executive Management when the fluctuation of the cumulative translation result over the last twelve months (measured quarterly) moves more or less than 10% of the consolidated equity at the start of the reference period.
21.1.3 Foreign currency risk in profit or loss
Foreign currency risk in profit or loss includes both the risk of the variability of cash flows in respect of forecasted transactions as a result of changes in exchange rates and the risk that the profit (loss) for the year generated by foreign operations may vary in amount when translated into the presentation currency (euro). The central treasury department monitors and manages both risks simultaneously.
The Executive Management decides on the hedging policy of aforementioned currency exposures considering the market situation and upon proposal of the Treasury Committee. The objective of the Group\u2019s management of exposure in profit or loss is mainly to increase the predictability of results but also to allow the business to react to the chang-ing environment (e.g. by adapting prices or shifting production).
In the course of 2023, a change in hedging policy has been introduced related to forecasted exposure.
From 2024 budget onwards, forecasted exposure will be hedged for all material currencies. Material currencies are defined as all currencies with the highest potential impact of currency rate change in the profit or loss statement. The forecasted exposure will be covered up to 75% of the net forecasted exposure to the extent that hedge accounting treatment under IFRS 9 can be obtained.
This new approach increases the risk coverage and allows a focus on the impact of risk and amount.
Besides the change in scope, the timing of executing of the hedges has been updated. The hedges will be executed gradually within corridors that limit the loss or caps the benefit compared to the budgeted rate.
The currencies that primarily impact the net foreign currency exposure in profit or loss are American dollar, Chinese yuan, Australian dollar, Indian rupee, Japanese yen, Korean won and British Pound. These are defined as material currencies by treasury for forecasted exposure of 2024.
The Group uses forward exchange contracts to hedge its currency risk related to a forecasted exposure. These forward exchange contracts are designated as cash flow hedges. The Group designates only the spot element of forward foreign exchange contracts to hedge its foreign currency risk and applies a hedge ratio of 1:1. The forward element of forward exchange contracts is excluded from the designation of the hedging instrument and is separately accounted for in financial result. The Group\u2019s policy is to align the critical terms of the forward exchange contracts with the hedged item. The existence of an economic relationship between the hedged item and the hedging instrument is based on the currency, amount, and timing of the respective cash flows. The Group assesses whether the derivative designated in the hedging relationship is expected to be and has been effective in offsetting changes in cash flows using the hypothetical derivative method. Very little ineffectiveness is expected from these cash flow hedges. In these relationships, the main sources of ineffectiveness are the counterparty risk and the Group\u2019s own credit risk on the fair value of the forward exchange contracts which is not reflected in the fair value. Also changes in the timing of the hedged transactions can cause hedge ineffectiveness.
In the course of 2024, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in American dollar, Australian dollar, Chinese yuan, Indian rupee, Japanese yen, Korean won and British pound related to highly probable forecasted sales and purchases over the following 12 months.
In the course of 2023, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in American dollar, Australian dollar, Chinese yuan, Indian rupee, Japanese yen, Korean won and British pound related to highly probable forecasted sales and purchases over the following 12 months.
The portion of the gain on the forward exchange contracts that is determined to be an effective hedge is recognized directly in other comprehensive income (December 31, 2024: 0 million euro net of tax; December 31, 2023: 1 million euro net of tax).
During 2024, losses amounting to 0.4 million euro have been recognized in other comprehensive income. An amount of 1 million euro has been reclassified from other comprehensive income and has been added to turnover.
During 2023, gains amounting to 2 million euro have been recognized in other comprehensive income. An amount of 2 million euro has been reclassified from other comprehensive income and has been deducted from turnover.
A reconciliation in tabular format is provided in note 21.4 \u2018Summarizing table of cash flow hedge reserve.\u2019
The following table summarizes the effect of the cash flow hedges related to currency risk on the financial statements:
MILLION EURO | ||||||||||
2024 | ||||||||||
During the period - 2024 | ||||||||||
Nominal amount | ||||||||||
Carrying amount | ||||||||||
As-sets | ||||||||||
Lia-bili-ties | ||||||||||
Line item in statement of financial position where the hedging instrument is included | Changes in the value of the hedging instrument recognized in OCI | Hedge inef-fective-ness recog-nized in P and L | Line item in profit or loss that includes hedge ineffectiveness | |||||||
Amounts reclassi-fied from hedging reserve to profit or loss | Amounts reclassi-fied from hedging reserve to cost of inventory | Line item in profit or loss af-fected by the reclas-sification | ||||||||
Forward exchange contracts designated as cash flow hedges | 45 | - | - | Derivatives | - | - | Other finance expense | (1) | - | Revenue |
MILLION EURO | ||||||||||
2023 | ||||||||||
During the period - 2023 | ||||||||||
Nominal amount | ||||||||||
Carrying amount | ||||||||||
As-sets | ||||||||||
Lia-bili-ties | ||||||||||
Line item in statement of financial position where the hedging instrument is included | Changes in the value of the hedging instrument recognized in OCI | Hedge inef-fective-ness recog-nized in P and L | Line item in profit or loss that includes hedge ineffectiveness | |||||||
Amounts reclassi-fied from hedging reserve to profit or loss | Amounts reclassi-fied from hedging reserve to cost of inventory | Line item in profit or loss af-fected by the reclas-sification | ||||||||
Forward exchange contracts designated as cash flow hedges | 38 | 2.0 | - | Derivatives | 2 | - | Other finance expense | 2 | - | Revenue |
Cash flow hedges hedging its exposure in foreign currency have the following maturities:
2024 | Maturity | |||
1-3 months | 3-12 months | More than 1 year | ||
Forward exchange contracts designated as cash flow hedges | ||||
Nominal amounts net in millions of foreign currency | USD | 3 | 9 | - |
AUD | 2 | 2 | - | |
CNY | 23 | 69 | - | |
INR | 222 | 667 | - | |
JPY | 142 | 426 | - | |
KRW | 508 | 1,524 | - | |
GBP | 1 | 3 | - | |
Average EUR:USD forward contract rate | 1.05470 | 1.04970 | - | |
Average EUR:AUD forward contract rate | 1.64340 | 1.63640 | - | |
Average EUR:CNY forward contract rate | 7.63700 | 7.64500 | - | |
Average EUR:INR forward contract rate | 88.91800 | 92.05670 | - | |
Average EUR:JPY forward contract rate | 156.74240 | 155.47070 | - | |
Average EUR:KRW forward contract rate | 1,486.94000 | 1,493.38000 | - | |
Average EUR:GBP forward contract rate | 0.83198 | 0.84144 | - | |
2023 | ||||
Maturity | ||||
1-3 months | 3-12 months | More than 1 year | ||
Forward exchange contracts designated as cash flow hedges | ||||
Nominal amounts net in millions of foreign currency | USD | 9 | 23 | - |
AUD | 1 | 2 | - | |
CNY | 34 | 101 | - | |
INR | 425 | 1,276 | - | |
JPY | 250 | 751 | - | |
KRW | 426 | 1,279 | - | |
GBP | 1 | 2 | - | |
Average EUR:USD forward contract rate | 1.09000 | 1.08000 | - | |
Average EUR:AUD forward contract rate | 1.66000 | 1.68000 | - | |
Average EUR:CNY forward contract rate | 7.72000 | 7.69000 | - | |
Average EUR:INR forward contract rate | 90.12000 | 91.68000 | - | |
Average EUR:JPY forward contract rate | 158.88500 | 155.92000 | - | |
Average EUR:KRW forward contract rate | 1,425.69000 | 1,425.00000 | - | |
Average EUR:GBP forward contract rate | 0.88000 | 0.88000 | - |
21.1.4 Sensitivity analysis foreign currency risk
A strengthening/weakening of the euro by 10% against the currencies listed hereafter with all other variables held constant, would have increased (decreased) profit or loss by the amounts shown below. The analysis has been carried out on the budgeted net EBIT exposure by currency for the year 2024, net of the use of cash flow hedges.
MILLION EURO | ||||
Profit and loss | ||||
2023 | 2024 | |||
Strengthening of theeuro by 10% | Weakening of the euro by 10% | Strengthening of theeuro by 10% | Weakening of the euro by 10% | |
USD | (1.8) | 1.8 | 2.4 | (2.4) |
CNY | (6.8) | 6.8 | (1.8) | 1.8 |
GBP | 1.3 | (1.3) | 0.3 | (0.3) |
AUD | (0.8) | 0.8 | (0.7) | 0.7 |
INR | (3.7) | 3.7 | (1.8) | 1.8 |
KRW | (0.5) | 0.5 | (0.4) | 0.4 |
JPY | (1.3) | 1.3 | (0.5) | 0.5 |
With regard to cash flow hedges, a strengthening/weakening of the euro by 10% against the foreign currencies would have an impact to other comprehensive income of 4 million/(4) million euro. This analysis assumes that all other variables, in particular interest rates remain constant and ignores any impact of forecasted sales.
21.2 INTEREST RATE RISK
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Group\u2019s exposure to changes in interest rates primarily relates to the Group\u2019s net financial debt position, more specific to local cash balances held in foreign currencies, cash pooling accounts held in foreign currencies and financial lease liabilities held in foreign currencies. These foreign currencies change the interest rate profile. Drawdowns of the syndicated facility are done in euro.
For the most important currencies the following interest rate profile exists at the reporting date:
MILLION EURO | ||||
NET FINANCIAL DEBT by currency | ||||
2023 | 2024 | |||
Outstanding amount | Outstanding amount | Outstanding amount | Outstanding amount | |
At floating rate | At fixed rate | At floating rate | At fixed rate | |
EUR | 46 | - | 114 | - |
USD | 9 | - | 8 | - |
GBP | (4) | - | (5) | - |
CNY | (3) | - | (6) | - |
AUD | (3) | - | (1) | - |
JPY | 2 | - | 2 | - |
CAD | (24) | - | (23) | - |
KRW | (1) | - | (1) | - |
INR | (4) | - | (3) | - |
Other | (12) | - | 2 | - |
TOTAL | 6 | - | 87 | - |
NET FINANCIAL DEBT | 6 | 87 |
21.2.1. SENSITIVITY ANALYSISinterest rate risk
A change of 100 basis points in interest rates at December 31, 2024 would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
The analysis is performed on the same basis for 2023.
Profit and loss | ||
100 bp increase | 100 bp decrease | |
December 31, 2023 | ||
Net impact | (0.06) | 0.06 |
December 31, 2024 | ||
Net impact | (0.88) | 0.88 |
21.3. COMMODITY PRICE RISK
The Group\u2019s most important raw material exposures relate to silver. The Group\u2019s commodity price risk \u2013 i.e. the risk that its future cash flows and earnings may vary because of changed material prices \u2013 is highly connected with other factors such as the Group\u2019s competitive position within an industry, its relationship with customers and suppliers. The purchases of silver are not hedged.
21.3.1 Sensitivity analysiscommodity price risk
For 2024, the Group\u2019s exposed tonnage of silver is around 62 tons (2023: 70 tons). For 1 USD/troy change in the silver price, the impact on the Group\u2019s consolidated profit or loss statement is estimated at 1.8 million euro on a yearly basis (2023: 2.1 million euro). The analysis has been carried out on the actual exposed volume for the year 2024. The afore-mentioned Group\u2019s exposed tonnage of silver disregards the ability to partly charge its customers without existing silver clauses on the variability of the silver price.
21.4. Summarizing table of cash flow hedge RESERVE: currency risk
The following table provides a summary of the effect in accumulated other comprehensive income of cash flow hedges by type of risk:
Cash flow hedges related to currency risk | ||
2023 | 2024 | |
Other comprehensive income at January 1 | (2) | 1 |
Effective portion of changes in fair value booked in 'Other comprehensive income' | 2 | - |
Changes in fair value of cash flow hedges reclassified to turnover | 2 | (1) |
Adjustmentsfor amounts transferred to initial carrying amount of inventory\u00a0 | - | - |
Income taxes | - | - |
Other comprehensive income at December 31 | 1 | - |
There are no balances in hedge reserve related to hedge relationships for which hedge accounting is no longer applied.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMarketRiskExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__50-1": { "value": "21. MARKET RISK
21.1 FOREIGN CURRENCY RISK
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The foreign currency risk management distinguishes between three types of foreign currency risk: foreign currency transaction risk, foreign currency translation risk and foreign currency eco-nomic risk.
The Group incurs foreign currency transaction risk on accounts receivable, accounts payable and other monetary items that are denominated in a currency other than the Company\u2019s functional currency. Foreign currency transac-tion risk in the Group\u2019s operations also arises from the variability of cash flows in respect of forecasted transactions.
Foreign operations which do not have the euro as their functional currency give rise to a translation risk.
The foreign currency economic risk is the risk that future cash flows and earnings generated by foreign operations may vary. Foreign currency economic risk is highly connected with other factors such as the foreign operations\u2019 com-petitive position within an industry, its relationship with customers and suppliers.
In monitoring the foreign currency risk exposures, the central treasury department focuses on the transaction and translation risk exposures whereas business management seeks to manage the foreign economic risk through natural hedges.
Each of the above types of foreign currency risk exposure impacts the financial statements differently. The following significant exchange rates have been applied:
Yearly average rate | Year-end closing rate\u00a0 | |||
2023 | 2024 | 2023 | 2024 | |
EUR/USD | 1.08158 | 1.082055 | 1.105 | 1.0389 |
EUR/GBP | 0.869907 | 0.846592 | 0.86905 | 0.82918 |
EUR/CNY | 7.65907 | 7.78626 | 7.8509 | 7.5833 |
EUR/AUD | 1.628477 | 1.639944 | 1.6263 | 1.6772 |
EUR/CAD | 1.459581 | 1.481909 | 1.4642 | 1.4948 |
EUR/JPY | 151.942108 | 163.817355 | 156.33 | 163.06 |
EUR/INR | 89.324864 | 90.530736 | 91.9045 | 88.9335 |
EUR/KRW | 1,413.264 | 1,475.256 | 1,433.66 | 1,532.15 |
The central treasury department monitors and manages foreign currency exposure from the view of its impact on either the statement of financial position or profit or loss.
21.1.1 Foreign currency transaction risk in the statement of financial position
The currencies that primarily impact the net foreign currency exposure on the statement of financial position are as follows:
MILLION FOREIGN CURRENCY | Net exposure of receivablesand payables | Hedging | Net position | |
Cash, cash equivalents loans and deposits | Derivative financial instruments | |||
December 31, 2023 | ||||
USD | 35.5 | 21.3 | (51.2) | 5.6 |
CNY | 40.6 | (52.2) | - | (11.6) |
GBP | 3.7 | 5.3 | - | 9.0 |
AUD | 1.1 | (1.1) | - | - |
INR | 583.4 | - | (611.0) | (27.6) |
JPY | 680.4 | (519.0) | - | 161.4 |
KRW | 829.8 | - | (932.0) | (102.2) |
December 31, 2024 | ||||
USD | 15.5 | 53.1 | (59.4) | 9.1 |
CNY | (18.1) | (10.4) | - | (28.5) |
GBP | 5.0 | (3.8) | - | 1.2 |
AUD | 1.0 | (0.4) | - | 0.6 |
INR | 703.8 | - | (780.6) | (76.8) |
JPY | 625.3 | (580.0) | - | 45.3 |
KRW | 1,521.6 | - | (2,213.1) | (691.5) |
The Group uses cash, cash equivalents, loans and deposits held in a foreign currency as natural hedges of the net exposure of receivables and payables held in these respective currencies.
The aim of Group\u2019s management regarding transaction exposure in the statement of financial position is to minimize, over the short term, the revaluation results \u2013 both realized and unrealized \u2013 of items in the statement of financial position that are denominated in a currency other than the Company\u2019s functional currency.
In order to keep the exposures within predefined risk adjusted limits, the central treasury department economically hedges the net outstanding monetary items in the statement of financial position in foreign currency using derivative financial instruments such as forward exchange contracts. As of December 31, 2024, the outstanding derivative finan-cial instruments are mainly forward exchange contracts with maturities of generally less than one year.
Where derivative financial instruments are used to economically hedge the foreign exchange exposure of recognized monetary assets or liabilities, no hedge accounting is applied. Changes in the fair value of these derivative financial instruments are recognized in profit or loss.
21.1.2 Foreign currency translation risk in the statement of financial position
When the functional currency of the entity that holds the investment is different from the functional currency of the related subsidiary, the currency fluctuations on the net investment directly affect other comprehensive income (\u2018Translation reserve\u2019).
All subsidiaries have as functional currency the currency of the country in which they operate. The currencies giving rise to the Group\u2019s translation risk in the statement of financial position are primarily the American dollar, Brazilian real, Indian roepie, Canadian dollar and Argentina peso.
Net investment in a foreign entity | ||
MILLION FOREIGN CURRENCY | December 31, 2023 | December 31, 2024 |
USD | 105 | 128 |
INR | 725 | 694 |
BRL | 53 | 62 |
CAD | 246 | 259 |
ARS | 1,973 | 2,383 |
The central treasury department monitors the translation exposure in the statement of financial position of the Group at least on a quarterly basis. The Treasury Committee proposes hedging actions to the Executive Management when the fluctuation of the cumulative translation result over the last twelve months (measured quarterly) moves more or less than 10% of the consolidated equity at the start of the reference period.
21.1.3 Foreign currency risk in profit or loss
Foreign currency risk in profit or loss includes both the risk of the variability of cash flows in respect of forecasted transactions as a result of changes in exchange rates and the risk that the profit (loss) for the year generated by foreign operations may vary in amount when translated into the presentation currency (euro). The central treasury department monitors and manages both risks simultaneously.
The Executive Management decides on the hedging policy of aforementioned currency exposures considering the market situation and upon proposal of the Treasury Committee. The objective of the Group\u2019s management of exposure in profit or loss is mainly to increase the predictability of results but also to allow the business to react to the chang-ing environment (e.g. by adapting prices or shifting production).
In the course of 2023, a change in hedging policy has been introduced related to forecasted exposure.
From 2024 budget onwards, forecasted exposure will be hedged for all material currencies. Material currencies are defined as all currencies with the highest potential impact of currency rate change in the profit or loss statement. The forecasted exposure will be covered up to 75% of the net forecasted exposure to the extent that hedge accounting treatment under IFRS 9 can be obtained.
This new approach increases the risk coverage and allows a focus on the impact of risk and amount.
Besides the change in scope, the timing of executing of the hedges has been updated. The hedges will be executed gradually within corridors that limit the loss or caps the benefit compared to the budgeted rate.
The currencies that primarily impact the net foreign currency exposure in profit or loss are American dollar, Chinese yuan, Australian dollar, Indian rupee, Japanese yen, Korean won and British Pound. These are defined as material currencies by treasury for forecasted exposure of 2024.
The Group uses forward exchange contracts to hedge its currency risk related to a forecasted exposure. These forward exchange contracts are designated as cash flow hedges. The Group designates only the spot element of forward foreign exchange contracts to hedge its foreign currency risk and applies a hedge ratio of 1:1. The forward element of forward exchange contracts is excluded from the designation of the hedging instrument and is separately accounted for in financial result. The Group\u2019s policy is to align the critical terms of the forward exchange contracts with the hedged item. The existence of an economic relationship between the hedged item and the hedging instrument is based on the currency, amount, and timing of the respective cash flows. The Group assesses whether the derivative designated in the hedging relationship is expected to be and has been effective in offsetting changes in cash flows using the hypothetical derivative method. Very little ineffectiveness is expected from these cash flow hedges. In these relationships, the main sources of ineffectiveness are the counterparty risk and the Group\u2019s own credit risk on the fair value of the forward exchange contracts which is not reflected in the fair value. Also changes in the timing of the hedged transactions can cause hedge ineffectiveness.
In the course of 2024, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in American dollar, Australian dollar, Chinese yuan, Indian rupee, Japanese yen, Korean won and British pound related to highly probable forecasted sales and purchases over the following 12 months.
In the course of 2023, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in American dollar, Australian dollar, Chinese yuan, Indian rupee, Japanese yen, Korean won and British pound related to highly probable forecasted sales and purchases over the following 12 months.
The portion of the gain on the forward exchange contracts that is determined to be an effective hedge is recognized directly in other comprehensive income (December 31, 2024: 0 million euro net of tax; December 31, 2023: 1 million euro net of tax).
During 2024, losses amounting to 0.4 million euro have been recognized in other comprehensive income. An amount of 1 million euro has been reclassified from other comprehensive income and has been added to turnover.
During 2023, gains amounting to 2 million euro have been recognized in other comprehensive income. An amount of 2 million euro has been reclassified from other comprehensive income and has been deducted from turnover.
A reconciliation in tabular format is provided in note 21.4 \u2018Summarizing table of cash flow hedge reserve.\u2019
The following table summarizes the effect of the cash flow hedges related to currency risk on the financial statements:
MILLION EURO | ||||||||||
2024 | ||||||||||
During the period - 2024 | ||||||||||
Nominal amount | ||||||||||
Carrying amount | ||||||||||
As-sets | ||||||||||
Lia-bili-ties | ||||||||||
Line item in statement of financial position where the hedging instrument is included | Changes in the value of the hedging instrument recognized in OCI | Hedge inef-fective-ness recog-nized in P and L | Line item in profit or loss that includes hedge ineffectiveness | |||||||
Amounts reclassi-fied from hedging reserve to profit or loss | Amounts reclassi-fied from hedging reserve to cost of inventory | Line item in profit or loss af-fected by the reclas-sification | ||||||||
Forward exchange contracts designated as cash flow hedges | 45 | - | - | Derivatives | - | - | Other finance expense | (1) | - | Revenue |
MILLION EURO | ||||||||||
2023 | ||||||||||
During the period - 2023 | ||||||||||
Nominal amount | ||||||||||
Carrying amount | ||||||||||
As-sets | ||||||||||
Lia-bili-ties | ||||||||||
Line item in statement of financial position where the hedging instrument is included | Changes in the value of the hedging instrument recognized in OCI | Hedge inef-fective-ness recog-nized in P and L | Line item in profit or loss that includes hedge ineffectiveness | |||||||
Amounts reclassi-fied from hedging reserve to profit or loss | Amounts reclassi-fied from hedging reserve to cost of inventory | Line item in profit or loss af-fected by the reclas-sification | ||||||||
Forward exchange contracts designated as cash flow hedges | 38 | 2.0 | - | Derivatives | 2 | - | Other finance expense | 2 | - | Revenue |
Cash flow hedges hedging its exposure in foreign currency have the following maturities:
2024 | Maturity | |||
1-3 months | 3-12 months | More than 1 year | ||
Forward exchange contracts designated as cash flow hedges | ||||
Nominal amounts net in millions of foreign currency | USD | 3 | 9 | - |
AUD | 2 | 2 | - | |
CNY | 23 | 69 | - | |
INR | 222 | 667 | - | |
JPY | 142 | 426 | - | |
KRW | 508 | 1,524 | - | |
GBP | 1 | 3 | - | |
Average EUR:USD forward contract rate | 1.05470 | 1.04970 | - | |
Average EUR:AUD forward contract rate | 1.64340 | 1.63640 | - | |
Average EUR:CNY forward contract rate | 7.63700 | 7.64500 | - | |
Average EUR:INR forward contract rate | 88.91800 | 92.05670 | - | |
Average EUR:JPY forward contract rate | 156.74240 | 155.47070 | - | |
Average EUR:KRW forward contract rate | 1,486.94000 | 1,493.38000 | - | |
Average EUR:GBP forward contract rate | 0.83198 | 0.84144 | - | |
2023 | ||||
Maturity | ||||
1-3 months | 3-12 months | More than 1 year | ||
Forward exchange contracts designated as cash flow hedges | ||||
Nominal amounts net in millions of foreign currency | USD | 9 | 23 | - |
AUD | 1 | 2 | - | |
CNY | 34 | 101 | - | |
INR | 425 | 1,276 | - | |
JPY | 250 | 751 | - | |
KRW | 426 | 1,279 | - | |
GBP | 1 | 2 | - | |
Average EUR:USD forward contract rate | 1.09000 | 1.08000 | - | |
Average EUR:AUD forward contract rate | 1.66000 | 1.68000 | - | |
Average EUR:CNY forward contract rate | 7.72000 | 7.69000 | - | |
Average EUR:INR forward contract rate | 90.12000 | 91.68000 | - | |
Average EUR:JPY forward contract rate | 158.88500 | 155.92000 | - | |
Average EUR:KRW forward contract rate | 1,425.69000 | 1,425.00000 | - | |
Average EUR:GBP forward contract rate | 0.88000 | 0.88000 | - |
21.1.4 Sensitivity analysis foreign currency risk
A strengthening/weakening of the euro by 10% against the currencies listed hereafter with all other variables held constant, would have increased (decreased) profit or loss by the amounts shown below. The analysis has been carried out on the budgeted net EBIT exposure by currency for the year 2024, net of the use of cash flow hedges.
MILLION EURO | ||||
Profit and loss | ||||
2023 | 2024 | |||
Strengthening of theeuro by 10% | Weakening of the euro by 10% | Strengthening of theeuro by 10% | Weakening of the euro by 10% | |
USD | (1.8) | 1.8 | 2.4 | (2.4) |
CNY | (6.8) | 6.8 | (1.8) | 1.8 |
GBP | 1.3 | (1.3) | 0.3 | (0.3) |
AUD | (0.8) | 0.8 | (0.7) | 0.7 |
INR | (3.7) | 3.7 | (1.8) | 1.8 |
KRW | (0.5) | 0.5 | (0.4) | 0.4 |
JPY | (1.3) | 1.3 | (0.5) | 0.5 |
With regard to cash flow hedges, a strengthening/weakening of the euro by 10% against the foreign currencies would have an impact to other comprehensive income of 4 million/(4) million euro. This analysis assumes that all other variables, in particular interest rates remain constant and ignores any impact of forecasted sales.
21.2 INTEREST RATE RISK
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Group\u2019s exposure to changes in interest rates primarily relates to the Group\u2019s net financial debt position, more specific to local cash balances held in foreign currencies, cash pooling accounts held in foreign currencies and financial lease liabilities held in foreign currencies. These foreign currencies change the interest rate profile. Drawdowns of the syndicated facility are done in euro.
For the most important currencies the following interest rate profile exists at the reporting date:
MILLION EURO | ||||
NET FINANCIAL DEBT by currency | ||||
2023 | 2024 | |||
Outstanding amount | Outstanding amount | Outstanding amount | Outstanding amount | |
At floating rate | At fixed rate | At floating rate | At fixed rate | |
EUR | 46 | - | 114 | - |
USD | 9 | - | 8 | - |
GBP | (4) | - | (5) | - |
CNY | (3) | - | (6) | - |
AUD | (3) | - | (1) | - |
JPY | 2 | - | 2 | - |
CAD | (24) | - | (23) | - |
KRW | (1) | - | (1) | - |
INR | (4) | - | (3) | - |
Other | (12) | - | 2 | - |
TOTAL | 6 | - | 87 | - |
NET FINANCIAL DEBT | 6 | 87 |
21.2.1. SENSITIVITY ANALYSISinterest rate risk
A change of 100 basis points in interest rates at December 31, 2024 would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
The analysis is performed on the same basis for 2023.
Profit and loss | ||
100 bp increase | 100 bp decrease | |
December 31, 2023 | ||
Net impact | (0.06) | 0.06 |
December 31, 2024 | ||
Net impact | (0.88) | 0.88 |
21.3. COMMODITY PRICE RISK
The Group\u2019s most important raw material exposures relate to silver. The Group\u2019s commodity price risk \u2013 i.e. the risk that its future cash flows and earnings may vary because of changed material prices \u2013 is highly connected with other factors such as the Group\u2019s competitive position within an industry, its relationship with customers and suppliers. The purchases of silver are not hedged.
21.3.1 Sensitivity analysiscommodity price risk
For 2024, the Group\u2019s exposed tonnage of silver is around 62 tons (2023: 70 tons). For 1 USD/troy change in the silver price, the impact on the Group\u2019s consolidated profit or loss statement is estimated at 1.8 million euro on a yearly basis (2023: 2.1 million euro). The analysis has been carried out on the actual exposed volume for the year 2024. The afore-mentioned Group\u2019s exposed tonnage of silver disregards the ability to partly charge its customers without existing silver clauses on the variability of the silver price.
21.4. Summarizing table of cash flow hedge RESERVE: currency risk
The following table provides a summary of the effect in accumulated other comprehensive income of cash flow hedges by type of risk:
Cash flow hedges related to currency risk | ||
2023 | 2024 | |
Other comprehensive income at January 1 | (2) | 1 |
Effective portion of changes in fair value booked in 'Other comprehensive income' | 2 | - |
Changes in fair value of cash flow hedges reclassified to turnover | 2 | (1) |
Adjustmentsfor amounts transferred to initial carrying amount of inventory\u00a0 | - | - |
Income taxes | - | - |
Other comprehensive income at December 31 | 1 | - |
There are no balances in hedge reserve related to hedge relationships for which hedge accounting is no longer applied.
37.3 REVALUATION RESERVE
The revaluation reserve comprises the revaluation of the Group\u2019s investment in Digital Illustrate Inc. which is irrevocably designated at fair value through OCI and will subsequently not be recycled to profit or loss. The Group made this classification as it intends to hold the investment over a long period for strategic purposes.
37.5 NET AMOUNT OF REMEASUREMENTS OF THE NET DEFINED BENEFIT LIABILITY RECORDED IN EQUITY
The net amount of remeasurements of the net defined benefit liability recorded in equity, comprises actuarial gains and losses resulting from the remesurement of the net defined benefit obligation and related plan assets, net of taxes.
These actuarial gains and losses originate from:
adjustmentsof the gross pension liability from experience gains or losses on plan liabilities, i.e. the effects of differences between the previous actuarial assumptions and what has actually occurred (e.g. changes in membership);
changes in demographic assumptions (e.g. mortality tables);
changes in financial assumptions (e.g. discount rate, price inflation);
differences in returns on plan assets excluding interest income calculated at the applicable discount rate.
The main part of the \u2018Net amount of remeasurements of the net defined benefit liability recorded in equity\u2019 originates from the first application of IAS 19 (revised 2011). The amendment to IAS 19 (revised 2011) have had a significant impact on the Group\u2019s consolidated equity and total comprehensive income. With this revision of IAS 19, the \u2018corridor\u2019 method, which allowed to defer the recognition of actuarial gains and losses over multiple accounting periods was eliminated. Under the new IAS 19, the net liability of the defined benefit plan had to be recognized in full at once and changes to the defined benefit obligation arising from actuarial assumptions are to be recognized in OCI. Also the interest cost and expected return on assets was replaced with a net interest amount that is calculated by applying the discount rate that is used to determine the net defined benefit liability. The difference between the interest income on plan assets and interest cost on the defined benefit obligation is included in OCI. At first application in 2013, com-parative data for 2012 have been restated. As at January 1, 2012, an amount of 704 million euro was booked in equity, 687 million euro related to Belgium, Germany, UK and USA called \u2018material countries\u2019 and 17 million euro related to other countries called \u2018non-material countries\u2019.
The following table presents the effect of the changes in accounting policy (restated opening balance at January 1, 2012) and the funded status for material countries and for comparative reasons the funded status per December 31, 2024:
million Euro\u00a0 | ||||||||
Belgium/Germany/UK/USA - Defined Benefit plans (excluding Belgian Defined Contribution plans) | ||||||||
Funded status and unrecognized actuarial losses as per January 1, 2012 | Funded status December 31, 2024 | |||||||
DBO | Plan assets | Funded status | Unrecognized acruarial losses | Net liability\u00a0 | DBO | Plan assets | Funded status | |
Belgium | 380 | (326) | 54 | (145) | (91) | 340 | (369) | (29) |
Germany | 637 | - | 636 | (135) | 501 | 417 | - | 417 |
UK | 421 | (274) | 147 | (200) | (52) | 305 | (320) | (15) |
USA | 589 | (335) | 254 | (207) | 47 | 74 | (59) | 15 |
Total\u00a0 | 2,027 | (936) | 1,091 | (687)\u00a0(1) | 404 | 1,136 | (748) | 388 |
(1) Following 1st time application fully recognized in OCI |
The evolution of the remeasurements booked in OCI since first application, which is related to material countries (DB-plans and DC-plans) amounts to (195) million euro, from (687) million euro at December 31, 2011 to (882) million euro at December 31, 2024 (see table below). This evolution is explained as follows:
Experience adjustments, i.e. the effects of differences between the previous actuarial assumptions and what has actually occurred such as changes in membership: 96 million euro
Changes in demographic assumptions: 78 million euro
Changes in financial assumptions: (350) million euro
Changes in return on plan assets excluding interest income: (10) million euro
Tax impact on remeasurements of material countries: (4) million euro
Reclassification of remeasurements to retained earnings of entities disposed off or liquidated: (4) million euro
All remeasurements as from January 1, 2012, remain in the equity caption \u2018Net amount of remeasurements of the net defined benefit liability recorded in equity\u2019 unless they are part of discontinued operations. Remeasurements related to discontinued operations are reclassified to retained earnings (2024: 1 million euro; 2023: (6) million euro).
The evolution for the year 2024 is as follows:
MILLION EURO | December 31, 2023 | Net amount of remeasurements of the net definedbenefit liability recorded in equity | Transfer of net amount of remeasurements on the defined benefit liability recorded in equity to retained earnings related to entities divested\u00a0 | Tax impact | December 31, 2024 |
Note 13 | Note 17.4 | ||||
Net amount of remeasurements of the net defined benefit liability recorded in equity | |||||
Related to material countries | (901) | 19 | - | - | (882) |
Related to non-material countries | (25) | - | 1 | - | (24) |
TOTAL | (926) | 19 | 1 | - | (906) |
The movement of the year, net of tax amounts is an increase of 19 million euro, explained by:
Experience losses on pension liabilities: (23) million euro
Actuarial gains from changes in financial assumptions: 25 million euro
Actuarial gains from return on plan assets excluding interest income: 17 million euro
Further information is provided in note 13.
In 2024, no deferred taxes related to the effects of remeasurements have been recognized in \u2018Other comprehensive income\u2019 (2023: 3 million euro).
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__51-1": { "value": "21. MARKET RISK
21.1 FOREIGN CURRENCY RISK
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in foreign exchange rates. The foreign currency risk management distinguishes between three types of foreign currency risk: foreign currency transaction risk, foreign currency translation risk and foreign currency eco-nomic risk.
The Group incurs foreign currency transaction risk on accounts receivable, accounts payable and other monetary items that are denominated in a currency other than the Company\u2019s functional currency. Foreign currency transac-tion risk in the Group\u2019s operations also arises from the variability of cash flows in respect of forecasted transactions.
Foreign operations which do not have the euro as their functional currency give rise to a translation risk.
The foreign currency economic risk is the risk that future cash flows and earnings generated by foreign operations may vary. Foreign currency economic risk is highly connected with other factors such as the foreign operations\u2019 com-petitive position within an industry, its relationship with customers and suppliers.
In monitoring the foreign currency risk exposures, the central treasury department focuses on the transaction and translation risk exposures whereas business management seeks to manage the foreign economic risk through natural hedges.
Each of the above types of foreign currency risk exposure impacts the financial statements differently. The following significant exchange rates have been applied:
Yearly average rate | Year-end closing rate\u00a0 | |||
2023 | 2024 | 2023 | 2024 | |
EUR/USD | 1.08158 | 1.082055 | 1.105 | 1.0389 |
EUR/GBP | 0.869907 | 0.846592 | 0.86905 | 0.82918 |
EUR/CNY | 7.65907 | 7.78626 | 7.8509 | 7.5833 |
EUR/AUD | 1.628477 | 1.639944 | 1.6263 | 1.6772 |
EUR/CAD | 1.459581 | 1.481909 | 1.4642 | 1.4948 |
EUR/JPY | 151.942108 | 163.817355 | 156.33 | 163.06 |
EUR/INR | 89.324864 | 90.530736 | 91.9045 | 88.9335 |
EUR/KRW | 1,413.264 | 1,475.256 | 1,433.66 | 1,532.15 |
The central treasury department monitors and manages foreign currency exposure from the view of its impact on either the statement of financial position or profit or loss.
21.1.1 Foreign currency transaction risk in the statement of financial position
The currencies that primarily impact the net foreign currency exposure on the statement of financial position are as follows:
MILLION FOREIGN CURRENCY | Net exposure of receivablesand payables | Hedging | Net position | |
Cash, cash equivalents loans and deposits | Derivative financial instruments | |||
December 31, 2023 | ||||
USD | 35.5 | 21.3 | (51.2) | 5.6 |
CNY | 40.6 | (52.2) | - | (11.6) |
GBP | 3.7 | 5.3 | - | 9.0 |
AUD | 1.1 | (1.1) | - | - |
INR | 583.4 | - | (611.0) | (27.6) |
JPY | 680.4 | (519.0) | - | 161.4 |
KRW | 829.8 | - | (932.0) | (102.2) |
December 31, 2024 | ||||
USD | 15.5 | 53.1 | (59.4) | 9.1 |
CNY | (18.1) | (10.4) | - | (28.5) |
GBP | 5.0 | (3.8) | - | 1.2 |
AUD | 1.0 | (0.4) | - | 0.6 |
INR | 703.8 | - | (780.6) | (76.8) |
JPY | 625.3 | (580.0) | - | 45.3 |
KRW | 1,521.6 | - | (2,213.1) | (691.5) |
The Group uses cash, cash equivalents, loans and deposits held in a foreign currency as natural hedges of the net exposure of receivables and payables held in these respective currencies.
The aim of Group\u2019s management regarding transaction exposure in the statement of financial position is to minimize, over the short term, the revaluation results \u2013 both realized and unrealized \u2013 of items in the statement of financial position that are denominated in a currency other than the Company\u2019s functional currency.
In order to keep the exposures within predefined risk adjusted limits, the central treasury department economically hedges the net outstanding monetary items in the statement of financial position in foreign currency using derivative financial instruments such as forward exchange contracts. As of December 31, 2024, the outstanding derivative finan-cial instruments are mainly forward exchange contracts with maturities of generally less than one year.
Where derivative financial instruments are used to economically hedge the foreign exchange exposure of recognized monetary assets or liabilities, no hedge accounting is applied. Changes in the fair value of these derivative financial instruments are recognized in profit or loss.
21.1.2 Foreign currency translation risk in the statement of financial position
When the functional currency of the entity that holds the investment is different from the functional currency of the related subsidiary, the currency fluctuations on the net investment directly affect other comprehensive income (\u2018Translation reserve\u2019).
All subsidiaries have as functional currency the currency of the country in which they operate. The currencies giving rise to the Group\u2019s translation risk in the statement of financial position are primarily the American dollar, Brazilian real, Indian roepie, Canadian dollar and Argentina peso.
Net investment in a foreign entity | ||
MILLION FOREIGN CURRENCY | December 31, 2023 | December 31, 2024 |
USD | 105 | 128 |
INR | 725 | 694 |
BRL | 53 | 62 |
CAD | 246 | 259 |
ARS | 1,973 | 2,383 |
The central treasury department monitors the translation exposure in the statement of financial position of the Group at least on a quarterly basis. The Treasury Committee proposes hedging actions to the Executive Management when the fluctuation of the cumulative translation result over the last twelve months (measured quarterly) moves more or less than 10% of the consolidated equity at the start of the reference period.
21.1.3 Foreign currency risk in profit or loss
Foreign currency risk in profit or loss includes both the risk of the variability of cash flows in respect of forecasted transactions as a result of changes in exchange rates and the risk that the profit (loss) for the year generated by foreign operations may vary in amount when translated into the presentation currency (euro). The central treasury department monitors and manages both risks simultaneously.
The Executive Management decides on the hedging policy of aforementioned currency exposures considering the market situation and upon proposal of the Treasury Committee. The objective of the Group\u2019s management of exposure in profit or loss is mainly to increase the predictability of results but also to allow the business to react to the chang-ing environment (e.g. by adapting prices or shifting production).
In the course of 2023, a change in hedging policy has been introduced related to forecasted exposure.
From 2024 budget onwards, forecasted exposure will be hedged for all material currencies. Material currencies are defined as all currencies with the highest potential impact of currency rate change in the profit or loss statement. The forecasted exposure will be covered up to 75% of the net forecasted exposure to the extent that hedge accounting treatment under IFRS 9 can be obtained.
This new approach increases the risk coverage and allows a focus on the impact of risk and amount.
Besides the change in scope, the timing of executing of the hedges has been updated. The hedges will be executed gradually within corridors that limit the loss or caps the benefit compared to the budgeted rate.
The currencies that primarily impact the net foreign currency exposure in profit or loss are American dollar, Chinese yuan, Australian dollar, Indian rupee, Japanese yen, Korean won and British Pound. These are defined as material currencies by treasury for forecasted exposure of 2024.
The Group uses forward exchange contracts to hedge its currency risk related to a forecasted exposure. These forward exchange contracts are designated as cash flow hedges. The Group designates only the spot element of forward foreign exchange contracts to hedge its foreign currency risk and applies a hedge ratio of 1:1. The forward element of forward exchange contracts is excluded from the designation of the hedging instrument and is separately accounted for in financial result. The Group\u2019s policy is to align the critical terms of the forward exchange contracts with the hedged item. The existence of an economic relationship between the hedged item and the hedging instrument is based on the currency, amount, and timing of the respective cash flows. The Group assesses whether the derivative designated in the hedging relationship is expected to be and has been effective in offsetting changes in cash flows using the hypothetical derivative method. Very little ineffectiveness is expected from these cash flow hedges. In these relationships, the main sources of ineffectiveness are the counterparty risk and the Group\u2019s own credit risk on the fair value of the forward exchange contracts which is not reflected in the fair value. Also changes in the timing of the hedged transactions can cause hedge ineffectiveness.
In the course of 2024, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in American dollar, Australian dollar, Chinese yuan, Indian rupee, Japanese yen, Korean won and British pound related to highly probable forecasted sales and purchases over the following 12 months.
In the course of 2023, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in American dollar, Australian dollar, Chinese yuan, Indian rupee, Japanese yen, Korean won and British pound related to highly probable forecasted sales and purchases over the following 12 months.
The portion of the gain on the forward exchange contracts that is determined to be an effective hedge is recognized directly in other comprehensive income (December 31, 2024: 0 million euro net of tax; December 31, 2023: 1 million euro net of tax).
During 2024, losses amounting to 0.4 million euro have been recognized in other comprehensive income. An amount of 1 million euro has been reclassified from other comprehensive income and has been added to turnover.
During 2023, gains amounting to 2 million euro have been recognized in other comprehensive income. An amount of 2 million euro has been reclassified from other comprehensive income and has been deducted from turnover.
A reconciliation in tabular format is provided in note 21.4 \u2018Summarizing table of cash flow hedge reserve.\u2019
The following table summarizes the effect of the cash flow hedges related to currency risk on the financial statements:
MILLION EURO | ||||||||||
2024 | ||||||||||
During the period - 2024 | ||||||||||
Nominal amount | ||||||||||
Carrying amount | ||||||||||
As-sets | ||||||||||
Lia-bili-ties | ||||||||||
Line item in statement of financial position where the hedging instrument is included | Changes in the value of the hedging instrument recognized in OCI | Hedge inef-fective-ness recog-nized in P and L | Line item in profit or loss that includes hedge ineffectiveness | |||||||
Amounts reclassi-fied from hedging reserve to profit or loss | Amounts reclassi-fied from hedging reserve to cost of inventory | Line item in profit or loss af-fected by the reclas-sification | ||||||||
Forward exchange contracts designated as cash flow hedges | 45 | - | - | Derivatives | - | - | Other finance expense | (1) | - | Revenue |
MILLION EURO | ||||||||||
2023 | ||||||||||
During the period - 2023 | ||||||||||
Nominal amount | ||||||||||
Carrying amount | ||||||||||
As-sets | ||||||||||
Lia-bili-ties | ||||||||||
Line item in statement of financial position where the hedging instrument is included | Changes in the value of the hedging instrument recognized in OCI | Hedge inef-fective-ness recog-nized in P and L | Line item in profit or loss that includes hedge ineffectiveness | |||||||
Amounts reclassi-fied from hedging reserve to profit or loss | Amounts reclassi-fied from hedging reserve to cost of inventory | Line item in profit or loss af-fected by the reclas-sification | ||||||||
Forward exchange contracts designated as cash flow hedges | 38 | 2.0 | - | Derivatives | 2 | - | Other finance expense | 2 | - | Revenue |
Cash flow hedges hedging its exposure in foreign currency have the following maturities:
2024 | Maturity | |||
1-3 months | 3-12 months | More than 1 year | ||
Forward exchange contracts designated as cash flow hedges | ||||
Nominal amounts net in millions of foreign currency | USD | 3 | 9 | - |
AUD | 2 | 2 | - | |
CNY | 23 | 69 | - | |
INR | 222 | 667 | - | |
JPY | 142 | 426 | - | |
KRW | 508 | 1,524 | - | |
GBP | 1 | 3 | - | |
Average EUR:USD forward contract rate | 1.05470 | 1.04970 | - | |
Average EUR:AUD forward contract rate | 1.64340 | 1.63640 | - | |
Average EUR:CNY forward contract rate | 7.63700 | 7.64500 | - | |
Average EUR:INR forward contract rate | 88.91800 | 92.05670 | - | |
Average EUR:JPY forward contract rate | 156.74240 | 155.47070 | - | |
Average EUR:KRW forward contract rate | 1,486.94000 | 1,493.38000 | - | |
Average EUR:GBP forward contract rate | 0.83198 | 0.84144 | - | |
2023 | ||||
Maturity | ||||
1-3 months | 3-12 months | More than 1 year | ||
Forward exchange contracts designated as cash flow hedges | ||||
Nominal amounts net in millions of foreign currency | USD | 9 | 23 | - |
AUD | 1 | 2 | - | |
CNY | 34 | 101 | - | |
INR | 425 | 1,276 | - | |
JPY | 250 | 751 | - | |
KRW | 426 | 1,279 | - | |
GBP | 1 | 2 | - | |
Average EUR:USD forward contract rate | 1.09000 | 1.08000 | - | |
Average EUR:AUD forward contract rate | 1.66000 | 1.68000 | - | |
Average EUR:CNY forward contract rate | 7.72000 | 7.69000 | - | |
Average EUR:INR forward contract rate | 90.12000 | 91.68000 | - | |
Average EUR:JPY forward contract rate | 158.88500 | 155.92000 | - | |
Average EUR:KRW forward contract rate | 1,425.69000 | 1,425.00000 | - | |
Average EUR:GBP forward contract rate | 0.88000 | 0.88000 | - |
21.1.4 Sensitivity analysis foreign currency risk
A strengthening/weakening of the euro by 10% against the currencies listed hereafter with all other variables held constant, would have increased (decreased) profit or loss by the amounts shown below. The analysis has been carried out on the budgeted net EBIT exposure by currency for the year 2024, net of the use of cash flow hedges.
MILLION EURO | ||||
Profit and loss | ||||
2023 | 2024 | |||
Strengthening of theeuro by 10% | Weakening of the euro by 10% | Strengthening of theeuro by 10% | Weakening of the euro by 10% | |
USD | (1.8) | 1.8 | 2.4 | (2.4) |
CNY | (6.8) | 6.8 | (1.8) | 1.8 |
GBP | 1.3 | (1.3) | 0.3 | (0.3) |
AUD | (0.8) | 0.8 | (0.7) | 0.7 |
INR | (3.7) | 3.7 | (1.8) | 1.8 |
KRW | (0.5) | 0.5 | (0.4) | 0.4 |
JPY | (1.3) | 1.3 | (0.5) | 0.5 |
With regard to cash flow hedges, a strengthening/weakening of the euro by 10% against the foreign currencies would have an impact to other comprehensive income of 4 million/(4) million euro. This analysis assumes that all other variables, in particular interest rates remain constant and ignores any impact of forecasted sales.
21.2 INTEREST RATE RISK
Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate due to changes in market interest rates. The Group\u2019s exposure to changes in interest rates primarily relates to the Group\u2019s net financial debt position, more specific to local cash balances held in foreign currencies, cash pooling accounts held in foreign currencies and financial lease liabilities held in foreign currencies. These foreign currencies change the interest rate profile. Drawdowns of the syndicated facility are done in euro.
For the most important currencies the following interest rate profile exists at the reporting date:
MILLION EURO | ||||
NET FINANCIAL DEBT by currency | ||||
2023 | 2024 | |||
Outstanding amount | Outstanding amount | Outstanding amount | Outstanding amount | |
At floating rate | At fixed rate | At floating rate | At fixed rate | |
EUR | 46 | - | 114 | - |
USD | 9 | - | 8 | - |
GBP | (4) | - | (5) | - |
CNY | (3) | - | (6) | - |
AUD | (3) | - | (1) | - |
JPY | 2 | - | 2 | - |
CAD | (24) | - | (23) | - |
KRW | (1) | - | (1) | - |
INR | (4) | - | (3) | - |
Other | (12) | - | 2 | - |
TOTAL | 6 | - | 87 | - |
NET FINANCIAL DEBT | 6 | 87 |
21.2.1. SENSITIVITY ANALYSISinterest rate risk
A change of 100 basis points in interest rates at December 31, 2024 would have increased (decreased) profit or loss by the amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates, remain constant.
The analysis is performed on the same basis for 2023.
Profit and loss | ||
100 bp increase | 100 bp decrease | |
December 31, 2023 | ||
Net impact | (0.06) | 0.06 |
December 31, 2024 | ||
Net impact | (0.88) | 0.88 |
21.3. COMMODITY PRICE RISK
The Group\u2019s most important raw material exposures relate to silver. The Group\u2019s commodity price risk \u2013 i.e. the risk that its future cash flows and earnings may vary because of changed material prices \u2013 is highly connected with other factors such as the Group\u2019s competitive position within an industry, its relationship with customers and suppliers. The purchases of silver are not hedged.
21.3.1 Sensitivity analysiscommodity price risk
For 2024, the Group\u2019s exposed tonnage of silver is around 62 tons (2023: 70 tons). For 1 USD/troy change in the silver price, the impact on the Group\u2019s consolidated profit or loss statement is estimated at 1.8 million euro on a yearly basis (2023: 2.1 million euro). The analysis has been carried out on the actual exposed volume for the year 2024. The afore-mentioned Group\u2019s exposed tonnage of silver disregards the ability to partly charge its customers without existing silver clauses on the variability of the silver price.
21.4. Summarizing table of cash flow hedge RESERVE: currency risk
The following table provides a summary of the effect in accumulated other comprehensive income of cash flow hedges by type of risk:
Cash flow hedges related to currency risk | ||
2023 | 2024 | |
Other comprehensive income at January 1 | (2) | 1 |
Effective portion of changes in fair value booked in 'Other comprehensive income' | 2 | - |
Changes in fair value of cash flow hedges reclassified to turnover | 2 | (1) |
Adjustmentsfor amounts transferred to initial carrying amount of inventory\u00a0 | - | - |
Income taxes | - | - |
Other comprehensive income at December 31 | 1 | - |
There are no balances in hedge reserve related to hedge relationships for which hedge accounting is no longer applied.
37. EQUITY
The various components of equity and the changes therein from January 1, 2023 to December 31, 2024 are presented in the \u2018Consolidated Statements of Changes in Equity\u2019 as part of the primary financial statements.
37.1 SHARE CAPITAL AND SHARE PREMIUM
At December 31, 2024 and 2023, the issued capital of the Company amounts to 187 million euro. The outstanding ordi-nary shares amount to 154,820,528 at December 31, 2024 (2023: 154,820,528 outstanding shares).
The Board of Directors has invited the shareholders to participate in the Special and Extraordinary General Meeting of Shareholders held on February 28, 2025. On this meeting, a reduction of the capital of the Company to the amount of EUR 26,000,000.00 was proposed, by offsetting losses incurred in the amount of EUR 160,794,611.00, and corresponding amendment of Article 5 of the Articles of Association. The attendance quorum for the Extraordinary General Meeting was not reached. Consequently, this meeting is held on March 11, 2025, during which the proposed capital reduction was approved.
37.2 RESERVE FOR OWN SHARES
The reserve for the Company\u2019s own shares comprises the cost of the Company\u2019s shares held by the Group. At Decem-ber 31, 2024, the Group does not hold own shares (2023: nil).
37.3 REVALUATION RESERVE
The revaluation reserve comprises the revaluation of the Group\u2019s investment in Digital Illustrate Inc. which is irrevocably designated at fair value through OCI and will subsequently not be recycled to profit or loss. The Group made this classification as it intends to hold the investment over a long period for strategic purposes.
37.4 HEDGING RESERVE
As of December 31, 2024, the hedging reserve comprises the effective portion of the cumulative net change in fair value of foreign exchange contracts designated as cash flow hedges.
In the course of 2024 and 2023, the Group designated foreign exchange contracts as cash flow hedges of its foreign currency exposure in US dollar, Australian dollar, Chinese yuan, Indian rupee, Japanese yen, Korean won and British pound related to highly probable forecasted sales and purchases over the following 12 months. The portion of the gains on the forward exchange contracts that is determined to be an effective hedge is recognized directly in other comprehensive income (December 31, 2024: 0 million euro; December 31, 2023: 1 million euro net of tax).
A reconciliation of hedge reserve in tabular format for each type of risk is provided in note 21.4.
37.5 NET AMOUNT OF REMEASUREMENTS OF THE NET DEFINED BENEFIT LIABILITY RECORDED IN EQUITY
The net amount of remeasurements of the net defined benefit liability recorded in equity, comprises actuarial gains and losses resulting from the remesurement of the net defined benefit obligation and related plan assets, net of taxes.
These actuarial gains and losses originate from:
adjustmentsof the gross pension liability from experience gains or losses on plan liabilities, i.e. the effects of differences between the previous actuarial assumptions and what has actually occurred (e.g. changes in membership);
changes in demographic assumptions (e.g. mortality tables);
changes in financial assumptions (e.g. discount rate, price inflation);
differences in returns on plan assets excluding interest income calculated at the applicable discount rate.
The main part of the \u2018Net amount of remeasurements of the net defined benefit liability recorded in equity\u2019 originates from the first application of IAS 19 (revised 2011). The amendment to IAS 19 (revised 2011) have had a significant impact on the Group\u2019s consolidated equity and total comprehensive income. With this revision of IAS 19, the \u2018corridor\u2019 method, which allowed to defer the recognition of actuarial gains and losses over multiple accounting periods was eliminated. Under the new IAS 19, the net liability of the defined benefit plan had to be recognized in full at once and changes to the defined benefit obligation arising from actuarial assumptions are to be recognized in OCI. Also the interest cost and expected return on assets was replaced with a net interest amount that is calculated by applying the discount rate that is used to determine the net defined benefit liability. The difference between the interest income on plan assets and interest cost on the defined benefit obligation is included in OCI. At first application in 2013, com-parative data for 2012 have been restated. As at January 1, 2012, an amount of 704 million euro was booked in equity, 687 million euro related to Belgium, Germany, UK and USA called \u2018material countries\u2019 and 17 million euro related to other countries called \u2018non-material countries\u2019.
The following table presents the effect of the changes in accounting policy (restated opening balance at January 1, 2012) and the funded status for material countries and for comparative reasons the funded status per December 31, 2024:
million Euro\u00a0 | ||||||||
Belgium/Germany/UK/USA - Defined Benefit plans (excluding Belgian Defined Contribution plans) | ||||||||
Funded status and unrecognized actuarial losses as per January 1, 2012 | Funded status December 31, 2024 | |||||||
DBO | Plan assets | Funded status | Unrecognized acruarial losses | Net liability\u00a0 | DBO | Plan assets | Funded status | |
Belgium | 380 | (326) | 54 | (145) | (91) | 340 | (369) | (29) |
Germany | 637 | - | 636 | (135) | 501 | 417 | - | 417 |
UK | 421 | (274) | 147 | (200) | (52) | 305 | (320) | (15) |
USA | 589 | (335) | 254 | (207) | 47 | 74 | (59) | 15 |
Total\u00a0 | 2,027 | (936) | 1,091 | (687)\u00a0(1) | 404 | 1,136 | (748) | 388 |
(1) Following 1st time application fully recognized in OCI |
The evolution of the remeasurements booked in OCI since first application, which is related to material countries (DB-plans and DC-plans) amounts to (195) million euro, from (687) million euro at December 31, 2011 to (882) million euro at December 31, 2024 (see table below). This evolution is explained as follows:
Experience adjustments, i.e. the effects of differences between the previous actuarial assumptions and what has actually occurred such as changes in membership: 96 million euro
Changes in demographic assumptions: 78 million euro
Changes in financial assumptions: (350) million euro
Changes in return on plan assets excluding interest income: (10) million euro
Tax impact on remeasurements of material countries: (4) million euro
Reclassification of remeasurements to retained earnings of entities disposed off or liquidated: (4) million euro
All remeasurements as from January 1, 2012, remain in the equity caption \u2018Net amount of remeasurements of the net defined benefit liability recorded in equity\u2019 unless they are part of discontinued operations. Remeasurements related to discontinued operations are reclassified to retained earnings (2024: 1 million euro; 2023: (6) million euro).
The evolution for the year 2024 is as follows:
MILLION EURO | December 31, 2023 | Net amount of remeasurements of the net definedbenefit liability recorded in equity | Transfer of net amount of remeasurements on the defined benefit liability recorded in equity to retained earnings related to entities divested\u00a0 | Tax impact | December 31, 2024 |
Note 13 | Note 17.4 | ||||
Net amount of remeasurements of the net defined benefit liability recorded in equity | |||||
Related to material countries | (901) | 19 | - | - | (882) |
Related to non-material countries | (25) | - | 1 | - | (24) |
TOTAL | (926) | 19 | 1 | - | (906) |
The movement of the year, net of tax amounts is an increase of 19 million euro, explained by:
Experience losses on pension liabilities: (23) million euro
Actuarial gains from changes in financial assumptions: 25 million euro
Actuarial gains from return on plan assets excluding interest income: 17 million euro
Further information is provided in note 13.
In 2024, no deferred taxes related to the effects of remeasurements have been recognized in \u2018Other comprehensive income\u2019 (2023: 3 million euro).
37.6 TRANSLATION RESERVE
The translation reserve comprises all foreign currency differences arising from the translation of the financial state-ments of foreign operations, as well as from the translation of financial instruments that hedge the Company\u2019s net investment in a foreign subsidiary.
Until May 2016, the Group utilized USD forward exchange contracts to hedge the foreign currency exposure of the Group\u2019s net investment in one of its subsidiaries in the United States. As from May 2016, the Group has revoked the designation of the hedge. The gain on the hedging instrument relating to the effective portion of the hedge that was recognized in Other comprehensive income (December 31, 2024: 3 million euro, December 31, 2023: 3 million euro) shall be reclassified from equity to profit or loss on the disposal of the foreign entity.
37.7 DIVIDENDS
For 2023, no dividend has been paid out. For 2024, no dividend will be recommended by the Board of Directors to the General Assembly of Shareholders held on May 13, 2025.
37.8 Non-controlling interests
Until the disposal of the Offset business, non-controlling interests had a material interest in nine subsidiaries in Greater China and the ASEAN region. As of April 2023, these subsidiaries have been disposed (see note 20.2). The derecognition of non-controlling interests following the loss of control amounts to 33 million euro. During the first quarter of 2023, dividends amounting to 9 million euro have been paid to Shenzhen Brother Gao Deng Investment Group Co.
Remaining non-controlling interests relate to a few subsidiaries in Europa and are of minor importance to the Group. At December 31, 2024, non-controlling interests amount to 2 million euro (December 31, 2023: 1 million euro).
37.9 OTHER COMPREHENSIVE INCOME - NET OF TAX
2023
MILLION EURO | |||||||
Attributed to owners of the Company | |||||||
Non-controlling interests | TOTAL OTHER COMPREHENSIVE INCOME | ||||||
Translation reserve | Hedging reserve | Revaluation reserve | |||||
Remeasurement of the net defined benefit liability | TOTAL | ||||||
Exchange differences on translation of foreign operations | (11) | - | - | - | (11) | 1 | (10) |
Release of exchange differences of dis-continued operations to profit or loss | (2) | - | - | - | (2) | - | (2) |
Effective portion of changes in fair value of cash flow hedges, net of tax | - | 2 | - | - | 2 | - | 2 |
Net changes in fair value of cash flow hedges reclassified to profit or loss, net of tax | - | 2 | - | - | 2 | - | 2 |
Net changes in fair value of cash flow hedges transferred to initial carrying amount of hedged items, net of tax | - | - | - | - | - | - | - |
Net change in fair value of equity investments through OCI | - | - | (1) | - | (1) | - | (1) |
Remeasurement of the net defined benefit liability, net of tax | - | - | - | (12) | (12) | - | (12) |
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX | (13) | 3 | (1) | (12) | (23) | 1 | (22) |
2024
MILLION EURO | |||||||
Attributed to owners of the Company | |||||||
Non-controlling interests | TOTAL OTHER COMPREHENSIVE INCOME | ||||||
Translation reserve | Hedging reserve | Revaluation reserve | |||||
Remeasurement of the net defined benefit liability | TOTAL | ||||||
Exchange differences on translation of foreign operations | 5 | - | - | - | 5 | - | 5 |
Release of exchange differences of dis-continued operations to profit or loss | (1) | - | - | - | (1) | - | (1) |
Effective portion of changes in fair value of cash flow hedges, net of tax | - | - | - | - | - | - | - |
Net changes in fair value of cash flow hedges reclassified to profit or loss, net of tax | - | (1) | - | - | (1) | - | (1) |
Net changes in fair value of cash flow hedges transferred to initial carrying amount of hedged items, net of tax | - | - | - | - | - | - | - |
Net change in fair value of equity investments through OCI | - | - | (1) | - | (1) | - | (1) |
Remeasurement of the net defined benefit liability, net of tax | - | - | - | 19 | 19 | - | 19 |
TOTAL OTHER COMPREHENSIVE INCOME, NET OF TAX | 4 | (1) | (1) | 19 | 20 | - | 20 |
22. CREDIT RISK
Credit risk is the risk that the counterparty to a financial instrument may fail to discharge an obligation and cause the Group to incur a financial loss.
The Group manages exposure to credit risk by working with upfront agreed counterparty credit limits and through diversification of counterparties.
Credit risk arises mainly from the Group\u2019s receivables from customers and foreign currency forward contracts.
The exposure to credit risk from customer receivables is monitored on an ongoing basis by the Credit Committee. Credit limits are set for each customer based on its creditworthiness and are reviewed periodically by the Credit Committee. In monitoring the credit risk, customers are grouped in risk categories according to their financial characteristics. It is the Group\u2019s policy to cover a portion of the receivables portfolio through credit insurance to cover default risk.
Goods sold are subject to retention of title clauses, so that in event of non-payment the Group may have a secured claim. In normal circumstances, the Group does not require collateral in respect of trade or other receivables.
Transactions involving derivative financial instruments and deposits are to be kept within predefined credit limits set by counterparty based on the Standard and Poor\u2019s rating of the related financial institution. To minimize the con-centration of counterparty risk, the Group enters into derivative transactions with a number of financial institutions. Investments are only allowed in liquid assets.
22.1 EXPOSURE TO CREDIT RISK
As a result of the Group\u2019s broad customer portfolio, there were no significant concentrations of credit risk at Decem-ber 31, 2024. There are no customers for which revenue is recognized of more than 10% of consolidated revenue.
The carrying amounts of the financial assets, including derivative financial instruments, in the statement of financial position reflect the maximum exposure to credit risk. The maximum exposure to credit risk at the reporting date per class of financial asset is as follows:
MILLION EURO\u00a0 | Note | 2023 | 2024 |
Financial assets at fair value through OCI\u00a0 | |||
Equity instruments | 30.2 | 4 | 2 |
Derivative financial instruments designated as cash flow hedges -assets | 25 | 2 | - |
Financial assets at fair value through profit or loss | |||
Derivatives not part of a hedging relationship \u2013 assets | 25 | 1 | - |
Financial assets at amortized cost and contract assets | |||
Trade receivables | 22.2 | 177 | 181 |
Contract assets | 8.3 | 83 | 93 |
Receivables under finance lease | 31 | 100 | 87 |
Other receivables | 33 | 48 | 43 |
Other investments and loans measured at cost\u00a0 | 30.2 | - | - |
Cash\u00a0 | 34 | 77 | 68 |
TOTAL | 492 | 474 |
At December 31, 2024 and 2023, the exposure to credit risk for trade receivables, contract assets and lease receivables by geographic region was as follows:
MILLION EURO | 2023 | 2024 | ||||
Trade receivables | Contract assets | Lease receivables | Trade receivables | Contract assets | Lease receivables | |
Europe | 104 | 24 | 62 | 109 | 32 | 53 |
NAFTA | 32 | 45 | 39 | 27 | 43 | 33 |
Latin America | 17 | 9 | - | 22 | 11 | - |
Asia/Oceania/Africa | 25 | 4 | - | 23 | 6 | - |
TOTAL | 177 | 83 | 100 | 181 | 93 | 87 |
22.2 EXPECTED CREDIT LOSS
With regard to impairment of trade receivables, lease receivables and contract assets, the Group applies the simplified approach for the impairment evaluation, which implies that credit losses for these categories of assets are always measured at an amount equal to lifetime expected credit losses. Credit losses are measured as the present value of all cash shortfalls \u2013 i.e. the difference between the cash flows to which the entity is entitled to and what the entity expects to receive.
The inputs and assumptions to the expected credit loss model are the following: significant financial difficulty of the counterparty, a default of more than 90 days past due, a possible bankruptcy of the counterparty, \u2026
The evaluation of possible credit-impairment takes into account forward-looking elements. For the major part of the accounts receivable balances, debtors are scored and rated based on quantitative and qualitative information on an ongoing basis through Credit Risk Application in place. All customers are classified into different risk categories which are reassessed on a yearly basis based on relevant forward-looking information such as data from external credit bureaus, age of business, country risk and the credit manager\u2019s assessment. To mitigate the credit risk, credit insur-ance and other risk mitigation tools such as letter of credit, bank guarantees, mortgage are used within the Group. The methodology used by the the Group for evaluating impairment losses is thus based on individual review of the largest outstanding receivables taking into account forward-looking information.
The ageing of trade receivables and receivables under finance lease at the reporting date was:
MILLION EURO | 2023 | 2024 | ||||
Gross value | Impairment loss | Net | Gross value | Impairment loss | Net | |
Trade receivables | ||||||
Not past due | 153 | (2) | 151 | 163 | (1) | 162 |
Past due 0 - 30 days | 17 | - | 17 | 13 | - | 13 |
Past due 31 - 90 days | 4 | - | 4 | 2 | - | 2 |
Past due 91 - 180 days | 4 | (1) | 3 | 1 | - | 1 |
Past due 181 - 360 days | 4 | (4) | - | 2 | (1) | 1 |
Past due more than 360 days | 31 | (29) | 2 | 25 | (23) | 2 |
TOTAL TRADE RECEIVABLES | 213 | (36) | 177 | 206 | (25) | 181 |
Receivables under finance lease | ||||||
Not past due | 97 | - | 97 | 83 | - | 83 |
Past due 0 - 30 days | 2 | - | 2 | 1 | - | 1 |
Past due 31 - 90 days | 1 | - | 1 | 1 | - | 1 |
Past due 91 - 180 days | - | - | - | - | - | - |
Past due 181 - 360 days | - | - | - | 1 | - | 1 |
Past due more than 360 days | 1 | (1) | - | 1 | (1) | - |
TOTAL RECEIVABLES UNDER FINANCE LEASES | 101 | (1) | 100 | 87 | (1) | 87 |
Past due amounts more than 360 days mainly arise in Belgium and are mainly caused by commercial disputes. These overdues are for the major part written down. Overdues by region are very closely monitored case by case by the Credit Committees within the Group.
The following table provides information about the exposure to credit risk for trade receivables from individual cus-tomers at December 31, 2024:
MILLION EURO\u00a0 | Weighted average loss rate | Gross carrying amount | Loss allowance |
Not past due | 0.43% | 163 | (1) |
Past due 0 - 30 days | 0.13% | 13 | - |
Past due 31 - 90 days | 46.47% | 2 | - |
Past due 91 - 180 days | 19.41% | 1 | - |
More than 180 days\u00a0 | 91.26% | 27 | (24) |
The movement in the allowance for impairment in respect of trade, lease receivables and contract assets during the year is shown in the following table. The loss amount is measured at an amount equal to lifetime expected credit losses.
2023 | 2024 | |||
MILLION EURO | Impairment losses on trade and lease receivables | Impairment losses on contract assets | Impairment losses on trade and lease receivables | Impairment losses oncontract assets |
Balance at January 1 | 45 | 1 | 37 | - |
Additions/reversals charged to profit or loss | (1) | - | - | - |
Deductions from allowance(1) | (3) | - | (11) | - |
Disposals | (4) | - | - | - |
Exchange differences | - | - | - | - |
Balance at December 31 | 37 | - | 26 | - |
(1) Write-offs for which an allowance was previously recorded. |
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recov-ering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment for each type of financial asset based on whether there is a reasonable expectation of recovery. Financial assets that are written off are still subject to enforcement activities of the Group for recovery of amounts due.
The impairment loss relates to several other customers that indicated not to be able to pay their outstanding balances mainly due to economic circumstances.
The credit quality of financial institutions where the cash balances are held is disclosed in note 34.73% of the cash balances is held with banks having a credit rating of A-and higher.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__53": { "value": "23. LIQUIDITY RISK
Liquidity risk is the risk that the Group will encounter difficulties in meeting commitments related to financial liabil-ities when they fall due.
Liquidity is managed by maintaining a sufficient degree of diversification of funding sources. The Group has a policy in place to limit concentrations related to liquidity risk. The total share of gross drawn debt and undrawn committed facilities by one bank should not exceed 100 million euro. Risk concentrations are monitored by the Treasury Com-mittee on a quarterly basis.
Group treasury monitors rolling forecasts of the Group\u2019s liquidity requirements to ensure it has sufficient cash to meet its operational needs while maintaining sufficient headroom of its undrawn committed revolving credit facility in order not to breach the covenants. In managing its liquidity risk the Group has a three-year multi-currency revolving credit facility of 230 million euro at its discretion, with four banks. This facility is unsecured, runs until March 2026 and will be used for general corporate purposes. The financial institutions have extended the maturity to May 30, 2026, which covers a period of at least 12 months after the annual General Meeting of Shareholders. The applicable interest rate is Euribor, Libor or its equivalent replacement benchmark rate (Reuters) and a margin. At December 31, 2024 drawdowns under this facility amount to 100 million euro (December 31, 2023: 40 million euro).
Drawdowns under this loan facility are made for a maximum period of six months and can be rolled over as long as the maturity date of the drawdowns is within the final maturity date of the credit facility (May 2026). Management is currently in close discussion with the financial institutions for the refinancing of the credit facility. The Board of Directors is committed to reach an agreement sufficiently in advance of the maturity date that will enable the Company to cover its liquidity needs beyond May 2026.
Drawdowns under this facility are subject to predefined covenants agreed with the financial institution, i.e. a leverage ratio of net financial debt over EBITDAand an interest cover of EBITDAover the interest expense which should not exceed certain tresholds. These covenants are tested twice a year, but the Treasury Committee monitors these on a quarterly basis and reports to the Board of Directors. Further information on the calculation and compliance with covenants is provided in note 4 \u2018Significant accounting estimates and judgments\u2019. As per December 31, 2024, cove-nants are met.
Based on the fact that the entity has the right to roll over the drawdown under the existing loan facility and thus defer the settlement till May 2026, the Group has classified this liability as long-term.
The following are the remaining contractual maturities at the end of the reporting period of financial liabilities, including estimated interest payments based on conditions existing at the reporting date, i.e. exchange rates and interest rates. In the liquidity analysis, repayments of the committed facility are included in the earliest time band the Group could be required to repay its liabilities. With regard to derivatives, the maturity analysis comprises liabili-ties arising from derivatives and all gross settled forward exchange contracts. The contractual cash flows for forward exchange contracts are determined using forward rates.
2023
MILLION EURO | Carrying amount | Contractual cash flows | ||||
TOTAL | 3 months or less | 3-12 months | 1-5 years | More than 5 years | ||
Non-derivative financial liabilities | ||||||
Revolving credit facility(1) | 39 | 40 | 40 | - | - | - |
Other loans | - | - | - | - | - | - |
Lease liabilities | 44 | 44 | 4 | 10 | 26 | 3 |
Bank overdrafts | - | - | - | - | - | - |
Trade payables | 135 | 135 | 132 | 3 | - | |
Other payables | 9 | 9 | 9 | - | - | |
Derivative financial liabilities | - | |||||
Forward exchange contracts designated as cash flow hedges: | ||||||
\u00a0\u00a0\u00a0 Outflow | - | (76) | (20) | (56) | - | - |
\u00a0\u00a0\u00a0 Inflow | 2 | 78 | 21 | 57 | - | - |
Other forward exchange contracts: | ||||||
\u00a0\u00a0\u00a0 Outflow | - | (111) | (52) | (59) | - | - |
\u00a0\u00a0\u00a0 Inflow | 1 | 111 | 52 | 60 | - | - |
(1) Transaction costs (1 million euro) are presented as a reduction of the carrying amount of the financial liability. |
2024
Carrying amount | Contractual cash flows | |||||
MILLION EURO | TOTAL | 3 months or less | 3-12 months | 1-5 years | More than 5 years | |
Non-derivative financial liabilities | ||||||
Revolving credit facility | 100 | 100 | 100 | - | - | - |
Other loans | - | - | - | - | - | - |
Lease liabilities | 50 | 50 | 4 | 11 | 33 | 3 |
Bank overdrafts | - | - | - | - | - | - |
Trade payables | 129 | 129 | 127 | 2 | - | |
Other payables | 5 | 5 | 5 | - | - | |
Derivative financial liabilities | - | |||||
Forward exchange contracts designated as cash flow hedges: | ||||||
\u00a0\u00a0\u00a0 Outflow | - | (44) | (11) | (33) | - | - |
\u00a0\u00a0\u00a0 Inflow | - | 44 | 11 | 33 | - | - |
Other forward exchange contracts: | ||||||
\u00a0\u00a0\u00a0 Outflow | (1) | (107) | (38) | (69) | - | - |
\u00a0\u00a0\u00a0 Inflow | - | 106 | 38 | 68 | - | - |
The following table indicates the periods in which the cash flows associated with cash flow hedges are expected to occur and impact the profit or loss with the fair value of the related hedging instruments.
2023
MILLION EURO | Fair value | Expected cash flows | ||||
TOTAL | 3 months or less | 3-12 months | 1-5 years | More than 5 years | ||
Derivative financial instruments designated as cash flow hedges\u00a0 | ||||||
Forward exchange contracts designated as cash flow hedges: | ||||||
\u00a0\u00a0\u00a0 Outflow | - | (76) | (20) | (56) | - | - |
\u00a0\u00a0\u00a0 Inflow | 2 | 78 | 21 | 57 | - | - |
Swap contracts designated as cash flow hedges: | ||||||
\u00a0\u00a0\u00a0\u00a0 Outflow | - | - | - | - | - | - |
\u00a0\u00a0\u00a0\u00a0 Inflow | - | - | - | - | - | - |
2024 | ||||||
MILLION EURO | Fair value | |||||
Expected cash flows | ||||||
TOTAL | 3 months or less | 3-12 months | 1-5 years | More than 5 years | ||
Derivative financial instruments designated as cash flow hedges\u00a0 | ||||||
Forward exchange contracts designated as cash flow hedges: | ||||||
\u00a0\u00a0\u00a0 Outflow | - | (44) | (11) | (33) | - | - |
\u00a0\u00a0\u00a0 Inflow | - | 44 | 11 | 33 | - | - |
Swap contracts designated as cash flow hedges: | ||||||
\u00a0\u00a0\u00a0\u00a0 Outflow | - | - | - | - | - | - |
\u00a0\u00a0\u00a0\u00a0 Inflow | - | - | - | - | - | - |
24. CAPITAL MANAGEMENT
The Group\u2019s objective in capital management is to safeguard the Group\u2019s ability to continue as a going concern. The Exec-utive Management seeks to maintain a balance between the components of the shareholders\u2019 equity and the net financial debt at an agreed level. Net financial debt is defined as current and non-current loans and borrowings and lease liabilities less cash and cash equivalents. There were no changes in the Group\u2019s approach to capital management during the year.
The Group is not subject to any externally imposed capital requirements, with the exception of the statutory minimum equity funding requirements that apply to its subsidiaries in the different countries.
", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__55": { "value": "25. ACCOUNTING CLASSIFICATION AND FAIR VALUES
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
All derivative financial instruments are recognized at fair value in the statement of financial position.
The Group aggregates its financial instruments into classes based on their nature and characteristics. The following table shows the carrying amounts and fair values of financial assets and liabilities by category and a reconciliation of the corresponding line items in the statement of financial position. It does not include fair value information for financial assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. During 2024 and 2023 there have been no reclassifications of financial assets between categories.
The other payables classified as mandatorily at fair value through profit or loss in the fair value hierarchy 2 (2023: 2 million euro) relate to a deposit of 3.4 ton silver placed by a metal recovery and refining company, valued at fair value (observable market price). This was settled during 2024.
2023
MILLION EURO | Note | ||||||||
Financial assets/liabilities: carrying amount | |||||||||
Hedging instruments | |||||||||
Mandatorily at fair value through P and L \u2013 Others | Fair value through OCI \u2013 Equity instruments | ||||||||
Financial assets at amortized cost | Financial liabilities at amortized cost | TOTAL | Fair value | ||||||
Fair value hierarchy\u00a0 | (2) | (2) | (3) | (1) | |||||
Assets | |||||||||
Other financial assets | 30 | - | - | - | 4 | - | - | 4 | 4 |
Trade receivables\u00a0 | 22.2 | - | - | - | - | 177 | - | 177(a) | |
Receivables under finance lease | 31 | - | - | - | - | 100 | - | 100(a) | |
Other receivables\u00a0 | 33 | - | - | - | - | 48 | - | 48(a) | |
Derivative financial instruments:\u00a0 | |||||||||
Forward contracts used for hedging | 2 | - | - | - | - | - | 2 | 2 | |
Swap contracts used for hedging | - | - | - | - | - | - | - | - | |
Other forward exchange contracts | - | 1 | - | - | - | - | 1 | 1 | |
Other swap contracts | - | - | - | - | - | - | - | - | |
Cash and cash equivalents\u00a0 | 34 | - | - | - | - | 77 | - | 77 | 77 |
TOTAL ASSETS | 2 | 1 | - | 4 | 402 | 408 | - | ||
Liabilities | |||||||||
Loans and borrowings\u00a0 | - | - | - | - | - | - | - | - | |
Revolving credit facility(b) | 38 | - | - | - | - | - | 39 | 39 | 40 |
Bank overdrafts | 38 | - | - | - | - | - | - | - | |
Other bank liabilities | 38 | - | - | - | - | - | - | - | - |
Lease liabilities | 38.2 | - | - | - | - | - | 44 | 44(c) | |
Trade payables\u00a0 | - | - | - | - | - | 135 | 135(a) | ||
Other payables | 40 | - | 2 | - | - | - | 7 | 9(a) | |
Derivative financial instruments:\u00a0 | |||||||||
Forward contracts used for hedging | - | - | - | - | - | - | - | - | |
Swap contracts used for hedging | - | - | - | - | - | - | - | - | |
Other forward exchange contracts | - | - | - | - | - | - | - | - | |
Other swap contracts | - | - | - | - | - | - | - | - | |
TOTAL LIABILITIES | - | 2 | - | - | - | 225 | 227 | - |
Fair value hierarchy:
(1) Fair value hierarchy 1 means that the fair value is determined based on quoted prices in active markets.
(2) Fair value hierarchy 2 means that fair value is determined based on inputs other than quoted prices that are observable for that related
asset or liability.
(3) Fair value hierarchy 3 means that fair value is determined based on inputs that are not based on observable market data: related to other payable.
(a) The Group has not separately disclosed the fair value of trade and other receivables and the fair value of trade payables and other payables as these
assets and liabilities are mainly short-term receivables and payables for which the carrying amount is an approximation of fair value.
(b) Transaction costs are included in the initial measurement of the financial liability (1 million euro).
(c) Fair value is not disclosed for lease liabilities in accordance with IFRS 7.
2024
MILLION EURO | Note | ||||||||
Financial assets/liabilities: carrying amount | |||||||||
Hedging instruments | |||||||||
Mandatorily at fair value through P and L \u2013 Others | Fair value through OCI \u2013 Equity instruments | ||||||||
Financial assets at amortized cost | Financial liabilities at amortized cost | TOTAL | Fair value | ||||||
Fair value hierarchy\u00a0 | (2) | (2) | (3) | (1) | |||||
Assets | |||||||||
Other financial assets | 30 | - | - | - | 2 | - | - | 2 | 2 |
Trade receivables\u00a0 | 22.2 | - | - | - | - | 181 | - | 181(a) | - |
Receivables under finance lease | 31 | - | - | - | - | 87 | - | 87(a) | - |
Other receivables\u00a0 | 33 | - | - | - | - | 43 | - | 43(a) | - |
Derivative financial instruments:\u00a0 | - | - | - | - | - | - | - | - | |
Forward contracts used for hedging | - | - | - | - | - | - | - | - | |
Swap contracts used for hedging | - | - | - | - | - | - | - | - | |
Other forward exchange contracts | - | - | - | - | - | - | - | - | |
\u00a0Other swap contracts | - | - | - | - | - | - | - | - | |
Cash and cash equivalents\u00a0 | 34 | - | - | - | - | 68 | - | 68 | 68 |
TOTAL ASSETS | - | - | - | 2 | 379 | - | 381 | - | |
Liabilities | - | - | - | - | - | - | - | - | |
Loans and borrowings\u00a0 | - | - | - | - | - | - | - | - | |
Revolving credit facility(b) | 38 | - | - | - | - | - | 100 | 100 | 100 |
Bank overdrafts | 38 | - | - | - | - | - | - | - | - |
Other bank liabilities | 38 | - | - | - | - | - | 5 | 5 | 5 |
Lease liabilities | 38.2 | - | - | - | - | - | 50 | 50(c) | - |
Trade payables\u00a0 | - | - | - | - | - | 129 | 129(a) | - | |
Other payables | 40 | - | - | - | - | - | 5 | 5(a) | - |
Derivative financial instruments:\u00a0 | - | - | - | - | - | - | - | - | |
Forward contracts used for hedging | - | - | - | - | - | - | - | - | |
Swap contracts used for hedging | - | - | - | - | - | - | - | - | |
Other forward exchange contracts | - | - | - | - | - | - | - | - | |
Other swap contracts | - | 1 | - | - | - | - | 1 | 1 | |
TOTAL LIABILITIES | - | 1 | - | - | - | 289 | 290 | - |
Fair value hierarchy:
(1) Fair value hierarchy 1 means that the fair value is determined based on quoted prices in active markets.
(2) Fair value hierarchy 2 means that fair value is determined based on inputs other than quoted prices that are observable for that related asset or liability.
(3) Fair value hierarchy 3 means that fair value is determined based on inputs that are not based on observable market data.
(a) The Group has not separately disclosed the fair value of trade and other receivables and the fair value of trade payables and other payables as these
assets and liabilities are mainly short-term receivables and payables for which the carrying amount is an approximation of fair value.
(b) Transaction costs of the revolving credit facility are included in the initial measurement of the financial liability (0 million euro).
(c) Fair value is not disclosed for lease liabilities in accordance with IFRS 7.
25.1 BASIS FOR DETERMINING FAIR VALUES
Significant methods and assumptions used in estimating the fair values of financial instruments are as follows.
The fair value of investments in equity securities is determined by reference to their quoted market price at the reporting date.
The fair value of forward exchange contracts and swap contracts is valued using quoted forward exchange rates and yield curve data at reporting date.
The fair value of trade and other receivables and trade and other payables is not disclosed as it mainly relates to short-term receivables and payables for which their carrying amount is a reasonable approximation of fair value.
The fair value of financial liabilities is calculated based on the present value of future principal and interest cash flows, discounted at market rates of interest at the reporting date. The fair value of the debenture is the quoted market price at the reporting date.
The fair value for the current bank liabilities approximates nominal amounts excluding transaction costs, as draw-downs are made for short periods.
The fair value of the deferred contingent consideration from business combinations is calculated using a discounted cash flow model. The valuation model considers the present value of the expected future payments, discounted using a risk-adjusted discount rate. Significant observable inputs are the expected cash flows and the risk-adjusted discount rate. The estimated fair value would increase (decrease) if the expected performances are higher (lower).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__56": { "value": "25. ACCOUNTING CLASSIFICATION AND FAIR VALUES
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
All derivative financial instruments are recognized at fair value in the statement of financial position.
The Group aggregates its financial instruments into classes based on their nature and characteristics. The following table shows the carrying amounts and fair values of financial assets and liabilities by category and a reconciliation of the corresponding line items in the statement of financial position. It does not include fair value information for financial assets and liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value. During 2024 and 2023 there have been no reclassifications of financial assets between categories.
The other payables classified as mandatorily at fair value through profit or loss in the fair value hierarchy 2 (2023: 2 million euro) relate to a deposit of 3.4 ton silver placed by a metal recovery and refining company, valued at fair value (observable market price). This was settled during 2024.
2023
MILLION EURO | Note | ||||||||
Financial assets/liabilities: carrying amount | |||||||||
Hedging instruments | |||||||||
Mandatorily at fair value through P and L \u2013 Others | Fair value through OCI \u2013 Equity instruments | ||||||||
Financial assets at amortized cost | Financial liabilities at amortized cost | TOTAL | Fair value | ||||||
Fair value hierarchy\u00a0 | (2) | (2) | (3) | (1) | |||||
Assets | |||||||||
Other financial assets | 30 | - | - | - | 4 | - | - | 4 | 4 |
Trade receivables\u00a0 | 22.2 | - | - | - | - | 177 | - | 177(a) | |
Receivables under finance lease | 31 | - | - | - | - | 100 | - | 100(a) | |
Other receivables\u00a0 | 33 | - | - | - | - | 48 | - | 48(a) | |
Derivative financial instruments:\u00a0 | |||||||||
Forward contracts used for hedging | 2 | - | - | - | - | - | 2 | 2 | |
Swap contracts used for hedging | - | - | - | - | - | - | - | - | |
Other forward exchange contracts | - | 1 | - | - | - | - | 1 | 1 | |
Other swap contracts | - | - | - | - | - | - | - | - | |
Cash and cash equivalents\u00a0 | 34 | - | - | - | - | 77 | - | 77 | 77 |
TOTAL ASSETS | 2 | 1 | - | 4 | 402 | 408 | - | ||
Liabilities | |||||||||
Loans and borrowings\u00a0 | - | - | - | - | - | - | - | - | |
Revolving credit facility(b) | 38 | - | - | - | - | - | 39 | 39 | 40 |
Bank overdrafts | 38 | - | - | - | - | - | - | - | |
Other bank liabilities | 38 | - | - | - | - | - | - | - | - |
Lease liabilities | 38.2 | - | - | - | - | - | 44 | 44(c) | |
Trade payables\u00a0 | - | - | - | - | - | 135 | 135(a) | ||
Other payables | 40 | - | 2 | - | - | - | 7 | 9(a) | |
Derivative financial instruments:\u00a0 | |||||||||
Forward contracts used for hedging | - | - | - | - | - | - | - | - | |
Swap contracts used for hedging | - | - | - | - | - | - | - | - | |
Other forward exchange contracts | - | - | - | - | - | - | - | - | |
Other swap contracts | - | - | - | - | - | - | - | - | |
TOTAL LIABILITIES | - | 2 | - | - | - | 225 | 227 | - |
Fair value hierarchy:
(1) Fair value hierarchy 1 means that the fair value is determined based on quoted prices in active markets.
(2) Fair value hierarchy 2 means that fair value is determined based on inputs other than quoted prices that are observable for that related
asset or liability.
(3) Fair value hierarchy 3 means that fair value is determined based on inputs that are not based on observable market data: related to other payable.
(a) The Group has not separately disclosed the fair value of trade and other receivables and the fair value of trade payables and other payables as these
assets and liabilities are mainly short-term receivables and payables for which the carrying amount is an approximation of fair value.
(b) Transaction costs are included in the initial measurement of the financial liability (1 million euro).
(c) Fair value is not disclosed for lease liabilities in accordance with IFRS 7.
2024
MILLION EURO | Note | ||||||||
Financial assets/liabilities: carrying amount | |||||||||
Hedging instruments | |||||||||
Mandatorily at fair value through P and L \u2013 Others | Fair value through OCI \u2013 Equity instruments | ||||||||
Financial assets at amortized cost | Financial liabilities at amortized cost | TOTAL | Fair value | ||||||
Fair value hierarchy\u00a0 | (2) | (2) | (3) | (1) | |||||
Assets | |||||||||
Other financial assets | 30 | - | - | - | 2 | - | - | 2 | 2 |
Trade receivables\u00a0 | 22.2 | - | - | - | - | 181 | - | 181(a) | - |
Receivables under finance lease | 31 | - | - | - | - | 87 | - | 87(a) | - |
Other receivables\u00a0 | 33 | - | - | - | - | 43 | - | 43(a) | - |
Derivative financial instruments:\u00a0 | - | - | - | - | - | - | - | - | |
Forward contracts used for hedging | - | - | - | - | - | - | - | - | |
Swap contracts used for hedging | - | - | - | - | - | - | - | - | |
Other forward exchange contracts | - | - | - | - | - | - | - | - | |
\u00a0Other swap contracts | - | - | - | - | - | - | - | - | |
Cash and cash equivalents\u00a0 | 34 | - | - | - | - | 68 | - | 68 | 68 |
TOTAL ASSETS | - | - | - | 2 | 379 | - | 381 | - | |
Liabilities | - | - | - | - | - | - | - | - | |
Loans and borrowings\u00a0 | - | - | - | - | - | - | - | - | |
Revolving credit facility(b) | 38 | - | - | - | - | - | 100 | 100 | 100 |
Bank overdrafts | 38 | - | - | - | - | - | - | - | - |
Other bank liabilities | 38 | - | - | - | - | - | 5 | 5 | 5 |
Lease liabilities | 38.2 | - | - | - | - | - | 50 | 50(c) | - |
Trade payables\u00a0 | - | - | - | - | - | 129 | 129(a) | - | |
Other payables | 40 | - | - | - | - | - | 5 | 5(a) | - |
Derivative financial instruments:\u00a0 | - | - | - | - | - | - | - | - | |
Forward contracts used for hedging | - | - | - | - | - | - | - | - | |
Swap contracts used for hedging | - | - | - | - | - | - | - | - | |
Other forward exchange contracts | - | - | - | - | - | - | - | - | |
Other swap contracts | - | 1 | - | - | - | - | 1 | 1 | |
TOTAL LIABILITIES | - | 1 | - | - | - | 289 | 290 | - |
Fair value hierarchy:
(1) Fair value hierarchy 1 means that the fair value is determined based on quoted prices in active markets.
(2) Fair value hierarchy 2 means that fair value is determined based on inputs other than quoted prices that are observable for that related asset or liability.
(3) Fair value hierarchy 3 means that fair value is determined based on inputs that are not based on observable market data.
(a) The Group has not separately disclosed the fair value of trade and other receivables and the fair value of trade payables and other payables as these
assets and liabilities are mainly short-term receivables and payables for which the carrying amount is an approximation of fair value.
(b) Transaction costs of the revolving credit facility are included in the initial measurement of the financial liability (0 million euro).
(c) Fair value is not disclosed for lease liabilities in accordance with IFRS 7.
25.1 BASIS FOR DETERMINING FAIR VALUES
Significant methods and assumptions used in estimating the fair values of financial instruments are as follows.
The fair value of investments in equity securities is determined by reference to their quoted market price at the reporting date.
The fair value of forward exchange contracts and swap contracts is valued using quoted forward exchange rates and yield curve data at reporting date.
The fair value of trade and other receivables and trade and other payables is not disclosed as it mainly relates to short-term receivables and payables for which their carrying amount is a reasonable approximation of fair value.
The fair value of financial liabilities is calculated based on the present value of future principal and interest cash flows, discounted at market rates of interest at the reporting date. The fair value of the debenture is the quoted market price at the reporting date.
The fair value for the current bank liabilities approximates nominal amounts excluding transaction costs, as draw-downs are made for short periods.
The fair value of the deferred contingent consideration from business combinations is calculated using a discounted cash flow model. The valuation model considers the present value of the expected future payments, discounted using a risk-adjusted discount rate. Significant observable inputs are the expected cash flows and the risk-adjusted discount rate. The estimated fair value would increase (decrease) if the expected performances are higher (lower).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFairValueMeasurementExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__58": { "value": "26. ITEMS OF INCOME, EXPENSE, GAINS AND LOSSES ON FINANCIAL
INSTRUMENTS RECOGNIZED IN PROFIT OR LOSS
MILLION EURO | 2023 | ||||
Financial assets at amortized cost | Derivatives | Financial liabilities car-ried at amortized cost | Financial liabilities at fair value | TOTAL | |
Interest income | 16 | - | - | - | 16 |
Interest expense | - | (3) | (15) | - | (18) |
Finance lease income | 6 | - | - | - | 6 |
Impairment charges | (1) | - | - | - | (1) |
Income from reversal of impairment losses | 2 | - | - | - | 2 |
Change in fair value of financial instruments not part of a hedging relationship | - | - | - | - | - |
Net result from ineffectiveness of hedging instruments designated as cash flow hedges | - | - | - | - | - |
MILLION EURO | |||||
2024 | |||||
Financial assets at amortized cost | Derivatives | Financial liabilities car-ried at amortized cost | Financial liabilities at fair value | TOTAL | |
Interest income | 12 | - | - | - | 12 |
Interest expense | - | (2) | (18) | - | (20) |
Finance lease income | 7 | - | - | - | 7 |
Impairment charges | (3) | - | - | - | (3) |
Income from reversal of impairment losses | 2 | - | - | - | 2 |
Change in fair value of financial instruments not part of a hedging relationship | - | (2) | - | - | (2) |
Net result from ineffectiveness of hedging instruments designated as cash flow hedges | - | - | - | - | - |
ASSETS
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__59": { "value": "26. ITEMS OF INCOME, EXPENSE, GAINS AND LOSSES ON FINANCIAL
INSTRUMENTS RECOGNIZED IN PROFIT OR LOSS
MILLION EURO | 2023 | ||||
Financial assets at amortized cost | Derivatives | Financial liabilities car-ried at amortized cost | Financial liabilities at fair value | TOTAL | |
Interest income | 16 | - | - | - | 16 |
Interest expense | - | (3) | (15) | - | (18) |
Finance lease income | 6 | - | - | - | 6 |
Impairment charges | (1) | - | - | - | (1) |
Income from reversal of impairment losses | 2 | - | - | - | 2 |
Change in fair value of financial instruments not part of a hedging relationship | - | - | - | - | - |
Net result from ineffectiveness of hedging instruments designated as cash flow hedges | - | - | - | - | - |
MILLION EURO | |||||
2024 | |||||
Financial assets at amortized cost | Derivatives | Financial liabilities car-ried at amortized cost | Financial liabilities at fair value | TOTAL | |
Interest income | 12 | - | - | - | 12 |
Interest expense | - | (2) | (18) | - | (20) |
Finance lease income | 7 | - | - | - | 7 |
Impairment charges | (3) | - | - | - | (3) |
Income from reversal of impairment losses | 2 | - | - | - | 2 |
Change in fair value of financial instruments not part of a hedging relationship | - | (2) | - | - | (2) |
Net result from ineffectiveness of hedging instruments designated as cash flow hedges | - | - | - | - | - |
ASSETS
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__60": { "value": "27. GOODWILL AND INTANGIBLE ASSETS
MILLION EURO | Good-will | |||||||||
Intangible assets | ||||||||||
TOTAL | ||||||||||
Indefinite useful lives | Finite useful lives | |||||||||
Trademarks | Capitalized devel-opment costs | Acquired technol-ogy | ||||||||
Contrac-tual customer relation-ships | Trade-marks | |||||||||
Manage-ment informa-tion systems | ||||||||||
Software, licenses, conces-sions and IP rights | Advance payments to acquire intangible assets | |||||||||
Cost at December 31, 2022 | 379 | - | 2 | 61 | 43 | 5 | 131 | 58 | - | 679 |
Exchange differences | (7) | - | - | - | (2) | - | (1) | - | - | (10) |
Business combinations additions | - | - | - | - | - | - | - | - | - | - |
Business combinations divestment | (10) | - | - | (18) | (12) | (2) | (1) | (25) | - | (68) |
CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | - | (2) | - | (2) |
Capital expenditures | - | - | - | - | - | - | - | 1 | - | 1 |
Disposals and retirements | - | - | - | - | - | - | (2) | - | (2) | |
Construction in progress put into use | - | - | - | - | - | - | - | - | - | - |
Reclasses | - | - | - | - | - | - | - | 1 | - | 1 |
Cost at December 31, 2023 | 361 | - | 2 | 42 | 29 | 3 | 128 | 30 | - | 597 |
Exchange differences | 7 | - | - | (1) | 1 | - | 3 | 0 | - | 11 |
Business combinations additions | - | - | - | - | - | - | - | - | - | - |
Business combinations divestment | - | - | - | - | - | - | - | - | - | - |
CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | - | 1 | - | 1 |
Capital expenditures | - | - | 7 | - | - | - | 0 | 1 | - | 8 |
Disposals and retirements | (32) | - | - | 6 | - | - | (19) | 14 | - | (30) |
Construction in progress put into use | - | - | - | - | - | - | - | - | - | - |
Reclasses | - | - | - | - | - | - | - | - | - | |
Cost at December 31, 2024 | 336 | - | 9 | 48 | 30 | 3 | 112 | 47 | - | 586 |
Accumulated amortization and impairment losses December 31, 2022 | (160) | - | (2) | (39) | (42) | (4) | (130) | (54) | - | (431) |
Exchange differences | 4 | - | - | - | 2 | - | - | - | - | 7 |
Business combinations divestment | 10 | - | - | 18 | 12 | 2 | 1 | 25 | - | 68 |
Amortization during the year | - | - | - | (2) | - | - | (1) | - | - | (4) |
Impairment loss during the year | - | - | - | - | - | - | - | - | - | - |
Disposals and retirements | - | - | - | - | - | - | - | - | - | 1 |
Reclasses | - | - | - | - | - | - | - | - | - | - |
Accumulated amortization and impairment losses December 31, 2023 | (146) | - | (2) | (24) | (28) | (2) | (128) | (28) | - | (358) |
Exchange differences | (5) | - | - | - | (1) | - | (3) | - | - | (9) |
Business combinations divestment | - | - | - | - | - | - | - | - | - | - |
Amortization during the year | - | - | - | (2) | - | - | - | (1) | - | (4) |
Impairment loss during the year | - | - | - | - | - | - | - | - | - | - |
Disposals and retirements | 32 | - | - | (6) | - | - | 19 | (16) | - | 29 |
Reclasses | - | - | - | - | - | - | - | - | - | - |
Accumulated amortization and impairment losses December 31, 2024 | (119) | - | (2) | (31) | (30) | (2) | (112) | (45) | - | (341) |
Carrying amount December 31, 2022 | 218 | - | - | 21 | 1 | 1 | 1 | 5 | - | 248 |
Carrying amount December 31, 2023 | 215 | - | - | 19 | 1 | 1 | - | 3 | - | 239 |
Carrying amount December 31, 2024 | 217 | - | 7 | 16 | 1 | 1 | - | 2 | - | 245 |
In 2024, the cash relevant capital expenditures for intangible assets amount to 8 million euro (2023: 1 million euro) and mainly relate to capitalized development costs and software and licences. The capitalized development costs relate to investments in cloud technology in the HealthCare IT business segment. The accounting treatment of capitalized development costs is disclosed in note 50.5 'Research and development expenses'.
Disposals and retirements in 2024 mainly relate to a clean-up of fully amortized intangible assets and related postings.
Business combinations disposals in 2023 relate to the sale of the Offset business (see note 20.1).
At year-end 2024, the Group does not hold intangible assets with indefinite useful lives for impairment. The Group has assessed whether there was an indication of impairment for intangible assets with finite useful lives. These tests did not result in the recording of an impairment loss.
The Group\u2019s management has reviewed the appropriateness of the useful lives of its major intangible assets at year-end 2024. This review has not resulted in revised amortization periods for intangible assets belonging to Digital Print and Chemicals and HealthCare IT.
More information on the underlying assumptions of the useful lives is provided in section 27.3 of this note.
27.1 IMPAIRMENT TESTS FOR GOODWILL
For the financial statements of the Group, goodwill is tested for impairment annually and whenever there is an indica-tion of impairment. For the purpose of impairment testing, goodwill is allocated to a cash-generating unit (CGU).
In line with the definition of cash-generating units, the management of the Group has identified the reportable seg-ments as the cash-generating units, i.e. Agfa HealthCare IT, Digital Print and Chemicals and Radiology Solutions. The operating segment is the lowest level within the Group at which the goodwill is monitored for internal management purposes (see note 6 \u2018Reportable segments\u2019).
At the end of 2024, the impairment test for goodwill was performed for the cash-generating units HealthCare IT and Digital Print and Chemicals. The other business segments do not comprise goodwill.
The impairment testing has been carried out by comparing the carrying amount of each cash-generating unit to its recoverable amount. The recoverable amount of the CGU has been determined based upon a value in use calculation. The value in use is determined as the present value of estimated future cash flows that are derived from the current long-term planning of the Group. The discount rate used in calculating the present value of the estimated future cash flows, is based on an average market participant\u2019s weighted average cost of equity and debt capital (WACC).
The WACC considers a debt/equity ratio for an average market\u2019s participant. The market beta is based on comparable peer companies and an additional risk premium is considered in the cost of equity. The cost of debt is based on the conditions on which comparable companies can obtain long-term financing.
The discount rate is calculated for each cash-generating unit independently, considering the debt/equity ratio of each peer group. The pre-tax discount rates are derived from the WACC by means of iteration.
27.1.1 CGU Agfa HealthCare IT
At December 31, 2024, the carrying amount of the CGU Agfa HealthCare IT of 301 million euro net of lease liabilities, comprises goodwill of 215 million euro (2023: 214 million euro). At year-end 2024, the Group tested its goodwill of HealthCare IT for impairment.
Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized.
The value in use of the CGU Agfa HealthCare IT has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years a terminal value is computed using a growth rate in the division Information Technologies (IT Solutions) of 3%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment\u2019s key manage-ment and are based on past performance and management\u2019s expectations for the market development.
Key assumptions are:
after-tax WACC: 10.11% (2023: 10.5%);
pre-tax discount rate: 12.54% (2023: 12.38%)
compound annual growth rate of revenue: 6.1% (2023: 7.3%)
terminal growth rate (after five years): 3% for IT Solutions (2023: 2%).
Sensitivity analyses on changes in key assumptions, i.e. growth rate and substantial changes in WACC, have been per-formed. The sensitivity analysis was based on a 100 basis point increase in the weighted average cost of capital and a decrease of 100 basis points in terminal growth rate and compound annual growth rate. The sensitivity analyses con-sider the change in one assumption at the time, leaving the other assumptions unchanged in the calculation. Possible correlation effects between the individual assumptions are not taken into account. These sensitivity analyses have not revealed any risk for impairment loss. Having ascertained the extent of change in these assumptions that either individually or collectively would be required for the goodwill to be potentially impaired management has assessed the likelihood of such movement in key assumptions as low.
27.1.2 CGU Digital Print and Chemicals
At December 31, 2024, the carrying amount of the CGU Digital Print and Chemicals of 236 million euro net of lease liabilities, comprises goodwill of 2 million euro (2023: 2 million euro). At year-end 2024, the Group tested its goodwill of Digital Print and Chemicals for impairment.
Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized. The value in use of the CGU Digital Print and Chemicals has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years, a terminal value is computed using a growth rate in the division of 3.47%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment\u2019s key manage-ment and are based on past performance and management\u2019s expectations for the market development.
Key assumptions are:
after-tax WACC: 10.21% (2023: 10.83%);
pre-tax discount rate: 12.52% (2023: 14.03%);
compound annual growth rate of revenue 7.2% (2023: 9.7%);
terminal growth rate (after five years): 3.47% (2023: 3.58%).
Sensitivity analyses on changes in key assumptions, i.e. growth rate and substantial changes in WACC, have been per-formed. The sensitivity analysis was based on a 100 basis point increase in the weighted average cost of capital and a decrease of 100 basis points in terminal growth rate and compound annual growth rate. The sensitivity analyses con-sider the change in one assumption at the time, leaving the other assumptions unchanged in the calculation. Possible correlation effects between the individual assumptions are not taken into account. These sensitivity analyses have not revealed any risk for impairment loss. Having ascertained the extent of change in these assumptions that either individually or collectively would be required for the goodwill to be potentially impaired management has assessed the likelihood of such movement in key assumptions as low.
27.1.3 CGU Radiology Solutions
At the end of 2022, based on the impairment testing performed, the calculated value in use of the CGU was lower than its carrying amount and the goodwill and dedicated intangible assets with finite useful life were impaired in full in 2022. At December 31, 2024 the carrying amount of the cash generating unit Radiology Solutions, amounting to 86 million euro net of lease liabilities, does not comprise any goodwill. It comprises intangible assets with finite useful life amounting to 0,7 million euro. As the business environment for Radiology Solutions and more specific the performance of the medical film activity remains very challenging and given the continuous low performance of the business segment, management has tested the Group\u2019s intangibles, property, plant and equipment and right-of-use assets attributable to Radiology Solutions on possible impairment. The total balance of intangibles, property, plant and equipment and right-of-use assets subject to impairment testing amounted to 49 million euro. This review has resulted in the recognition of an impairment loss on property, plant and equipment and right-of-use assets for a total amount of 22 million euro (18 million euro on property, plant and equipment and 4 million euro on right-of-use assets). More information is disclosed in notes 28 and 29.
27.2 IMPAIRMENT TESTS FOR INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES
At year-end 2024, the Group has no intangible assets with indefinite useful lives on its balance sheet.
27.3 USEFUL LIVES OF INTANGIBLE ASSETS WITH FINITE USEFUL LIVES
The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Group. Acquired technology and customer relationships are the most crucial recog-nized intangible assets with finite useful lives for the Group. For acquired technology, the estimation of the remaining useful life is based on the analysis of factors such as typical product life cycles in the industry and technological and commercial obsolescence arising mainly from expected actions by competitors or potential competitors.
At December 31, 2024, the net carrying amount of the Group\u2019s acquired technology amounted to 16 million euro (2023: 19 million euro). The Group\u2019s acquired technology has an estimated weighted average remaining useful life of approximately seven years. The useful lives are periodically reviewed and revised if necessary.
For acquired contractual customer relationships, the estimated remaining useful life is assessed by reference to customer attrition rates. For the estimation of appropriate customer attrition rates, the Group assesses the probability that existing contracts will be renegotiated. For the assessment of the probability that existing contracts can be rene-gotiated, demand as well as competition and other factors such as technological lock-in and related sunk costs are of importance. At December 31, 2024, the net carrying amount of the Group\u2019s remaining acquired contractual customer relationships amount to 1 million euro (2023: 1 million euro).
The Group\u2019s acquired contractual customer relationships have an estimated weighted average remaining useful life of approximately four years. The useful lives are periodically reviewed and revised if necessary.
While the Group believes that the assumptions (such as attrition rates and product life cycles) used for the determi-nation of the useful lives of aforementioned intangibles are appropriate, significant differences in actual experience would affect the Group\u2019s future amortization expense.
27. GOODWILL AND INTANGIBLE ASSETS
MILLION EURO | Good-will | |||||||||
Intangible assets | ||||||||||
TOTAL | ||||||||||
Indefinite useful lives | Finite useful lives | |||||||||
Trademarks | Capitalized devel-opment costs | Acquired technol-ogy | ||||||||
Contrac-tual customer relation-ships | Trade-marks | |||||||||
Manage-ment informa-tion systems | ||||||||||
Software, licenses, conces-sions and IP rights | Advance payments to acquire intangible assets | |||||||||
Cost at December 31, 2022 | 379 | - | 2 | 61 | 43 | 5 | 131 | 58 | - | 679 |
Exchange differences | (7) | - | - | - | (2) | - | (1) | - | - | (10) |
Business combinations additions | - | - | - | - | - | - | - | - | - | - |
Business combinations divestment | (10) | - | - | (18) | (12) | (2) | (1) | (25) | - | (68) |
CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | - | (2) | - | (2) |
Capital expenditures | - | - | - | - | - | - | - | 1 | - | 1 |
Disposals and retirements | - | - | - | - | - | - | (2) | - | (2) | |
Construction in progress put into use | - | - | - | - | - | - | - | - | - | - |
Reclasses | - | - | - | - | - | - | - | 1 | - | 1 |
Cost at December 31, 2023 | 361 | - | 2 | 42 | 29 | 3 | 128 | 30 | - | 597 |
Exchange differences | 7 | - | - | (1) | 1 | - | 3 | 0 | - | 11 |
Business combinations additions | - | - | - | - | - | - | - | - | - | - |
Business combinations divestment | - | - | - | - | - | - | - | - | - | - |
CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | - | 1 | - | 1 |
Capital expenditures | - | - | 7 | - | - | - | 0 | 1 | - | 8 |
Disposals and retirements | (32) | - | - | 6 | - | - | (19) | 14 | - | (30) |
Construction in progress put into use | - | - | - | - | - | - | - | - | - | - |
Reclasses | - | - | - | - | - | - | - | - | - | |
Cost at December 31, 2024 | 336 | - | 9 | 48 | 30 | 3 | 112 | 47 | - | 586 |
Accumulated amortization and impairment losses December 31, 2022 | (160) | - | (2) | (39) | (42) | (4) | (130) | (54) | - | (431) |
Exchange differences | 4 | - | - | - | 2 | - | - | - | - | 7 |
Business combinations divestment | 10 | - | - | 18 | 12 | 2 | 1 | 25 | - | 68 |
Amortization during the year | - | - | - | (2) | - | - | (1) | - | - | (4) |
Impairment loss during the year | - | - | - | - | - | - | - | - | - | - |
Disposals and retirements | - | - | - | - | - | - | - | - | - | 1 |
Reclasses | - | - | - | - | - | - | - | - | - | - |
Accumulated amortization and impairment losses December 31, 2023 | (146) | - | (2) | (24) | (28) | (2) | (128) | (28) | - | (358) |
Exchange differences | (5) | - | - | - | (1) | - | (3) | - | - | (9) |
Business combinations divestment | - | - | - | - | - | - | - | - | - | - |
Amortization during the year | - | - | - | (2) | - | - | - | (1) | - | (4) |
Impairment loss during the year | - | - | - | - | - | - | - | - | - | - |
Disposals and retirements | 32 | - | - | (6) | - | - | 19 | (16) | - | 29 |
Reclasses | - | - | - | - | - | - | - | - | - | - |
Accumulated amortization and impairment losses December 31, 2024 | (119) | - | (2) | (31) | (30) | (2) | (112) | (45) | - | (341) |
Carrying amount December 31, 2022 | 218 | - | - | 21 | 1 | 1 | 1 | 5 | - | 248 |
Carrying amount December 31, 2023 | 215 | - | - | 19 | 1 | 1 | - | 3 | - | 239 |
Carrying amount December 31, 2024 | 217 | - | 7 | 16 | 1 | 1 | - | 2 | - | 245 |
In 2024, the cash relevant capital expenditures for intangible assets amount to 8 million euro (2023: 1 million euro) and mainly relate to capitalized development costs and software and licences. The capitalized development costs relate to investments in cloud technology in the HealthCare IT business segment. The accounting treatment of capitalized development costs is disclosed in note 50.5 'Research and development expenses'.
Disposals and retirements in 2024 mainly relate to a clean-up of fully amortized intangible assets and related postings.
Business combinations disposals in 2023 relate to the sale of the Offset business (see note 20.1).
At year-end 2024, the Group does not hold intangible assets with indefinite useful lives for impairment. The Group has assessed whether there was an indication of impairment for intangible assets with finite useful lives. These tests did not result in the recording of an impairment loss.
The Group\u2019s management has reviewed the appropriateness of the useful lives of its major intangible assets at year-end 2024. This review has not resulted in revised amortization periods for intangible assets belonging to Digital Print and Chemicals and HealthCare IT.
More information on the underlying assumptions of the useful lives is provided in section 27.3 of this note.
27.1 IMPAIRMENT TESTS FOR GOODWILL
For the financial statements of the Group, goodwill is tested for impairment annually and whenever there is an indica-tion of impairment. For the purpose of impairment testing, goodwill is allocated to a cash-generating unit (CGU).
In line with the definition of cash-generating units, the management of the Group has identified the reportable seg-ments as the cash-generating units, i.e. Agfa HealthCare IT, Digital Print and Chemicals and Radiology Solutions. The operating segment is the lowest level within the Group at which the goodwill is monitored for internal management purposes (see note 6 \u2018Reportable segments\u2019).
At the end of 2024, the impairment test for goodwill was performed for the cash-generating units HealthCare IT and Digital Print and Chemicals. The other business segments do not comprise goodwill.
The impairment testing has been carried out by comparing the carrying amount of each cash-generating unit to its recoverable amount. The recoverable amount of the CGU has been determined based upon a value in use calculation. The value in use is determined as the present value of estimated future cash flows that are derived from the current long-term planning of the Group. The discount rate used in calculating the present value of the estimated future cash flows, is based on an average market participant\u2019s weighted average cost of equity and debt capital (WACC).
The WACC considers a debt/equity ratio for an average market\u2019s participant. The market beta is based on comparable peer companies and an additional risk premium is considered in the cost of equity. The cost of debt is based on the conditions on which comparable companies can obtain long-term financing.
The discount rate is calculated for each cash-generating unit independently, considering the debt/equity ratio of each peer group. The pre-tax discount rates are derived from the WACC by means of iteration.
27.1.1 CGU Agfa HealthCare IT
At December 31, 2024, the carrying amount of the CGU Agfa HealthCare IT of 301 million euro net of lease liabilities, comprises goodwill of 215 million euro (2023: 214 million euro). At year-end 2024, the Group tested its goodwill of HealthCare IT for impairment.
Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized.
The value in use of the CGU Agfa HealthCare IT has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years a terminal value is computed using a growth rate in the division Information Technologies (IT Solutions) of 3%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment\u2019s key manage-ment and are based on past performance and management\u2019s expectations for the market development.
Key assumptions are:
after-tax WACC: 10.11% (2023: 10.5%);
pre-tax discount rate: 12.54% (2023: 12.38%)
compound annual growth rate of revenue: 6.1% (2023: 7.3%)
terminal growth rate (after five years): 3% for IT Solutions (2023: 2%).
Sensitivity analyses on changes in key assumptions, i.e. growth rate and substantial changes in WACC, have been per-formed. The sensitivity analysis was based on a 100 basis point increase in the weighted average cost of capital and a decrease of 100 basis points in terminal growth rate and compound annual growth rate. The sensitivity analyses con-sider the change in one assumption at the time, leaving the other assumptions unchanged in the calculation. Possible correlation effects between the individual assumptions are not taken into account. These sensitivity analyses have not revealed any risk for impairment loss. Having ascertained the extent of change in these assumptions that either individually or collectively would be required for the goodwill to be potentially impaired management has assessed the likelihood of such movement in key assumptions as low.
27.1.2 CGU Digital Print and Chemicals
At December 31, 2024, the carrying amount of the CGU Digital Print and Chemicals of 236 million euro net of lease liabilities, comprises goodwill of 2 million euro (2023: 2 million euro). At year-end 2024, the Group tested its goodwill of Digital Print and Chemicals for impairment.
Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized. The value in use of the CGU Digital Print and Chemicals has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years, a terminal value is computed using a growth rate in the division of 3.47%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment\u2019s key manage-ment and are based on past performance and management\u2019s expectations for the market development.
Key assumptions are:
after-tax WACC: 10.21% (2023: 10.83%);
pre-tax discount rate: 12.52% (2023: 14.03%);
compound annual growth rate of revenue 7.2% (2023: 9.7%);
terminal growth rate (after five years): 3.47% (2023: 3.58%).
Sensitivity analyses on changes in key assumptions, i.e. growth rate and substantial changes in WACC, have been per-formed. The sensitivity analysis was based on a 100 basis point increase in the weighted average cost of capital and a decrease of 100 basis points in terminal growth rate and compound annual growth rate. The sensitivity analyses con-sider the change in one assumption at the time, leaving the other assumptions unchanged in the calculation. Possible correlation effects between the individual assumptions are not taken into account. These sensitivity analyses have not revealed any risk for impairment loss. Having ascertained the extent of change in these assumptions that either individually or collectively would be required for the goodwill to be potentially impaired management has assessed the likelihood of such movement in key assumptions as low.
27.1.3 CGU Radiology Solutions
At the end of 2022, based on the impairment testing performed, the calculated value in use of the CGU was lower than its carrying amount and the goodwill and dedicated intangible assets with finite useful life were impaired in full in 2022. At December 31, 2024 the carrying amount of the cash generating unit Radiology Solutions, amounting to 86 million euro net of lease liabilities, does not comprise any goodwill. It comprises intangible assets with finite useful life amounting to 0,7 million euro. As the business environment for Radiology Solutions and more specific the performance of the medical film activity remains very challenging and given the continuous low performance of the business segment, management has tested the Group\u2019s intangibles, property, plant and equipment and right-of-use assets attributable to Radiology Solutions on possible impairment. The total balance of intangibles, property, plant and equipment and right-of-use assets subject to impairment testing amounted to 49 million euro. This review has resulted in the recognition of an impairment loss on property, plant and equipment and right-of-use assets for a total amount of 22 million euro (18 million euro on property, plant and equipment and 4 million euro on right-of-use assets). More information is disclosed in notes 28 and 29.
27.2 IMPAIRMENT TESTS FOR INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES
At year-end 2024, the Group has no intangible assets with indefinite useful lives on its balance sheet.
27.3 USEFUL LIVES OF INTANGIBLE ASSETS WITH FINITE USEFUL LIVES
The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Group. Acquired technology and customer relationships are the most crucial recog-nized intangible assets with finite useful lives for the Group. For acquired technology, the estimation of the remaining useful life is based on the analysis of factors such as typical product life cycles in the industry and technological and commercial obsolescence arising mainly from expected actions by competitors or potential competitors.
At December 31, 2024, the net carrying amount of the Group\u2019s acquired technology amounted to 16 million euro (2023: 19 million euro). The Group\u2019s acquired technology has an estimated weighted average remaining useful life of approximately seven years. The useful lives are periodically reviewed and revised if necessary.
For acquired contractual customer relationships, the estimated remaining useful life is assessed by reference to customer attrition rates. For the estimation of appropriate customer attrition rates, the Group assesses the probability that existing contracts will be renegotiated. For the assessment of the probability that existing contracts can be rene-gotiated, demand as well as competition and other factors such as technological lock-in and related sunk costs are of importance. At December 31, 2024, the net carrying amount of the Group\u2019s remaining acquired contractual customer relationships amount to 1 million euro (2023: 1 million euro).
The Group\u2019s acquired contractual customer relationships have an estimated weighted average remaining useful life of approximately four years. The useful lives are periodically reviewed and revised if necessary.
While the Group believes that the assumptions (such as attrition rates and product life cycles) used for the determi-nation of the useful lives of aforementioned intangibles are appropriate, significant differences in actual experience would affect the Group\u2019s future amortization expense.
27. GOODWILL AND INTANGIBLE ASSETS
MILLION EURO | Good-will | |||||||||
Intangible assets | ||||||||||
TOTAL | ||||||||||
Indefinite useful lives | Finite useful lives | |||||||||
Trademarks | Capitalized devel-opment costs | Acquired technol-ogy | ||||||||
Contrac-tual customer relation-ships | Trade-marks | |||||||||
Manage-ment informa-tion systems | ||||||||||
Software, licenses, conces-sions and IP rights | Advance payments to acquire intangible assets | |||||||||
Cost at December 31, 2022 | 379 | - | 2 | 61 | 43 | 5 | 131 | 58 | - | 679 |
Exchange differences | (7) | - | - | - | (2) | - | (1) | - | - | (10) |
Business combinations additions | - | - | - | - | - | - | - | - | - | - |
Business combinations divestment | (10) | - | - | (18) | (12) | (2) | (1) | (25) | - | (68) |
CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | - | (2) | - | (2) |
Capital expenditures | - | - | - | - | - | - | - | 1 | - | 1 |
Disposals and retirements | - | - | - | - | - | - | (2) | - | (2) | |
Construction in progress put into use | - | - | - | - | - | - | - | - | - | - |
Reclasses | - | - | - | - | - | - | - | 1 | - | 1 |
Cost at December 31, 2023 | 361 | - | 2 | 42 | 29 | 3 | 128 | 30 | - | 597 |
Exchange differences | 7 | - | - | (1) | 1 | - | 3 | 0 | - | 11 |
Business combinations additions | - | - | - | - | - | - | - | - | - | - |
Business combinations divestment | - | - | - | - | - | - | - | - | - | - |
CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | - | 1 | - | 1 |
Capital expenditures | - | - | 7 | - | - | - | 0 | 1 | - | 8 |
Disposals and retirements | (32) | - | - | 6 | - | - | (19) | 14 | - | (30) |
Construction in progress put into use | - | - | - | - | - | - | - | - | - | - |
Reclasses | - | - | - | - | - | - | - | - | - | |
Cost at December 31, 2024 | 336 | - | 9 | 48 | 30 | 3 | 112 | 47 | - | 586 |
Accumulated amortization and impairment losses December 31, 2022 | (160) | - | (2) | (39) | (42) | (4) | (130) | (54) | - | (431) |
Exchange differences | 4 | - | - | - | 2 | - | - | - | - | 7 |
Business combinations divestment | 10 | - | - | 18 | 12 | 2 | 1 | 25 | - | 68 |
Amortization during the year | - | - | - | (2) | - | - | (1) | - | - | (4) |
Impairment loss during the year | - | - | - | - | - | - | - | - | - | - |
Disposals and retirements | - | - | - | - | - | - | - | - | - | 1 |
Reclasses | - | - | - | - | - | - | - | - | - | - |
Accumulated amortization and impairment losses December 31, 2023 | (146) | - | (2) | (24) | (28) | (2) | (128) | (28) | - | (358) |
Exchange differences | (5) | - | - | - | (1) | - | (3) | - | - | (9) |
Business combinations divestment | - | - | - | - | - | - | - | - | - | - |
Amortization during the year | - | - | - | (2) | - | - | - | (1) | - | (4) |
Impairment loss during the year | - | - | - | - | - | - | - | - | - | - |
Disposals and retirements | 32 | - | - | (6) | - | - | 19 | (16) | - | 29 |
Reclasses | - | - | - | - | - | - | - | - | - | - |
Accumulated amortization and impairment losses December 31, 2024 | (119) | - | (2) | (31) | (30) | (2) | (112) | (45) | - | (341) |
Carrying amount December 31, 2022 | 218 | - | - | 21 | 1 | 1 | 1 | 5 | - | 248 |
Carrying amount December 31, 2023 | 215 | - | - | 19 | 1 | 1 | - | 3 | - | 239 |
Carrying amount December 31, 2024 | 217 | - | 7 | 16 | 1 | 1 | - | 2 | - | 245 |
In 2024, the cash relevant capital expenditures for intangible assets amount to 8 million euro (2023: 1 million euro) and mainly relate to capitalized development costs and software and licences. The capitalized development costs relate to investments in cloud technology in the HealthCare IT business segment. The accounting treatment of capitalized development costs is disclosed in note 50.5 'Research and development expenses'.
Disposals and retirements in 2024 mainly relate to a clean-up of fully amortized intangible assets and related postings.
Business combinations disposals in 2023 relate to the sale of the Offset business (see note 20.1).
At year-end 2024, the Group does not hold intangible assets with indefinite useful lives for impairment. The Group has assessed whether there was an indication of impairment for intangible assets with finite useful lives. These tests did not result in the recording of an impairment loss.
The Group\u2019s management has reviewed the appropriateness of the useful lives of its major intangible assets at year-end 2024. This review has not resulted in revised amortization periods for intangible assets belonging to Digital Print and Chemicals and HealthCare IT.
More information on the underlying assumptions of the useful lives is provided in section 27.3 of this note.
27.1 IMPAIRMENT TESTS FOR GOODWILL
For the financial statements of the Group, goodwill is tested for impairment annually and whenever there is an indica-tion of impairment. For the purpose of impairment testing, goodwill is allocated to a cash-generating unit (CGU).
In line with the definition of cash-generating units, the management of the Group has identified the reportable seg-ments as the cash-generating units, i.e. Agfa HealthCare IT, Digital Print and Chemicals and Radiology Solutions. The operating segment is the lowest level within the Group at which the goodwill is monitored for internal management purposes (see note 6 \u2018Reportable segments\u2019).
At the end of 2024, the impairment test for goodwill was performed for the cash-generating units HealthCare IT and Digital Print and Chemicals. The other business segments do not comprise goodwill.
The impairment testing has been carried out by comparing the carrying amount of each cash-generating unit to its recoverable amount. The recoverable amount of the CGU has been determined based upon a value in use calculation. The value in use is determined as the present value of estimated future cash flows that are derived from the current long-term planning of the Group. The discount rate used in calculating the present value of the estimated future cash flows, is based on an average market participant\u2019s weighted average cost of equity and debt capital (WACC).
The WACC considers a debt/equity ratio for an average market\u2019s participant. The market beta is based on comparable peer companies and an additional risk premium is considered in the cost of equity. The cost of debt is based on the conditions on which comparable companies can obtain long-term financing.
The discount rate is calculated for each cash-generating unit independently, considering the debt/equity ratio of each peer group. The pre-tax discount rates are derived from the WACC by means of iteration.
27.1.1 CGU Agfa HealthCare IT
At December 31, 2024, the carrying amount of the CGU Agfa HealthCare IT of 301 million euro net of lease liabilities, comprises goodwill of 215 million euro (2023: 214 million euro). At year-end 2024, the Group tested its goodwill of HealthCare IT for impairment.
Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized.
The value in use of the CGU Agfa HealthCare IT has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years a terminal value is computed using a growth rate in the division Information Technologies (IT Solutions) of 3%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment\u2019s key manage-ment and are based on past performance and management\u2019s expectations for the market development.
Key assumptions are:
after-tax WACC: 10.11% (2023: 10.5%);
pre-tax discount rate: 12.54% (2023: 12.38%)
compound annual growth rate of revenue: 6.1% (2023: 7.3%)
terminal growth rate (after five years): 3% for IT Solutions (2023: 2%).
Sensitivity analyses on changes in key assumptions, i.e. growth rate and substantial changes in WACC, have been per-formed. The sensitivity analysis was based on a 100 basis point increase in the weighted average cost of capital and a decrease of 100 basis points in terminal growth rate and compound annual growth rate. The sensitivity analyses con-sider the change in one assumption at the time, leaving the other assumptions unchanged in the calculation. Possible correlation effects between the individual assumptions are not taken into account. These sensitivity analyses have not revealed any risk for impairment loss. Having ascertained the extent of change in these assumptions that either individually or collectively would be required for the goodwill to be potentially impaired management has assessed the likelihood of such movement in key assumptions as low.
27.1.2 CGU Digital Print and Chemicals
At December 31, 2024, the carrying amount of the CGU Digital Print and Chemicals of 236 million euro net of lease liabilities, comprises goodwill of 2 million euro (2023: 2 million euro). At year-end 2024, the Group tested its goodwill of Digital Print and Chemicals for impairment.
Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized. The value in use of the CGU Digital Print and Chemicals has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years, a terminal value is computed using a growth rate in the division of 3.47%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment\u2019s key manage-ment and are based on past performance and management\u2019s expectations for the market development.
Key assumptions are:
after-tax WACC: 10.21% (2023: 10.83%);
pre-tax discount rate: 12.52% (2023: 14.03%);
compound annual growth rate of revenue 7.2% (2023: 9.7%);
terminal growth rate (after five years): 3.47% (2023: 3.58%).
Sensitivity analyses on changes in key assumptions, i.e. growth rate and substantial changes in WACC, have been per-formed. The sensitivity analysis was based on a 100 basis point increase in the weighted average cost of capital and a decrease of 100 basis points in terminal growth rate and compound annual growth rate. The sensitivity analyses con-sider the change in one assumption at the time, leaving the other assumptions unchanged in the calculation. Possible correlation effects between the individual assumptions are not taken into account. These sensitivity analyses have not revealed any risk for impairment loss. Having ascertained the extent of change in these assumptions that either individually or collectively would be required for the goodwill to be potentially impaired management has assessed the likelihood of such movement in key assumptions as low.
27.1.3 CGU Radiology Solutions
At the end of 2022, based on the impairment testing performed, the calculated value in use of the CGU was lower than its carrying amount and the goodwill and dedicated intangible assets with finite useful life were impaired in full in 2022. At December 31, 2024 the carrying amount of the cash generating unit Radiology Solutions, amounting to 86 million euro net of lease liabilities, does not comprise any goodwill. It comprises intangible assets with finite useful life amounting to 0,7 million euro. As the business environment for Radiology Solutions and more specific the performance of the medical film activity remains very challenging and given the continuous low performance of the business segment, management has tested the Group\u2019s intangibles, property, plant and equipment and right-of-use assets attributable to Radiology Solutions on possible impairment. The total balance of intangibles, property, plant and equipment and right-of-use assets subject to impairment testing amounted to 49 million euro. This review has resulted in the recognition of an impairment loss on property, plant and equipment and right-of-use assets for a total amount of 22 million euro (18 million euro on property, plant and equipment and 4 million euro on right-of-use assets). More information is disclosed in notes 28 and 29.
27.2 IMPAIRMENT TESTS FOR INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES
At year-end 2024, the Group has no intangible assets with indefinite useful lives on its balance sheet.
27.3 USEFUL LIVES OF INTANGIBLE ASSETS WITH FINITE USEFUL LIVES
The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Group. Acquired technology and customer relationships are the most crucial recog-nized intangible assets with finite useful lives for the Group. For acquired technology, the estimation of the remaining useful life is based on the analysis of factors such as typical product life cycles in the industry and technological and commercial obsolescence arising mainly from expected actions by competitors or potential competitors.
At December 31, 2024, the net carrying amount of the Group\u2019s acquired technology amounted to 16 million euro (2023: 19 million euro). The Group\u2019s acquired technology has an estimated weighted average remaining useful life of approximately seven years. The useful lives are periodically reviewed and revised if necessary.
For acquired contractual customer relationships, the estimated remaining useful life is assessed by reference to customer attrition rates. For the estimation of appropriate customer attrition rates, the Group assesses the probability that existing contracts will be renegotiated. For the assessment of the probability that existing contracts can be rene-gotiated, demand as well as competition and other factors such as technological lock-in and related sunk costs are of importance. At December 31, 2024, the net carrying amount of the Group\u2019s remaining acquired contractual customer relationships amount to 1 million euro (2023: 1 million euro).
The Group\u2019s acquired contractual customer relationships have an estimated weighted average remaining useful life of approximately four years. The useful lives are periodically reviewed and revised if necessary.
While the Group believes that the assumptions (such as attrition rates and product life cycles) used for the determi-nation of the useful lives of aforementioned intangibles are appropriate, significant differences in actual experience would affect the Group\u2019s future amortization expense.
27. GOODWILL AND INTANGIBLE ASSETS
MILLION EURO | Good-will | |||||||||
Intangible assets | ||||||||||
TOTAL | ||||||||||
Indefinite useful lives | Finite useful lives | |||||||||
Trademarks | Capitalized devel-opment costs | Acquired technol-ogy | ||||||||
Contrac-tual customer relation-ships | Trade-marks | |||||||||
Manage-ment informa-tion systems | ||||||||||
Software, licenses, conces-sions and IP rights | Advance payments to acquire intangible assets | |||||||||
Cost at December 31, 2022 | 379 | - | 2 | 61 | 43 | 5 | 131 | 58 | - | 679 |
Exchange differences | (7) | - | - | - | (2) | - | (1) | - | - | (10) |
Business combinations additions | - | - | - | - | - | - | - | - | - | - |
Business combinations divestment | (10) | - | - | (18) | (12) | (2) | (1) | (25) | - | (68) |
CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | - | (2) | - | (2) |
Capital expenditures | - | - | - | - | - | - | - | 1 | - | 1 |
Disposals and retirements | - | - | - | - | - | - | (2) | - | (2) | |
Construction in progress put into use | - | - | - | - | - | - | - | - | - | - |
Reclasses | - | - | - | - | - | - | - | 1 | - | 1 |
Cost at December 31, 2023 | 361 | - | 2 | 42 | 29 | 3 | 128 | 30 | - | 597 |
Exchange differences | 7 | - | - | (1) | 1 | - | 3 | 0 | - | 11 |
Business combinations additions | - | - | - | - | - | - | - | - | - | - |
Business combinations divestment | - | - | - | - | - | - | - | - | - | - |
CHP certificates and emission rights (non-cash) | - | - | - | - | - | - | - | 1 | - | 1 |
Capital expenditures | - | - | 7 | - | - | - | 0 | 1 | - | 8 |
Disposals and retirements | (32) | - | - | 6 | - | - | (19) | 14 | - | (30) |
Construction in progress put into use | - | - | - | - | - | - | - | - | - | - |
Reclasses | - | - | - | - | - | - | - | - | - | |
Cost at December 31, 2024 | 336 | - | 9 | 48 | 30 | 3 | 112 | 47 | - | 586 |
Accumulated amortization and impairment losses December 31, 2022 | (160) | - | (2) | (39) | (42) | (4) | (130) | (54) | - | (431) |
Exchange differences | 4 | - | - | - | 2 | - | - | - | - | 7 |
Business combinations divestment | 10 | - | - | 18 | 12 | 2 | 1 | 25 | - | 68 |
Amortization during the year | - | - | - | (2) | - | - | (1) | - | - | (4) |
Impairment loss during the year | - | - | - | - | - | - | - | - | - | - |
Disposals and retirements | - | - | - | - | - | - | - | - | - | 1 |
Reclasses | - | - | - | - | - | - | - | - | - | - |
Accumulated amortization and impairment losses December 31, 2023 | (146) | - | (2) | (24) | (28) | (2) | (128) | (28) | - | (358) |
Exchange differences | (5) | - | - | - | (1) | - | (3) | - | - | (9) |
Business combinations divestment | - | - | - | - | - | - | - | - | - | - |
Amortization during the year | - | - | - | (2) | - | - | - | (1) | - | (4) |
Impairment loss during the year | - | - | - | - | - | - | - | - | - | - |
Disposals and retirements | 32 | - | - | (6) | - | - | 19 | (16) | - | 29 |
Reclasses | - | - | - | - | - | - | - | - | - | - |
Accumulated amortization and impairment losses December 31, 2024 | (119) | - | (2) | (31) | (30) | (2) | (112) | (45) | - | (341) |
Carrying amount December 31, 2022 | 218 | - | - | 21 | 1 | 1 | 1 | 5 | - | 248 |
Carrying amount December 31, 2023 | 215 | - | - | 19 | 1 | 1 | - | 3 | - | 239 |
Carrying amount December 31, 2024 | 217 | - | 7 | 16 | 1 | 1 | - | 2 | - | 245 |
In 2024, the cash relevant capital expenditures for intangible assets amount to 8 million euro (2023: 1 million euro) and mainly relate to capitalized development costs and software and licences. The capitalized development costs relate to investments in cloud technology in the HealthCare IT business segment. The accounting treatment of capitalized development costs is disclosed in note 50.5 'Research and development expenses'.
Disposals and retirements in 2024 mainly relate to a clean-up of fully amortized intangible assets and related postings.
Business combinations disposals in 2023 relate to the sale of the Offset business (see note 20.1).
At year-end 2024, the Group does not hold intangible assets with indefinite useful lives for impairment. The Group has assessed whether there was an indication of impairment for intangible assets with finite useful lives. These tests did not result in the recording of an impairment loss.
The Group\u2019s management has reviewed the appropriateness of the useful lives of its major intangible assets at year-end 2024. This review has not resulted in revised amortization periods for intangible assets belonging to Digital Print and Chemicals and HealthCare IT.
More information on the underlying assumptions of the useful lives is provided in section 27.3 of this note.
27.1 IMPAIRMENT TESTS FOR GOODWILL
For the financial statements of the Group, goodwill is tested for impairment annually and whenever there is an indica-tion of impairment. For the purpose of impairment testing, goodwill is allocated to a cash-generating unit (CGU).
In line with the definition of cash-generating units, the management of the Group has identified the reportable seg-ments as the cash-generating units, i.e. Agfa HealthCare IT, Digital Print and Chemicals and Radiology Solutions. The operating segment is the lowest level within the Group at which the goodwill is monitored for internal management purposes (see note 6 \u2018Reportable segments\u2019).
At the end of 2024, the impairment test for goodwill was performed for the cash-generating units HealthCare IT and Digital Print and Chemicals. The other business segments do not comprise goodwill.
The impairment testing has been carried out by comparing the carrying amount of each cash-generating unit to its recoverable amount. The recoverable amount of the CGU has been determined based upon a value in use calculation. The value in use is determined as the present value of estimated future cash flows that are derived from the current long-term planning of the Group. The discount rate used in calculating the present value of the estimated future cash flows, is based on an average market participant\u2019s weighted average cost of equity and debt capital (WACC).
The WACC considers a debt/equity ratio for an average market\u2019s participant. The market beta is based on comparable peer companies and an additional risk premium is considered in the cost of equity. The cost of debt is based on the conditions on which comparable companies can obtain long-term financing.
The discount rate is calculated for each cash-generating unit independently, considering the debt/equity ratio of each peer group. The pre-tax discount rates are derived from the WACC by means of iteration.
27.1.1 CGU Agfa HealthCare IT
At December 31, 2024, the carrying amount of the CGU Agfa HealthCare IT of 301 million euro net of lease liabilities, comprises goodwill of 215 million euro (2023: 214 million euro). At year-end 2024, the Group tested its goodwill of HealthCare IT for impairment.
Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized.
The value in use of the CGU Agfa HealthCare IT has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years a terminal value is computed using a growth rate in the division Information Technologies (IT Solutions) of 3%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment\u2019s key manage-ment and are based on past performance and management\u2019s expectations for the market development.
Key assumptions are:
after-tax WACC: 10.11% (2023: 10.5%);
pre-tax discount rate: 12.54% (2023: 12.38%)
compound annual growth rate of revenue: 6.1% (2023: 7.3%)
terminal growth rate (after five years): 3% for IT Solutions (2023: 2%).
Sensitivity analyses on changes in key assumptions, i.e. growth rate and substantial changes in WACC, have been per-formed. The sensitivity analysis was based on a 100 basis point increase in the weighted average cost of capital and a decrease of 100 basis points in terminal growth rate and compound annual growth rate. The sensitivity analyses con-sider the change in one assumption at the time, leaving the other assumptions unchanged in the calculation. Possible correlation effects between the individual assumptions are not taken into account. These sensitivity analyses have not revealed any risk for impairment loss. Having ascertained the extent of change in these assumptions that either individually or collectively would be required for the goodwill to be potentially impaired management has assessed the likelihood of such movement in key assumptions as low.
27.1.2 CGU Digital Print and Chemicals
At December 31, 2024, the carrying amount of the CGU Digital Print and Chemicals of 236 million euro net of lease liabilities, comprises goodwill of 2 million euro (2023: 2 million euro). At year-end 2024, the Group tested its goodwill of Digital Print and Chemicals for impairment.
Based on the assumptions used, the calculated value in use of the CGU was higher than its carrying amount and no impairment loss was recognized. The value in use of the CGU Digital Print and Chemicals has been determined based on estimated cash flow projections covering the next five years. The estimated cash flow projections are based upon the strategic business plan formally approved by the Board of Directors. After five years, a terminal value is computed using a growth rate in the division of 3.47%. These growth rates are derived from respective market information.
The main assumptions used in the annual impairment test are determined by the reportable segment\u2019s key manage-ment and are based on past performance and management\u2019s expectations for the market development.
Key assumptions are:
after-tax WACC: 10.21% (2023: 10.83%);
pre-tax discount rate: 12.52% (2023: 14.03%);
compound annual growth rate of revenue 7.2% (2023: 9.7%);
terminal growth rate (after five years): 3.47% (2023: 3.58%).
Sensitivity analyses on changes in key assumptions, i.e. growth rate and substantial changes in WACC, have been per-formed. The sensitivity analysis was based on a 100 basis point increase in the weighted average cost of capital and a decrease of 100 basis points in terminal growth rate and compound annual growth rate. The sensitivity analyses con-sider the change in one assumption at the time, leaving the other assumptions unchanged in the calculation. Possible correlation effects between the individual assumptions are not taken into account. These sensitivity analyses have not revealed any risk for impairment loss. Having ascertained the extent of change in these assumptions that either individually or collectively would be required for the goodwill to be potentially impaired management has assessed the likelihood of such movement in key assumptions as low.
27.1.3 CGU Radiology Solutions
At the end of 2022, based on the impairment testing performed, the calculated value in use of the CGU was lower than its carrying amount and the goodwill and dedicated intangible assets with finite useful life were impaired in full in 2022. At December 31, 2024 the carrying amount of the cash generating unit Radiology Solutions, amounting to 86 million euro net of lease liabilities, does not comprise any goodwill. It comprises intangible assets with finite useful life amounting to 0,7 million euro. As the business environment for Radiology Solutions and more specific the performance of the medical film activity remains very challenging and given the continuous low performance of the business segment, management has tested the Group\u2019s intangibles, property, plant and equipment and right-of-use assets attributable to Radiology Solutions on possible impairment. The total balance of intangibles, property, plant and equipment and right-of-use assets subject to impairment testing amounted to 49 million euro. This review has resulted in the recognition of an impairment loss on property, plant and equipment and right-of-use assets for a total amount of 22 million euro (18 million euro on property, plant and equipment and 4 million euro on right-of-use assets). More information is disclosed in notes 28 and 29.
27.2 IMPAIRMENT TESTS FOR INTANGIBLE ASSETS WITH INDEFINITE USEFUL LIVES
At year-end 2024, the Group has no intangible assets with indefinite useful lives on its balance sheet.
27.3 USEFUL LIVES OF INTANGIBLE ASSETS WITH FINITE USEFUL LIVES
The useful life of an intangible asset is the period over which the asset is expected to contribute directly or indirectly to the future cash flows of the Group. Acquired technology and customer relationships are the most crucial recog-nized intangible assets with finite useful lives for the Group. For acquired technology, the estimation of the remaining useful life is based on the analysis of factors such as typical product life cycles in the industry and technological and commercial obsolescence arising mainly from expected actions by competitors or potential competitors.
At December 31, 2024, the net carrying amount of the Group\u2019s acquired technology amounted to 16 million euro (2023: 19 million euro). The Group\u2019s acquired technology has an estimated weighted average remaining useful life of approximately seven years. The useful lives are periodically reviewed and revised if necessary.
For acquired contractual customer relationships, the estimated remaining useful life is assessed by reference to customer attrition rates. For the estimation of appropriate customer attrition rates, the Group assesses the probability that existing contracts will be renegotiated. For the assessment of the probability that existing contracts can be rene-gotiated, demand as well as competition and other factors such as technological lock-in and related sunk costs are of importance. At December 31, 2024, the net carrying amount of the Group\u2019s remaining acquired contractual customer relationships amount to 1 million euro (2023: 1 million euro).
The Group\u2019s acquired contractual customer relationships have an estimated weighted average remaining useful life of approximately four years. The useful lives are periodically reviewed and revised if necessary.
While the Group believes that the assumptions (such as attrition rates and product life cycles) used for the determi-nation of the useful lives of aforementioned intangibles are appropriate, significant differences in actual experience would affect the Group\u2019s future amortization expense.
28. PROPERTY, PLANT AND EQUIPMENT
MILLION EURO | Land,buildings and infrastructure | Machineryand technicalequipment | Furniture, fixtures and other equipment | Construction in progress and advance payments to vendorsand contractors | TOTAL |
Cost at December 31, 2022 | 297 | 1,390 | 143 | 16 | 1,846 |
Exchange differences | (2) | (2) | (1) | - | (5) |
New lease contracts | - | - | - | - | - |
Capital expenditures | 1 | 17 | 4 | 12 | 33 |
Business combinations divestment | (55) | (239) | (27) | (14) | (335) |
Disposals and retirements | - | (31) | (5) | - | (36) |
Construction in progress put into use | - | - | - | (1) | - |
Reclasses | - | - | 2 | (1) | 1 |
Cost at December 31, 2023 | 239 | 1,136 | 117 | 13 | 1,505 |
Exchange differences | 1 | 4 | - | - | 5 |
New lease contracts | - | - | - | - | - |
Capital expenditures | 1 | 16 | 3 | 17 | 37 |
Business combinations divestment | - | - | - | - | - |
Disposals and retirements | (2) | (39) | (27) | - | (69) |
Construction in progress put into use | - | - | - | - | - |
Reclasses | (53) | 1 | 3 | (3) | (52) |
Cost at December 31, 2024 | 186 | 1,117 | 96 | 26 | 1,425 |
Accumulated depreciation and impairment losses December 31, 2022 | (273) | (1,319) | (133) | (14) | (1,739) |
Exchange differences | 2 | 2 | 1 | - | 4 |
Depreciation during the year | (2) | (13) | (6) | - | (22) |
Impairment loss during the year | - | (3) | - | - | (3) |
Business combinations divestment | 56 | 239 | 27 | 14 | 335 |
Disposals and retirements | - | 30 | 5 | - | 35 |
Reclasses | - | - | - | - | - |
Accumulated depreciation and impairment losses December 31, 2023 | (218) | (1,064) | (108) | - | (1,389) |
Exchange differences | (1) | (4) | - | - | (5) |
Depreciation during the year | (2) | (14) | (6) | - | (22) |
Impairment loss during the year | (1) | (16) | (1) | (2) | (20) |
Business combinations divestment | - | - | - | - | - |
Disposals and retirements | 2 | 39 | 27 | - | 69 |
Reclasses | 47 | - | - | - | 46 |
Accumulated depreciation and impairment losses December 31, 2024 | (173) | (1,058) | (89) | (2) | (1,321) |
Carrying amount December 31, 2022 | 24 | 71 | 10 | 2 | 107 |
Carrying amount December 31, 2023 | 22 | 72 | 8 | 13 | 115 |
Carrying amount December 31, 2024 | 13 | 60 | 7 | 24 | 104 |
In 2024, capital expenditure for property, plant and equipment amount to 37 million euro (2023: 33 million euro), of which 16 million euro (2023: 17 million euro) relates to machinery and technical equipment, mainly in Belgium for low CO2Econversion, production efficiency, maintenance, IT-related projects and of which 17 million euro (2023: 12 million euro) relates to construction in progress in Belgium and mainly for the new ZIRFON production plant.
Reclasses of land, buildings and infrastructure with a net bookvalue of 6 million euro relate to assets reclassed to Assets held for sale (see note 35).
The Group, as lessor, included assets subject to operating leases in its statement of financial position under the caption \u2018Other Equipment.\u2019 At the end of December 2024, the assets subject to operating leases have a total net carry-ing amount of 3 million euro (2023: 4 million euro) (see note 44).
Impairment assessment cash-generating unit Radiology Solutions
The 2022 impairment test has resulted in a full impairment of goodwill and intangible assets for the cash-generating unit Radiology Solutions (total impairment of 73 million euro). In 2023, an impairment loss amounting to 2 million euro on the dedicated assets of the medical film production activity in Mortsel had been recognized, the result of a review executed on the level of the cash-generating unit Radiology Solutions.
Both in 2023 as well as in 2024, adjusted EBITDAfor the division Radiology Solutions was significantly below budget due to a challenging business environment for Film and Print, mainly in China. Triggering events both from external and internal sources of information among which the continuous low performance of the business has resulted in a review of intangible assets, property, plant and equipment and right-of-use assets on possible impairment. As per December 31, 2024, the carrying amount of these assets before impairment amounted to 49 million euro and mainly comprised the Mortsel production facility (25 million euro). These assets are largely shared assets which have been consistently allocated to business divisions based on the expected usage of the available production facility.
As these assets do not generate cash inflows that are largely independent of those from other assets, recoverable amount is determined for the cash-generating unit to which the assets belong. Management has therefore prepared a recoverable amount assessment by discounting future cash flow projections of the cash-generating unit Radiology Solutions.
The impairment assessment for Radiology Solutions provides a valuation based on a five-year business plan of the division at a WACC rate of 9.25% (2023: WACC rate of 9.50%) and a terminal growth rate after five years of -1.7% (2023: terminal growth rate after ten years of -6.5%). Management applied a compound annual growth rate of revenue (CAGR) over the period 2025-2029 of -8.1%.
The calculation of the recoverable amount has resulted in an enterprise value below the carrying amount of the cash-generating unit Radiology Solutions. This has resulted in an impairment loss of 22 million euro (18 million euro on property, plant and equipment and 4 million euro on right-of-use assets) on top of the impairment losses recog-nized due to decommissioning of certain assets (2 million euro). There are no assets remaining that are dedicated to the Radiology Solutions CGU which are not impaired, except for certain assets that are expected to be disposed of at a value greater than their book value.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__65-1": { "value": "29. RIGHT-OF-USE ASSETS
Due to the application of IFRS 16, the Group \u2013 as lessee \u2013 recognizes right-of-use assets representing its right to use the underlying assets and lease liabilities representing its obligation to make lease payments. Exemptions are however made for short-term leases and leases of low value items such as the major part of the Group\u2019s ICT-equipment.
The right-of-use asset is initially measured at cost and subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In these cases, the right-of-use asset is depreciated over the useful life of the underlying asset, compliant with the methodology applicable for property, plant and equipment.
The following table shows a reconciliation to the closing balances at December 31, 2023, for the right-of-use assets, broken down by category. The Group distinguishes four categories: 1) right-of-use land, buildings and infrastructure, 2) right-of-use cars, 3) right-of-use other transportation equipment, mainly related to our manufacturing organiza-tions and 4) right-of-use other assets.
MILLION EURO | Right-of-useland, buildings,infrastructure | Right-of-use cars | Right-of-useother transportation equipment | Right-of-use other assets | TOTAL |
Cost at December 31, 2022 | 94 | 36 | 2 | 1 | 134 |
Exchange differences | (1) | - | - | - | (1) |
New lease contracts | 7 | 12 | - | - | 19 |
Lease revaluations | - | - | - | - | (1) |
Business combinations divestment | (26) | (8) | (1) | - | (35) |
Disposals and retirements | (15) | (10) | - | - | (25) |
Reclasses | - | - | - | - | - |
Cost at December 31, 2023 | 60 | 30 | 1 | 1 | 92 |
Exchange differences | 1 | - | - | - | 1 |
New lease contracts | 1 | 14 | - | - | 16 |
Lease revaluations | 10 | - | - | - | 9 |
Business combinations | - | - | - | - | - |
Disposals and retirements | (8) | (10) | - | - | (18) |
Reclasses | - | - | - | - | - |
Cost at December 31, 2024 | 64 | 35 | 1 | 1 | 100 |
Accumulated depreciation and impairment losses December 31, 2022 | (62) | (25) | (2) | (1) | (89) |
Exchange differences | 1 | - | - | - | 1 |
Depreciation during the year | (11) | (7) | - | - | (19) |
Impairment loss during the year | (4) | (1) | - | - | (5) |
Disposals and retirements | 14 | 10 | - | - | 25 |
Business combinations divestment | 26 | 8 | 1 | 35 | |
Reclasses | - | - | - | - | - |
Accumulated depreciation and impairment losses December 31, 2023 | (37) | (15) | (1) | - | (53) |
Exchange differences | - | - | - | - | - |
Depreciation during the year | (9) | (8) | - | - | (16) |
Impairment loss during the year | (4) | - | - | - | (4) |
Disposals and retirements | 8 | 10 | - | - | 18 |
Business combinations | - | - | - | - | - |
Reclasses | - | - | - | - | - |
Accumulated depreciation and impairment losses December 31, 2024 | (42) | (13) | - | (1) | (56) |
Carrying amount December 31, 2022 | 32 | 12 | 1 | 1 | 45 |
Carrying amount December 31, 2023 | 23 | 15 | - | 1 | 39 |
Carrying amount December 31, 2024 | 22 | 22 | - | 1 | 44 |
New lease contracts concluded during 2024 amounted to 16 million euro (2023: 19 million euro) and primarily relate to buildings, infrastructure and cars (mainly in Belgium). The increase in right-of-use assets equals the increase in lease liabilities. For additional information on the evolution of the lease liabilities, see note 38.
Lease revaluations made during 2024 amounting to 10 million euro (2023: -1 million euro) mainly relate to renewals of existing contracts mainly in Canada, Shanghai and the USA. The increase equals the increase in lease liabilities.
At the end of 2024, as a result of a reduced performance of the business segment Radiology Solutions, an impairment test was performed on Property, Plant and Equipment and right-of-use assets conform IAS 36, which resulted in an impairment loss on right-of-use assets of 4 million euro (more information is provided in note 28).
At the end of 2023, as a result of a reduced performance of the business segment Radiology Solutions, an impairment test was performed on Property, Plant and Equipment and Right-of-use assets conform IAS 36 (more information is provided in note 28).
In 2023, an impairment loss was recorded on right-of-use assets of 3 million euro related to empty space in Munich. During the first quarter of 2023 an impairment loss of 2 million euro was recorded on the right-of-use assets belong-ing to the former Offset Solutions business segment, which was disposed in April 2023. The latter impairment loss is part of the result from discontinued operations.
31. RECEIVABLES UNDER FINANCE LEASES
Lease agreements in which the other party, as lessee, is to be regarded as the economic owner of the leased assets give rise to accounts receivable in the amount of the discounted future lease payments. These receivables amounted to 87 million euro as of December 31, 2024 (2023: 101 million euro) and will bear interest income until their maturity dates of 9 million euro (2023: 11 million euro).
As of December31, 2024, the impairment losses on the receivables under finance leases amounted to 1 million euro (2023: 1 million euro).
The receivables under finance leases can be presented as follows:
2023 | 2024 | |||||
MILLION EURO | Total future payments | Unearnedinterest income | Presentvalue | Total future payments | Unearnedinterest income | Presentvalue |
Not later than one year | 38 | 5 | 33 | 37 | 4 | 33 |
Year +2 | 28 | 3 | 25 | 24 | 2 | 22 |
Year +3 | 21 | 2 | 19 | 18 | 1 | 17 |
Year +4 | 14 | 1 | 13 | 8 | 1 | 8 |
Year +5 | 6 | 1 | 6 | 4 | 1 | 4 |
Later than five years | 4 | - | 4 | 2 | - | 2 |
Total minimum lease payments | 111 | 11 | 100 | 94 | 9 | 85 |
Unguaranteed residual value | 1 | - | 1 | 2 | - | 2 |
TOTAL | 112 | 11 | 101 | 96 | 9 | 87 |
Impairment losses | (1) | - | - | (1) | ||
Receivables under finance lease | 100 | - | - | 87 |
The Group leases out its commercial equipment under finance leases mainly via Agfa Finance (i.e. Agfa Finance NV, Agfa Finance Corp. and Agfa Finance Inc.).
At the inception of the lease, the present value of the minimum lease payments generally amounts to at least 90% of the fair value of the leased assets. As manufacturer lessor, Agfa recognizes revenue at the fair value of the underlying asset discounted using a market rate of interest. On manufacturing leases, the Group recognizes revenue and related profit margin at the moment a Group\u2019s manufacturing organization or any related company invoices Agfa Finance at commencement of the lease with the external customer. The profit margin equals the profit margin that the Group realizes on equipment not part of finance lease agreements. Revenue related to finance leases offered via Agfa Finance amounts to 28 million euro in 2024 (2023: 37 million euro).
The major part of the leases concluded with Agfa Finance typically run for a non-cancellable period of four years. The contracts generally include an option to purchase the leased equipment after that period at a price that generally lies between 2% and 5% of the gross investment at the inception of the lease.
Agfa Finance offers its products via its subsidiaries in France and Italy and its branches in Europe (Spain, Switzer-land, Benelux, Germany, UK and the Nordic countries), via Agfa Finance Corp. in the USA and Agfa Finance Inc. in Canada. As of December 31, 2024, the present value of the total future lease payments before impairment losses for Agfa Finance amounted to 87 million euro (2023: 101 million euro).
Sometimes, the fair value of the leased asset is paid back by means of a purchase obligation for consumables at a value higher than its market value, in such a way that this mark-up is sufficient to cover the amount initially invested by the lessor. In these types of contracts the mark-up and or the lease term can be subject to change.
During 2024, the Group has sold receivables under finance lease for an amount of 7 million euro measured at carry-ing amount.
The risk management with regard to leases is covered by the divisional Credit and Collection policies. The credit and collection organization has the responsibility to define the credit and collection policy and submit for final approval and establish credit limits amongst other activities. Credit limits are defined by customer and cover all sales, being trade, service and on balance financing directly to its customer. Lease financing with periodical instalments via Agfa Finance do require a separate credit approval on a case-by-case approach.
44. OPERATING LEASES
Within the segment HealthCare IT, the Group offers Software as a Service (\u2018SaaS\u2019) which are offsite, onsite or hybrid models under which software, hardware and services are offered to the customer on a pay-per-use basis or a monthly/annual fee basis. The Group guarantees the management of the system over the contract period, and provides daily technical operations, maintenance and support to the customer. These contracts can comprise an operating lease component. The income related to managed service contracts, amounts to 20 million euro during 2024 (2023: 17 million euro). These are recognized in revenue based upon use/consumption by the client or based on a fixed fee. The future revenue related to fixed fee part of these contracts for 2025 amounts to 7 million euro and for the years between 1 and 5 years amounts to 21 million euro.
The total of assets in operating lease contracts recognized in the statement of financial position at December 31, 2024 amounts to 3 million euro (December 31, 2023: 4 million euro) (see note 28).
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__66": { "value": "30.1. INVESTMENTS IN ASSOCIATES
In the course of 2021, the Group established with other investment partners the company Penny Black, a start-up private limited liability company providing software and printing solutions for the e-commerce business. The Group holds an investment of 49.8% in this company. The investment in this associate is measured using the equity method. In the course of 2024, the Agfa-Gevaert Group made an extra investment of 0.6 million euro in this associate. During 2024, the Group has recognized losses amounting to 0.9 million euro in relation to its interest in this associate (2023: 0.8 million euro). Mid-January 2025, the Group sold its investment in Penny Black for 1.8 euro. Based on the recovera-ble amounts methodology, the remaining carrying amount of the investment in Penny Black after equity pick-up been fully impaired by the end of 2024. The impairment loss amounts to 0.2 million euro and is booked in 'Other finance expenses'.
MILLION EURO | 2023 | 2024 |
Penny Black (49.79%) | Penny Black (49.82%) | |
Carrying amount of interests, including goodwill | 0.5 | - |
Net loss after taxes\u00a0 | (1.6) | (1.8) |
Group\u2019s share of net loss after taxes\u00a0 | (0.8) | (0.9) |
Other Comprehensive Income | - | - |
Group\u2019s share of Other Comprehensive Income\u00a0 | - | - |
Summarized financial information\u00a0 | ||
Non-current assets | - | - |
Current assets | 0.8 | - |
Equity\u00a0 | 0.7 | 0.1 |
Current liabilities | 0.1 | 0.1 |
Group\u2019s share of equity\u00a0 | 0.5 | - |
Goodwill included in carrying amount of the investment | - | - |
Carrying amount of investment in other affiliates | 0.5 | - |
32. INVENTORIES
MILLION EURO | 2023 | 2024 |
Raw materials and auxiliaries | 47 | 57 |
Work in progress and semi-finished goods | 115 | 98 |
Finished goods | 18 | 24 |
Goods purchased for resale including spare parts | 111 | 114 |
Inventory in transit and other inventory | (3) | - |
TOTAL | 289 | 293 |
In 2024, inventories are written down to net realizable value for an amount of 10 million euro (2023: 11 million euro). These write-downs relate to obsolete, damaged or expired inventory. Write-downs of inventories are included in cost of sales in the consolidated statement of profit or loss. It is not possible to disclose separately impairment reversals of inventories because the impairments are the results of movements of increases and decreases.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__69": { "value": "33. OTHER RECEIVABLES
Other receivables can be presented as follows:
MILLION EURO | 2023 | 2024 |
Uninstalled leases(1), reimbursements | 5 | 2 |
Deferred purchase price related to the divestment of Offset | 35 | 31 |
Subsidies and grants | 5 | 6 |
Payroll receivables | 1 | 1 |
Other receivables | 1 | 3 |
TOTAL | 48 | 43 |
(1) Leased equipment not yet installed at the client\u2019s premises.
On April 3, 2023, the Agfa-Gevaert Group completed the sale of its Offset Solutions division to the investment firm Aurelius Group at a consideration of 46 million euro. In the second quarter of 2023 an amount of 11 million euro was received which brings the outstanding receivable to 35 million euro which is presented in other receivables on the balance sheet. Further discussions with the Aurelius Group have led to an agreement that 2 million euro of this outstanding receivable is not due. In the course of the fourth quarter of 2024, 2 million was received, reducing the outstanding receivable to 31 million euro on December 31, 2024 (see note 20.2).
The other receivables in 2024 comprise decommissioning of specific assets (2 million euro).
", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__70": { "value": "34. CASH AND CASH EQUIVALENTS
The reconciliation of cash and cash equivalents with its corresponding items in the statement of financial position can be presented as follows:
MILLION EURO | 2023 | 2024 |
Total cash and cash equivalents as reported in the consolidated statement of financial position | 75 | 68 |
Marketable securities | 2 | - |
Bank overdrafts (reported under current loans and borrowings) | - | - |
Total cash and cash equivalents as reported in the consolidated statement of cash flows | 77 | 68 |
The Group has 0.5 million euro restricted cash in Russia held in the headquarters cash pool. This cash can be used by the other entities by means of notional pooling, but not to be used within the Russian entity.
In addition a cash collateral of 0.6 million euro is also considered as restricted cash.
The credit quality of the banks and financial institutions that the Group is working with, can be presented as follows:
MILLION EURO | 2023 | 2024 |
A+ | 16.9 | 17 |
A | 14.2 | 7.1 |
A- | 32 | 25.6 |
BB+ | 6.3 | 6.3 |
BB- | - | 1.1 |
B | 0.6 | - |
Other | 7 | 10.9 |
TOTAL | 77 | 68 |
35. NON-CURRENT ASSETS HELD FOR SALE
In 2024, assets with a net book value of 6 million euro were reclassed from property, plant and equipment to non-cur-rent assets held for sale. These assets relate to the closed site in Schrobenhausen (Germany) and another building in the USA. These assets are intented to be sold in 2025.
The non-current assets, classified as held-for-sale also contain the planned sale of the closed offset printing plate factory in Vallese (Italy) belonging to the former Offset Solutions segment. The sale was already delayed some time and is now planned in next year.
Related land, buildings and infrastructure of these non-current assets held for sale are measured at their carrying amount at December 31, which is lower than the fair value less costs to sell.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsHeldForSaleAndDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__72": { "value": "35. NON-CURRENT ASSETS HELD FOR SALE
In 2024, assets with a net book value of 6 million euro were reclassed from property, plant and equipment to non-cur-rent assets held for sale. These assets relate to the closed site in Schrobenhausen (Germany) and another building in the USA. These assets are intented to be sold in 2025.
The non-current assets, classified as held-for-sale also contain the planned sale of the closed offset printing plate factory in Vallese (Italy) belonging to the former Offset Solutions segment. The sale was already delayed some time and is now planned in next year.
Related land, buildings and infrastructure of these non-current assets held for sale are measured at their carrying amount at December 31, which is lower than the fair value less costs to sell.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__73": { "value": "35. NON-CURRENT ASSETS HELD FOR SALE
In 2024, assets with a net book value of 6 million euro were reclassed from property, plant and equipment to non-cur-rent assets held for sale. These assets relate to the closed site in Schrobenhausen (Germany) and another building in the USA. These assets are intented to be sold in 2025.
The non-current assets, classified as held-for-sale also contain the planned sale of the closed offset printing plate factory in Vallese (Italy) belonging to the former Offset Solutions segment. The sale was already delayed some time and is now planned in next year.
Related land, buildings and infrastructure of these non-current assets held for sale are measured at their carrying amount at December 31, which is lower than the fair value less costs to sell.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAvailableforsaleAssetsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__74": { "value": "36. OTHER ASSETS
Other non-current and current assets can be presented as follows:
MILLION EURO | 2023 | 2024 |
Non-current | ||
Multi year service contracts (strategic suppliers) | 4 | 4 |
Prepayments | - | - |
Total non-current | 4 | 4 |
Current | ||
Multi year service contracts (strategic suppliers)\u00a0 | 8 | 7 |
Advances on costs\u00a0 | - | - |
Guarantees and deposits\u00a0 | 2 | 4 |
Prepayments | 2 | 4 |
Other\u00a0 | - | - |
Total current | 13 | 15 |
TOTAL | 17 | 19 |
36. OTHER ASSETS
Other non-current and current assets can be presented as follows:
MILLION EURO | 2023 | 2024 |
Non-current | ||
Multi year service contracts (strategic suppliers) | 4 | 4 |
Prepayments | - | - |
Total non-current | 4 | 4 |
Current | ||
Multi year service contracts (strategic suppliers)\u00a0 | 8 | 7 |
Advances on costs\u00a0 | - | - |
Guarantees and deposits\u00a0 | 2 | 4 |
Prepayments | 2 | 4 |
Other\u00a0 | - | - |
Total current | 13 | 15 |
TOTAL | 17 | 19 |
36. OTHER ASSETS
Other non-current and current assets can be presented as follows:
MILLION EURO | 2023 | 2024 |
Non-current | ||
Multi year service contracts (strategic suppliers) | 4 | 4 |
Prepayments | - | - |
Total non-current | 4 | 4 |
Current | ||
Multi year service contracts (strategic suppliers)\u00a0 | 8 | 7 |
Advances on costs\u00a0 | - | - |
Guarantees and deposits\u00a0 | 2 | 4 |
Prepayments | 2 | 4 |
Other\u00a0 | - | - |
Total current | 13 | 15 |
TOTAL | 17 | 19 |
37.1 SHARE CAPITAL AND SHARE PREMIUM
At December 31, 2024 and 2023, the issued capital of the Company amounts to 187 million euro. The outstanding ordi-nary shares amount to 154,820,528 at December 31, 2024 (2023: 154,820,528 outstanding shares).
The Board of Directors has invited the shareholders to participate in the Special and Extraordinary General Meeting of Shareholders held on February 28, 2025. On this meeting, a reduction of the capital of the Company to the amount of EUR 26,000,000.00 was proposed, by offsetting losses incurred in the amount of EUR 160,794,611.00, and corresponding amendment of Article 5 of the Articles of Association. The attendance quorum for the Extraordinary General Meeting was not reached. Consequently, this meeting is held on March 11, 2025, during which the proposed capital reduction was approved.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__79": { "value": "37.2 RESERVE FOR OWN SHARES
The reserve for the Company\u2019s own shares comprises the cost of the Company\u2019s shares held by the Group. At Decem-ber 31, 2024, the Group does not hold own shares (2023: nil).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__82": { "value": "37.6 TRANSLATION RESERVE
The translation reserve comprises all foreign currency differences arising from the translation of the financial state-ments of foreign operations, as well as from the translation of financial instruments that hedge the Company\u2019s net investment in a foreign subsidiary.
Until May 2016, the Group utilized USD forward exchange contracts to hedge the foreign currency exposure of the Group\u2019s net investment in one of its subsidiaries in the United States. As from May 2016, the Group has revoked the designation of the hedge. The gain on the hedging instrument relating to the effective portion of the hedge that was recognized in Other comprehensive income (December 31, 2024: 3 million euro, December 31, 2023: 3 million euro) shall be reclassified from equity to profit or loss on the disposal of the foreign entity.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__83": { "value": "37.7 DIVIDENDS
For 2023, no dividend has been paid out. For 2024, no dividend will be recommended by the Board of Directors to the General Assembly of Shareholders held on May 13, 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDividendsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__84": { "value": "37.8 Non-controlling interests
Until the disposal of the Offset business, non-controlling interests had a material interest in nine subsidiaries in Greater China and the ASEAN region. As of April 2023, these subsidiaries have been disposed (see note 20.2). The derecognition of non-controlling interests following the loss of control amounts to 33 million euro. During the first quarter of 2023, dividends amounting to 9 million euro have been paid to Shenzhen Brother Gao Deng Investment Group Co.
Remaining non-controlling interests relate to a few subsidiaries in Europa and are of minor importance to the Group. At December 31, 2024, non-controlling interests amount to 2 million euro (December 31, 2023: 1 million euro).
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__85-1": { "value": "38.1 REVOLVING CREDIT FACILITY
On March 5, 2021, Agfa-Gevaert NV closed a three-year multi-currency revolving credit facility of 230 million euro. This facility is unsecured and provides for an extension of the term of two times one year. In the course of 2022, the facility has been extended with one additional year, extending the maturity date till March 2025. In January 2023, this facility had again been extended with one additional year till March 2026. The financial institutions have extended the maturity to May 30, 2026. Management is currently in negotiations with financial institutions regarding the refinancing of this credit facility. The Board of Directors is confident of reaching an agreement with the financial institutions that is appropriate for the Company. The revolving credit facility will be used for general corporate pur-poses. The applicable interest rate is Euribor, Libor or its equivalent replacement benchmark (Reuters) and a margin. In general, drawdowns under this facility are made for short periods, but the Group has the discretion to rollover the liability under the existing committed loan facility. More information on covenants and liquidity management is provided in note 4 \u2018Significant accounting estimates and judgments\u2019.
At December 31, 2024, there is a drawdown of 100 million euro under this facility (2023: 40 million euro).
MILLION EURO | Notional amount | Outstanding amount | Currency | Interest rate | |||
Maturity date | 2023 | 2024 | 2023 | 2024 | 2023 | 2024 | |
2026 | 230 | 230 | 40 | 100 | EUR | 5.0% | 4.7% |
TOTAL | 230 | 230 | 40 | 40 |
38.2 LEASE LIABILITIES
The Group mainly leases buildings (such as office buildings and warehouses), company cars, other transportation equipment (such as forklifts), and other equipment (such as IT equipment).
Building leases include both annually renewable contracts with options to renew the lease as well as leases with longer fixed lease terms. The lease liability relating to building leases amounts to 27 million euro or approximately 55% of the Group\u2019s lease liability, and has an average estimated remaining lease term of three years.
Company car leases typically run for a period of four to five years and represent approximately 44% of the Group\u2019s lease liability, 22 million euro. Other leases represent less than 1% of the Group\u2019s lease liability and include forklifts, printers, packaging systems, etc.
Lease liabilities are payable as follows:
MILLION EURO | 2023 | 2024 | ||
Maturing\u00a0 | Outstanding amount | Incremental borrowing rate | Outstanding amount | Incremental borrowing rate |
< 1 year | 14 | 3.6% | 15 | 4.6% |
Between 1-5 years | 26 | 4.4% | 33 | 4.8% |
> 5 years | 3 | 3.7% | 2 | 3.8% |
TOTAL\u00a0 | 43 | 50 |
Lease liabilities do not comprise costs for low value leases, short-term leases and other out of scope costs, amounting to 9 million euro in total (2023: 10 million euro).
38.3 LIABILITIES TO BANKS
For the financing of the new ZIRFON plant in Mortsel, the Company has negotiated a leasing agreement with a finan-cial institution for an investment amount of 30 million euro. The term of the agreement is seven years and estimated start date will be in quarter four of 2025, the moment the new plant is put into operation.
The lease agreement comprises two components:
A lease component in scope of IFRS 16 amounting to 9 million euro, whereby the different constructors of the ZIRFON plant directly invoice the financial institution, and for which the Group will recognize right-of-use assets at activation of the lease contract foreseen in quarter four of 2025. In the course of 2024, an amount of 3 million euro was prefinanced by the financial institution to the different constructors. Agfa pays interests on this prefinancing amount at EURIBOR three months +1.5%.
A sale and lease back-component in scope of IFRS 9 amounting to 21 million euro whereby the Company will sell its activated assets under construction to the financial institution and lease it back. As the sale is not a true sale under IFRS 15, a financial liability will be booked for the amount received from the financial institution. At December 31, 2024, a financial liability of 5 million euro is recorded related to the sale and lease back component. The interest due is EURIBOR three months +1,5%.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__88": { "value": "39. PROVISIONS
As of December 31, 2024, provisions amounted to 60 million euro (2023: 20 million euro).
MILLION EURO | Environmental | Trade-related | Restructuring | Other | TOTAL |
Provisions at December 31, 2023 | 2 | 5 | 11 | 1 | 20 |
Provisions made during the year | 3 | 4 | 44 | - | 51 |
Provisions used during the year | - | (1) | (7) | - | (8) |
Business combinations divestment | - | - | - | - | - |
Provisions reversed during the year | (1) | (2) | (1) | - | (4) |
Exchange differences | - | - | - | - | - |
Transfers | - | - | - | - | - |
Provisions at December 31, 2024 | 4 | 7 | 48 | 1 | 60 |
Provisions for environmental protection relate to future re-landscaping, landfill modernization and the remediation of land contaminated by past industrial operations. Provisions made during the year relate to a provision for new emission rights.
Provisions for trade-related commitments at closing date and related flows during the year primarily comprise com-missions to agents, warranty provisions and commercial litigations.
Provisions for restructuring at closing date and related flows during the year mainly comprise employee related costs regarding the announced reorganization of the manufacturing plant in Belgium and the closure of the Schroben-hausen site in Germany.
Other provisions comprise legal claims (including lawyer fees) and a legal claim regarding import duties.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__89": { "value": "39. PROVISIONS
As of December 31, 2024, provisions amounted to 60 million euro (2023: 20 million euro).
MILLION EURO | Environmental | Trade-related | Restructuring | Other | TOTAL |
Provisions at December 31, 2023 | 2 | 5 | 11 | 1 | 20 |
Provisions made during the year | 3 | 4 | 44 | - | 51 |
Provisions used during the year | - | (1) | (7) | - | (8) |
Business combinations divestment | - | - | - | - | - |
Provisions reversed during the year | (1) | (2) | (1) | - | (4) |
Exchange differences | - | - | - | - | - |
Transfers | - | - | - | - | - |
Provisions at December 31, 2024 | 4 | 7 | 48 | 1 | 60 |
Provisions for environmental protection relate to future re-landscaping, landfill modernization and the remediation of land contaminated by past industrial operations. Provisions made during the year relate to a provision for new emission rights.
Provisions for trade-related commitments at closing date and related flows during the year primarily comprise com-missions to agents, warranty provisions and commercial litigations.
Provisions for restructuring at closing date and related flows during the year mainly comprise employee related costs regarding the announced reorganization of the manufacturing plant in Belgium and the closure of the Schroben-hausen site in Germany.
Other provisions comprise legal claims (including lawyer fees) and a legal claim regarding import duties.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__90": { "value": "40. OTHER PAYABLES
The other payables at December 31, 2024, amounting to 5 million euro (2023: 9 million euro) comprise patents, tanti\u00e8mes, finance leases, liabilities against staff resulting from compensation of travel and other personal related expenses and other various amounts payable.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__91": { "value": "42. INVESTMENTS IN SUBSIDIARIES
The ultimate parent of the Group is Agfa-Gevaert NV (BE 0404 021 727), Mortsel (Belgium). The Company is the parent company for the following significant subsidiaries.
Consolidated companies, December 31, 2024 | ||
Name of the company | Location | Effective interest % |
Agfa (Wuxi) Imaging Co. Ltd. | Wuxi/PR China | 99.16 |
Agfa Corporation | Carlstadt/United States of America | 100 |
Agfa Finance Corp. | Wilmington/United States of America | 100 |
Agfa Finance Inc. | Toronto/Canada | 100 |
Agfa Finance Italy SpA | Milan/Italy | 100 |
Agfa Finance NV\u00a0 | Mortsel/Belgium | 100 |
Agfa Middle East FZCO | Dubai/United Arab Emirates | 100 |
Agfa NV\u00a0 | Mortsel/Belgium | 100 |
Agfa Graphics S.r.l. | Milano/Italy | 100 |
Agfa S.A. (Arg) | Buenos Aires/Argentina | 100 |
Agfa HealthCare Australia Pty. Ltd. | Burwood East/Australia | 100 |
Agfa Do Brasil Ltda. | Sao Paulo/Brazil | 100 |
Agfa HealthCare Chile Ltda. | Santiago de Chile/Chile | 100 |
Agfa HealthCare Colombia Ltda. | Bogota/Colombia | 100 |
Agfa HealthCare Corporation | Greenville/United States of America | 100 |
Agfa HealthCare Denmark A/S | Copenhagen/Denmark | 100 |
Agfa HealthCare Germany GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa HealthCare Hong Kong Ltd. | Hong Kong/PR China | 100 |
Agfa HealthCare Inc. | Mississauga/Canada | 100 |
Agfa HealthCare India Private Ltd. | Thane/India | 100 |
Agfa HealthCare Malaysia Sdn. Bhd. | Kuala Lumpur/Malaysia | 100 |
Agfa HealthCare Mexico S.A. de CV | Mexico D.F./Mexico\u00a0 | 100 |
Agfa HealthCare NV\u00a0 | Mortsel/Belgium | 100 |
Agfa HealthCare Saudi Arabia Company Limited LLC | Riyadh/Saudi Arabia | 100 |
Agfa HealthCare (Shanghai) Co. Ltd.\u00a0 | Shanghai/PR China | 100 |
Agfa HealthCare Singapore Pte. Ltd. | Singapore/Republic of Singapore | 100 |
Agfa HealthCare South Africa Pty. Ltd. | Gauteng/Republic of South Africa | 100 |
Agfa HealthCare Spain S.A.U.\u00a0 | Barcelona/Spain | 100 |
Agfa HealthCare Sweden AB\u00a0 | Kista/Sweden | 100 |
Agfa HealthCare UK Ltd. | Cambridge/United Kingdom | 100 |
Agfa Inc. | Mississauga/Canada | 100 |
Agfa Ltd. | Dublin/Ireland | 100 |
Agfa Materials Corporation | Goose Creek/United States of America | 100 |
Agfa Materials Japan Ltd. | Tokyo/Japan | 100 |
Agfa Materials Taiwan Co. Ltd. | Taipei/Taiwan | 100 |
Agfa Solutions S.A.S | Rueil-Malmaison/France | 100 |
Agfa Sp. z.o.o. | Warsaw/Poland | 100 |
Agfa-Gevaert M.A.E.B.E. | Athens/Greece | 100 |
Agfa GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa-Gevaert Argentina S.A. | Buenos Aires/Argentina | 98.33 |
Agfa HealthCare Netherlands B.V. | Rijswijk/the Netherlands | 100 |
Agfa-Gevaert Colombia S.A.S | Bogota/Colombia | 100 |
Agfa-Gevaert HealthCare GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa-Gevaert Ltda. | Santiago de Chile/Chile | 100 |
Agfa-Gevaert GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa HealthCare Italy S.p.A. | Milan/Italy | 100 |
Lastra Attrezzature S.r.l. | Manerbio/Italy | 60 |
Luithagen NV\u00a0 | Mortsel/Belgium | 100 |
OOO Agfa\u00a0 | Moscow/Russian Federation | 100 |
Agfa HealthCare Kazakhstan LLP | Almaty/Republic of Kazakhstan | 100 |
Agfa HealthCare Ukraine LLC | Kyiv/Ukraine | 100 |
PT Gevaert-Agfa HealthCare Indonesia | Jakarta/Indonesia | 100 |
Agfa HealthCare Middle East FZ-LLC | Dubai/United Arab Emirates | 100 |
Agfa HealthCare IT UK Limited | Middlesex/United Kingdom | 100 |
Agfa South Africa (Pty) Ltd. | Gauteng/Republic of South Africa | 100 |
Agfa Australia Pty Ltd. | Burwood East/Australia | 100 |
Agfa Canada Inc. | Mississauga/Canada | 100 |
Agfa US Corp. | Carlstadt/United States of America | 100 |
Agfa HealthCare IT (Shanghai) Co. Ltd. | Shanghai/PR China | 100 |
Agfa Hong Kong Ltd.\u00a0 | Hong Kong/PR China | 100 |
Agfa HealthCare Vietnam Co. Ltd. | Ho Chi Minh City/Vietnam | 100 |
Agfa Materials Korea Ltd. | Seoul/Korea | 100 |
Agfa R\u00e9 S.A. | Luxembourg/Luxembourg | 100 |
Inca Digital Printers | Cambridge/United Kingdom | 100 |
Agfa IJC | Cambridge/United Kingdom | 100 |
Agfa Alterssicherungs-AG | D\u00fcsseldorf/Germany | 100 |
42. INVESTMENTS IN SUBSIDIARIES
The ultimate parent of the Group is Agfa-Gevaert NV (BE 0404 021 727), Mortsel (Belgium). The Company is the parent company for the following significant subsidiaries.
Consolidated companies, December 31, 2024 | ||
Name of the company | Location | Effective interest % |
Agfa (Wuxi) Imaging Co. Ltd. | Wuxi/PR China | 99.16 |
Agfa Corporation | Carlstadt/United States of America | 100 |
Agfa Finance Corp. | Wilmington/United States of America | 100 |
Agfa Finance Inc. | Toronto/Canada | 100 |
Agfa Finance Italy SpA | Milan/Italy | 100 |
Agfa Finance NV\u00a0 | Mortsel/Belgium | 100 |
Agfa Middle East FZCO | Dubai/United Arab Emirates | 100 |
Agfa NV\u00a0 | Mortsel/Belgium | 100 |
Agfa Graphics S.r.l. | Milano/Italy | 100 |
Agfa S.A. (Arg) | Buenos Aires/Argentina | 100 |
Agfa HealthCare Australia Pty. Ltd. | Burwood East/Australia | 100 |
Agfa Do Brasil Ltda. | Sao Paulo/Brazil | 100 |
Agfa HealthCare Chile Ltda. | Santiago de Chile/Chile | 100 |
Agfa HealthCare Colombia Ltda. | Bogota/Colombia | 100 |
Agfa HealthCare Corporation | Greenville/United States of America | 100 |
Agfa HealthCare Denmark A/S | Copenhagen/Denmark | 100 |
Agfa HealthCare Germany GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa HealthCare Hong Kong Ltd. | Hong Kong/PR China | 100 |
Agfa HealthCare Inc. | Mississauga/Canada | 100 |
Agfa HealthCare India Private Ltd. | Thane/India | 100 |
Agfa HealthCare Malaysia Sdn. Bhd. | Kuala Lumpur/Malaysia | 100 |
Agfa HealthCare Mexico S.A. de CV | Mexico D.F./Mexico\u00a0 | 100 |
Agfa HealthCare NV\u00a0 | Mortsel/Belgium | 100 |
Agfa HealthCare Saudi Arabia Company Limited LLC | Riyadh/Saudi Arabia | 100 |
Agfa HealthCare (Shanghai) Co. Ltd.\u00a0 | Shanghai/PR China | 100 |
Agfa HealthCare Singapore Pte. Ltd. | Singapore/Republic of Singapore | 100 |
Agfa HealthCare South Africa Pty. Ltd. | Gauteng/Republic of South Africa | 100 |
Agfa HealthCare Spain S.A.U.\u00a0 | Barcelona/Spain | 100 |
Agfa HealthCare Sweden AB\u00a0 | Kista/Sweden | 100 |
Agfa HealthCare UK Ltd. | Cambridge/United Kingdom | 100 |
Agfa Inc. | Mississauga/Canada | 100 |
Agfa Ltd. | Dublin/Ireland | 100 |
Agfa Materials Corporation | Goose Creek/United States of America | 100 |
Agfa Materials Japan Ltd. | Tokyo/Japan | 100 |
Agfa Materials Taiwan Co. Ltd. | Taipei/Taiwan | 100 |
Agfa Solutions S.A.S | Rueil-Malmaison/France | 100 |
Agfa Sp. z.o.o. | Warsaw/Poland | 100 |
Agfa-Gevaert M.A.E.B.E. | Athens/Greece | 100 |
Agfa GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa-Gevaert Argentina S.A. | Buenos Aires/Argentina | 98.33 |
Agfa HealthCare Netherlands B.V. | Rijswijk/the Netherlands | 100 |
Agfa-Gevaert Colombia S.A.S | Bogota/Colombia | 100 |
Agfa-Gevaert HealthCare GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa-Gevaert Ltda. | Santiago de Chile/Chile | 100 |
Agfa-Gevaert GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa HealthCare Italy S.p.A. | Milan/Italy | 100 |
Lastra Attrezzature S.r.l. | Manerbio/Italy | 60 |
Luithagen NV\u00a0 | Mortsel/Belgium | 100 |
OOO Agfa\u00a0 | Moscow/Russian Federation | 100 |
Agfa HealthCare Kazakhstan LLP | Almaty/Republic of Kazakhstan | 100 |
Agfa HealthCare Ukraine LLC | Kyiv/Ukraine | 100 |
PT Gevaert-Agfa HealthCare Indonesia | Jakarta/Indonesia | 100 |
Agfa HealthCare Middle East FZ-LLC | Dubai/United Arab Emirates | 100 |
Agfa HealthCare IT UK Limited | Middlesex/United Kingdom | 100 |
Agfa South Africa (Pty) Ltd. | Gauteng/Republic of South Africa | 100 |
Agfa Australia Pty Ltd. | Burwood East/Australia | 100 |
Agfa Canada Inc. | Mississauga/Canada | 100 |
Agfa US Corp. | Carlstadt/United States of America | 100 |
Agfa HealthCare IT (Shanghai) Co. Ltd. | Shanghai/PR China | 100 |
Agfa Hong Kong Ltd.\u00a0 | Hong Kong/PR China | 100 |
Agfa HealthCare Vietnam Co. Ltd. | Ho Chi Minh City/Vietnam | 100 |
Agfa Materials Korea Ltd. | Seoul/Korea | 100 |
Agfa R\u00e9 S.A. | Luxembourg/Luxembourg | 100 |
Inca Digital Printers | Cambridge/United Kingdom | 100 |
Agfa IJC | Cambridge/United Kingdom | 100 |
Agfa Alterssicherungs-AG | D\u00fcsseldorf/Germany | 100 |
42. INVESTMENTS IN SUBSIDIARIES
The ultimate parent of the Group is Agfa-Gevaert NV (BE 0404 021 727), Mortsel (Belgium). The Company is the parent company for the following significant subsidiaries.
Consolidated companies, December 31, 2024 | ||
Name of the company | Location | Effective interest % |
Agfa (Wuxi) Imaging Co. Ltd. | Wuxi/PR China | 99.16 |
Agfa Corporation | Carlstadt/United States of America | 100 |
Agfa Finance Corp. | Wilmington/United States of America | 100 |
Agfa Finance Inc. | Toronto/Canada | 100 |
Agfa Finance Italy SpA | Milan/Italy | 100 |
Agfa Finance NV\u00a0 | Mortsel/Belgium | 100 |
Agfa Middle East FZCO | Dubai/United Arab Emirates | 100 |
Agfa NV\u00a0 | Mortsel/Belgium | 100 |
Agfa Graphics S.r.l. | Milano/Italy | 100 |
Agfa S.A. (Arg) | Buenos Aires/Argentina | 100 |
Agfa HealthCare Australia Pty. Ltd. | Burwood East/Australia | 100 |
Agfa Do Brasil Ltda. | Sao Paulo/Brazil | 100 |
Agfa HealthCare Chile Ltda. | Santiago de Chile/Chile | 100 |
Agfa HealthCare Colombia Ltda. | Bogota/Colombia | 100 |
Agfa HealthCare Corporation | Greenville/United States of America | 100 |
Agfa HealthCare Denmark A/S | Copenhagen/Denmark | 100 |
Agfa HealthCare Germany GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa HealthCare Hong Kong Ltd. | Hong Kong/PR China | 100 |
Agfa HealthCare Inc. | Mississauga/Canada | 100 |
Agfa HealthCare India Private Ltd. | Thane/India | 100 |
Agfa HealthCare Malaysia Sdn. Bhd. | Kuala Lumpur/Malaysia | 100 |
Agfa HealthCare Mexico S.A. de CV | Mexico D.F./Mexico\u00a0 | 100 |
Agfa HealthCare NV\u00a0 | Mortsel/Belgium | 100 |
Agfa HealthCare Saudi Arabia Company Limited LLC | Riyadh/Saudi Arabia | 100 |
Agfa HealthCare (Shanghai) Co. Ltd.\u00a0 | Shanghai/PR China | 100 |
Agfa HealthCare Singapore Pte. Ltd. | Singapore/Republic of Singapore | 100 |
Agfa HealthCare South Africa Pty. Ltd. | Gauteng/Republic of South Africa | 100 |
Agfa HealthCare Spain S.A.U.\u00a0 | Barcelona/Spain | 100 |
Agfa HealthCare Sweden AB\u00a0 | Kista/Sweden | 100 |
Agfa HealthCare UK Ltd. | Cambridge/United Kingdom | 100 |
Agfa Inc. | Mississauga/Canada | 100 |
Agfa Ltd. | Dublin/Ireland | 100 |
Agfa Materials Corporation | Goose Creek/United States of America | 100 |
Agfa Materials Japan Ltd. | Tokyo/Japan | 100 |
Agfa Materials Taiwan Co. Ltd. | Taipei/Taiwan | 100 |
Agfa Solutions S.A.S | Rueil-Malmaison/France | 100 |
Agfa Sp. z.o.o. | Warsaw/Poland | 100 |
Agfa-Gevaert M.A.E.B.E. | Athens/Greece | 100 |
Agfa GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa-Gevaert Argentina S.A. | Buenos Aires/Argentina | 98.33 |
Agfa HealthCare Netherlands B.V. | Rijswijk/the Netherlands | 100 |
Agfa-Gevaert Colombia S.A.S | Bogota/Colombia | 100 |
Agfa-Gevaert HealthCare GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa-Gevaert Ltda. | Santiago de Chile/Chile | 100 |
Agfa-Gevaert GmbH | D\u00fcsseldorf/Germany | 100 |
Agfa HealthCare Italy S.p.A. | Milan/Italy | 100 |
Lastra Attrezzature S.r.l. | Manerbio/Italy | 60 |
Luithagen NV\u00a0 | Mortsel/Belgium | 100 |
OOO Agfa\u00a0 | Moscow/Russian Federation | 100 |
Agfa HealthCare Kazakhstan LLP | Almaty/Republic of Kazakhstan | 100 |
Agfa HealthCare Ukraine LLC | Kyiv/Ukraine | 100 |
PT Gevaert-Agfa HealthCare Indonesia | Jakarta/Indonesia | 100 |
Agfa HealthCare Middle East FZ-LLC | Dubai/United Arab Emirates | 100 |
Agfa HealthCare IT UK Limited | Middlesex/United Kingdom | 100 |
Agfa South Africa (Pty) Ltd. | Gauteng/Republic of South Africa | 100 |
Agfa Australia Pty Ltd. | Burwood East/Australia | 100 |
Agfa Canada Inc. | Mississauga/Canada | 100 |
Agfa US Corp. | Carlstadt/United States of America | 100 |
Agfa HealthCare IT (Shanghai) Co. Ltd. | Shanghai/PR China | 100 |
Agfa Hong Kong Ltd.\u00a0 | Hong Kong/PR China | 100 |
Agfa HealthCare Vietnam Co. Ltd. | Ho Chi Minh City/Vietnam | 100 |
Agfa Materials Korea Ltd. | Seoul/Korea | 100 |
Agfa R\u00e9 S.A. | Luxembourg/Luxembourg | 100 |
Inca Digital Printers | Cambridge/United Kingdom | 100 |
Agfa IJC | Cambridge/United Kingdom | 100 |
Agfa Alterssicherungs-AG | D\u00fcsseldorf/Germany | 100 |
43. EQUITY ACCOUNTED INVESTEES
Associated companies, December 31, 2024 | ||
Name of the company | Location | Effective interest % |
Penny Black BV | Antwerp/Belgium | 49.82 |
OTHER INFORMATION
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__96": { "value": "45. COMMITMENTS AND CONTINGENCIES
45.1 CONTINGENCIES
Contingencies resulted entirely from commitments given to third parties and comprise:
MILLION EURO | 2023 | 2024 |
Bank guarantees | 33 | 42 |
Other | - | - |
Corporate guarantees | 173 | 131 |
TOTAL | 206 | 173 |
Corporate guarantees mainly relate to guarantees given by the parent company on behalf of its subsidiaries towards banks and mainly relate to the revolving credit facility (see note 38.1) and other negotiated credit lines.
The purchase commitments in connection with major capital expenditure projects for which the respective contracts have already been awarded or orders placed amount to 20 million euro of which 12 million euro relates to the new ZIRFON plant.
45.2 LEGAL RISKS/CONTINGENCIES
The Group is currently not involved in any major litigation apart from those related to the AgfaPhoto insolvency.
AgfaPhoto
In connection with the divestment of the Consumer Imaging business of Agfa-Gevaert AG and certain of its subsid-iaries, the Group entered into various contractual relationships with AgfaPhoto Holding GmbH, AgfaPhoto GmbH and their subsidiaries in various countries (the \u2018AgfaPhoto group\u2019), providing for the transfer of its Consumer Imaging business, including assets, liabilities, contracts and employees, to AgfaPhoto group companies.
Subsequent to the divestment, insolvency proceedings have been opened with respect to AgfaPhoto GmbH and a number of its subsidiaries in both Germany and other countries. The Group had been sued through lawsuits or other actions in various countries in connection with a number of disputes. Those disputes have been resolved, with the exception of the following dispute.
With respect to that divestment, the insolvency receiver of AgfaPhoto GmbH initiated various arbitration proceed-ings before the ICC International Court of Arbitration in Paris, France. In arbitration proceeding ICC N\u00b0. 15362, the receiver claimed damages allegedly suffered as a result of, inter alia, the alleged undercapitalization of AgfaPhoto GmbH and the alleged causation of the insolvency of AgfaPhoto GmbH. The ICC Tribunal issued a final award on May 31, 2018, through which it dismissed all of the insolvency receiver\u2019s claims and ordered him to reimburse to Agfa a very substantial part of the costs that Agfa incurred in that arbitration proceeding. The insolvency receiver filed a request for the annulment of that final award before a German court (\u2018Oberlandesgericht Frankfurt/Main\u2019 or \u2018OLG\u2019) in October 2018. By judgment of January 16, 2020, the OLG declared the annulment of the final award of May 31, 2018. The concerned Agfa companies appealed this judgment before the \u2018Bundesgerichtshof\u2019 (BGH). The BGH confirmed the judgment of the OLG by decision of November 26, 2020, which was communicated to Agfa on January 20, 2021. The concerned Agfa companies decided not to appeal this decision before the German Federal Constitutional Court (\u2018Bundesverfassungsgericht\u2019). Consequently, the final award of May 31, 2018, has been set aside definitively. After an unsuccessful conciliation attempt the insolvency receiver of AgfaPhoto GmbH initiated a new arbitration proceed-ing before the ICC International Court of Arbitration in April 2021 (ICC N\u00b0. 26175), in which he pursues his claim for damages allegedly suffered as a result of the alleged undercapitalization of AgfaPhoto GmbH, in addition to the reimbursement of his costs borne in the first arbitration (ICC N\u00b0. 15362). An ICC Tribunal with three arbitrators was formed in the course of 2021. In the course of 2022, the insolvency receiver submitted his full Statement of Claim and Agfa submitted its Statement of Defense. In the course of 2023, the insolvency receiver submitted his full Reply Brief and Agfa submitted its Rejoinder Brief. A hearing took place from November 27, 2023 through December 1, 2023. Through May 2024, the parties submitted post-hearing briefs and cost submissions (two rounds each). On the basis of information received from the ICC so far, we expect the award to be issued in the second quarter of 2025. Agfa will vigorously defend itself in this arbitration procedure.
Other
Further legal risks for the Group exist with regard to a dispute with a former distributor (La Papelera) of the Group\u2019s products in Bolivia, who claims compensation for breach of contract. The original contract was signed in 1967, termi-nated in 2000 and a lawsuit was filed in 2001 in Bolivia (whereas parties contractually agreed that disputes should be brought before the courts of Belgium or Germany).
The final decision on the merits of this case was issued on April 4, 2018, which ordered Agfa to pay USD 735,000 plus additional amounts that needed to be ascertained in a subsequent proceeding of execution/liquidation. During the liquidation proceeding, an according to Agfa irregularly appointed expert (unilaterally proposed to the Bolivian first level court by La Papelera) issued a report (accepted by the Bolivian first level court) assessing these additional amounts considerably higher than the amount of 4.5 million USD originally claimed by La Papelera. Agfa appealed against the amount thus assessed on several occasions, and on December 15, 2020 the Constitutional Tribunal in Bolivia issued a decision which determined the annulment of the decisions that accepted the third party expert nom-ination and its report.
Despite the aforementioned decision of the Constitutional Court, lower courts in Bolivia continued thereafter to issue decisions that are incompatible with such decision. Agfa has filed in September 2023 another complaint directed to the Constitutional Tribunal in Bolivia with the aim to enforce the decisions that are being disregarded by the lower instances of the Bolivian court system. Until March 17, 2025, the Constitutional Tribunal in Bolivia has not ruled on Agfa\u2019s recourse in this respect.
In January 2023, Agfa-Gevaert Ltda. (Chile) and La Papelera signed a payment offer and acceptance, by which the uncontroversial amount of USD 735,000 was paid (in Chile), with accompanying declarations that no fines or penalties should be added to this amount. We therefore consider the risk that Agfa still would have to pay any fines or penalties on this amount as remote, given the express contractual agreement that no additional amounts are due under this item.
In February 2024, La Papelera filed an exequatur request before the Chilean Supreme Court with regard to a decision made by one of the lower Bolivian courts in contradiction of the December 15, 2020 decision of the Bolivian Consti-tutional Award. As the Supreme Court in Chile does not assess the merits of the case when deciding on an exequatur, this exequatur was granted on January 15, 2025. The enforcement procedure requires La Papelera to now initiate a request before the lower instances in Chile, where Agfa again will be able to defend its position. Until March 17, 2025, La Papelera has not initiated such request.
In May 2024, La Papelera moreover filed a unilateral petition for exequatur before the Court of First Instance in Antwerp, Belgium. This unilateral petition was granted on January 7, 2025 and was served on March 5, 2025 by La Papelera on Agfa-Gevaert NV. Agfa-Gevaert NV will file opposition and will defend its position in the subsequent procedure inter partes. \u00a0\u00a0\u00a0
Agfa will continue to vigorously defend itself in all these procedures, with a focus on avoiding final exequatur being granted in Belgium.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__97": { "value": "45. COMMITMENTS AND CONTINGENCIES
45.1 CONTINGENCIES
Contingencies resulted entirely from commitments given to third parties and comprise:
MILLION EURO | 2023 | 2024 |
Bank guarantees | 33 | 42 |
Other | - | - |
Corporate guarantees | 173 | 131 |
TOTAL | 206 | 173 |
Corporate guarantees mainly relate to guarantees given by the parent company on behalf of its subsidiaries towards banks and mainly relate to the revolving credit facility (see note 38.1) and other negotiated credit lines.
The purchase commitments in connection with major capital expenditure projects for which the respective contracts have already been awarded or orders placed amount to 20 million euro of which 12 million euro relates to the new ZIRFON plant.
45.2 LEGAL RISKS/CONTINGENCIES
The Group is currently not involved in any major litigation apart from those related to the AgfaPhoto insolvency.
AgfaPhoto
In connection with the divestment of the Consumer Imaging business of Agfa-Gevaert AG and certain of its subsid-iaries, the Group entered into various contractual relationships with AgfaPhoto Holding GmbH, AgfaPhoto GmbH and their subsidiaries in various countries (the \u2018AgfaPhoto group\u2019), providing for the transfer of its Consumer Imaging business, including assets, liabilities, contracts and employees, to AgfaPhoto group companies.
Subsequent to the divestment, insolvency proceedings have been opened with respect to AgfaPhoto GmbH and a number of its subsidiaries in both Germany and other countries. The Group had been sued through lawsuits or other actions in various countries in connection with a number of disputes. Those disputes have been resolved, with the exception of the following dispute.
With respect to that divestment, the insolvency receiver of AgfaPhoto GmbH initiated various arbitration proceed-ings before the ICC International Court of Arbitration in Paris, France. In arbitration proceeding ICC N\u00b0. 15362, the receiver claimed damages allegedly suffered as a result of, inter alia, the alleged undercapitalization of AgfaPhoto GmbH and the alleged causation of the insolvency of AgfaPhoto GmbH. The ICC Tribunal issued a final award on May 31, 2018, through which it dismissed all of the insolvency receiver\u2019s claims and ordered him to reimburse to Agfa a very substantial part of the costs that Agfa incurred in that arbitration proceeding. The insolvency receiver filed a request for the annulment of that final award before a German court (\u2018Oberlandesgericht Frankfurt/Main\u2019 or \u2018OLG\u2019) in October 2018. By judgment of January 16, 2020, the OLG declared the annulment of the final award of May 31, 2018. The concerned Agfa companies appealed this judgment before the \u2018Bundesgerichtshof\u2019 (BGH). The BGH confirmed the judgment of the OLG by decision of November 26, 2020, which was communicated to Agfa on January 20, 2021. The concerned Agfa companies decided not to appeal this decision before the German Federal Constitutional Court (\u2018Bundesverfassungsgericht\u2019). Consequently, the final award of May 31, 2018, has been set aside definitively. After an unsuccessful conciliation attempt the insolvency receiver of AgfaPhoto GmbH initiated a new arbitration proceed-ing before the ICC International Court of Arbitration in April 2021 (ICC N\u00b0. 26175), in which he pursues his claim for damages allegedly suffered as a result of the alleged undercapitalization of AgfaPhoto GmbH, in addition to the reimbursement of his costs borne in the first arbitration (ICC N\u00b0. 15362). An ICC Tribunal with three arbitrators was formed in the course of 2021. In the course of 2022, the insolvency receiver submitted his full Statement of Claim and Agfa submitted its Statement of Defense. In the course of 2023, the insolvency receiver submitted his full Reply Brief and Agfa submitted its Rejoinder Brief. A hearing took place from November 27, 2023 through December 1, 2023. Through May 2024, the parties submitted post-hearing briefs and cost submissions (two rounds each). On the basis of information received from the ICC so far, we expect the award to be issued in the second quarter of 2025. Agfa will vigorously defend itself in this arbitration procedure.
Other
Further legal risks for the Group exist with regard to a dispute with a former distributor (La Papelera) of the Group\u2019s products in Bolivia, who claims compensation for breach of contract. The original contract was signed in 1967, termi-nated in 2000 and a lawsuit was filed in 2001 in Bolivia (whereas parties contractually agreed that disputes should be brought before the courts of Belgium or Germany).
The final decision on the merits of this case was issued on April 4, 2018, which ordered Agfa to pay USD 735,000 plus additional amounts that needed to be ascertained in a subsequent proceeding of execution/liquidation. During the liquidation proceeding, an according to Agfa irregularly appointed expert (unilaterally proposed to the Bolivian first level court by La Papelera) issued a report (accepted by the Bolivian first level court) assessing these additional amounts considerably higher than the amount of 4.5 million USD originally claimed by La Papelera. Agfa appealed against the amount thus assessed on several occasions, and on December 15, 2020 the Constitutional Tribunal in Bolivia issued a decision which determined the annulment of the decisions that accepted the third party expert nom-ination and its report.
Despite the aforementioned decision of the Constitutional Court, lower courts in Bolivia continued thereafter to issue decisions that are incompatible with such decision. Agfa has filed in September 2023 another complaint directed to the Constitutional Tribunal in Bolivia with the aim to enforce the decisions that are being disregarded by the lower instances of the Bolivian court system. Until March 17, 2025, the Constitutional Tribunal in Bolivia has not ruled on Agfa\u2019s recourse in this respect.
In January 2023, Agfa-Gevaert Ltda. (Chile) and La Papelera signed a payment offer and acceptance, by which the uncontroversial amount of USD 735,000 was paid (in Chile), with accompanying declarations that no fines or penalties should be added to this amount. We therefore consider the risk that Agfa still would have to pay any fines or penalties on this amount as remote, given the express contractual agreement that no additional amounts are due under this item.
In February 2024, La Papelera filed an exequatur request before the Chilean Supreme Court with regard to a decision made by one of the lower Bolivian courts in contradiction of the December 15, 2020 decision of the Bolivian Consti-tutional Award. As the Supreme Court in Chile does not assess the merits of the case when deciding on an exequatur, this exequatur was granted on January 15, 2025. The enforcement procedure requires La Papelera to now initiate a request before the lower instances in Chile, where Agfa again will be able to defend its position. Until March 17, 2025, La Papelera has not initiated such request.
In May 2024, La Papelera moreover filed a unilateral petition for exequatur before the Court of First Instance in Antwerp, Belgium. This unilateral petition was granted on January 7, 2025 and was served on March 5, 2025 by La Papelera on Agfa-Gevaert NV. Agfa-Gevaert NV will file opposition and will defend its position in the subsequent procedure inter partes. \u00a0\u00a0\u00a0
Agfa will continue to vigorously defend itself in all these procedures, with a focus on avoiding final exequatur being granted in Belgium.
", "dimensions": { "concept": "ifrs-full:DisclosureOfContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__98": { "value": "46. RELATED PARTY TRANSACTIONS
46.1 TRANSACTIONS WITH DIRECTORS AND MEMBERS OF THE EXECUTIVE MANAGEMENT
(KEY MANAGEMENT PERSONNEL)
Key management personnel compensation (excluding employer\u2019s social contribution) included in profit or loss can be detailed as follows:
MILLION EURO | 2023 | 2024 | ||
Directors | Executive Management | Directors | Executive Management | |
Short-term employee benefits | 0.5 | 3.0 | 0.5 | 3.0 |
Termination benefits | - | - | - | - |
Post-employment benefits | - | 0.2 | - | 0.2 |
Share-based payment | - | (0.3) | - | (0.3) |
TOTAL | 0.5 | 2.9 | 0.5 | 2.9 |
As of December 31, 2024, there were no loans outstanding neither to members of the Executive Management nor to members of the Board of Directors.
Pension provisions for members and retired members of the Executive Management, amounting to 11 million euro, are reflected in the statement of financial position of the Group at December 31, 2024. Key management personnel remuneration is also included in the Remuneration Report see page 81.
46.2 OTHER RELATED PARTY TRANSACTIONS
There are no other material related party transactions.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRelatedPartyExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__99": { "value": "47. EVENTS SUBSEQUENT TO DECEMBER 31, 2024
After December 31, 2024, the following significant events occurred:
April 1, 2025, Agfa announced that by April 4, 2025, it would receive a partial payment (in the amount of 5.9 million euro) from Aurelius Group in relation to the sale of Agfa\u2019s Offset Solutions division that was announced in August 2022. The remaining part of the undisputed amounts (totaling 6.4 million euro), as well as the disputed part of the outstanding receivable \u2013 for the amount so determined by the independent expert \u2013 become due as soon as the independent expert has rendered her decision.
April 2, 2025, Agfa announced its decision to shut down its film finishing site in Bushy Park (South Carolina \u2013 USA) and to consolidate its finishing activities mainly at its site in Mortsel (Belgium). The decision is another step in Agfa\u2019s global plan to optimize the cost base of its traditional film activities, aligning them with market realities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__100": { "value": "48. INFORMATION ON THE AUDITOR\u2019S ASSIGNMENTS AND RELATED FEES
The following fees for the services of KPMG Bedrijfsrevisoren/R\u00e9viseurs d\u2019Entreprises in 2023 and services of PWC Bedrijfsrevisoren in 2024 were recognized as an expense:
EURO | 2023 | 2024 |
Fees of the independent auditor with respect to the statutory audit mandate for the Company and the Group (Belgium) | 982,475 | 804,145 |
Fees for non-audit services rendered by the independent auditor to the Company and the Group | ||
Other assurance | 695,873 | 362,075 |
Tax | - | - |
Other non-audit | 11,300 | 14,650 |
SUBTOTAL | 1,689,648 | 1,180,870 |
Fees of independent auditor\u2019s network with respect to a statutory audit mandate at the level of the Group (foreign operations) | 395,356 | 198,608 |
Fees for non-audit services rendered by the independent auditor\u2019s network to the Group (Belgian and foreign operations) | ||
Other assurance | - | - |
Tax | 78,001 | - |
Other non-audit | 23,204 | 483,093 |
SUBTOTAL | 496,562 | 681,701 |
TOTAL | 2,186,210 | 1,862,571 |
The fees for the auditing of financial statements comprise those for the audits of the consolidated financial state-ments of the Agfa-Gevaert Group and the financial statements of its subsidiaries in Belgium and abroad. Other non-audit fees mainly relate to advice and due diligence assistance.
ACCOUNTING POLICIES
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuditorsRemunerationExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__101": { "value": "50. MATERIAL ACCOUNTING POLICIES
50.1 BASIS OF CONSOLIDATION
50.1.1 Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group (see note 50.1.4).
Control is the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Goodwill is not amortized but tested for impairment on an annual basis and whenever there is an indication that the cash-generating unit to which goodwill has been allocated may be impaired. The impairment testing process is described in the appropriate section of these policies. Goodwill is stated at cost less accumulated impairment losses. With respect to associates, the carrying amount of goodwill is included in the carrying amount of the investment.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognized amount of any non-controlling interests in the acquiree; and if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net fair value of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss. Any contingent consideration payable is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration recognized as a liability are recognized in profit or loss.
Costs related to the acquisition are expensed as incurred.
50.1.2. Discontinued operations
A discontinued operation is a component of the Group\u2019s business, the operations and cash flows which can be clearly distinguished from the rest of the Group and which:
represents a separate major line of business or geographic area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when an operation meets the criteria to be reclassified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation has been discontinued from the start of the comparative year.
50.1.3 Measurement of non-controlling interests
Non-controlling interests are measured at their proportionate share of the acquirees identifiable net assets at the date of acquisition.
50.1.4 Subsidiaries
A subsidiary is an entity controlled by the Company. Control exists when the Company has the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of a subsidiary are included in the consolidated financial statements from the acquisition date until the date when the parent ceases to control the subsidiary.
50.1.5 Loss of control
On the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling inter-ests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted inves-tee or as a financial asset depending on the level of influence retained.
50.1.6 Investments in associates
An associate is an entity in which the Company has significant influence and that is neither a subsidiary nor an inter-est in a joint venture. Significant influence is presumed to exist when the Company holds between 20% and 50% of the voting power of another entity. An investment in an associate is accounted for using the equity method from the date on which it becomes an associate and is recognized initially at cost. The cost of the investment includes transaction costs. On acquisition of the investment, any difference between the cost of the investment and the Company\u2019s share of the net fair value of the associate\u2019s identifiable assets and liabilities is accounted for as follows:
goodwill relating to an associate is included in the carrying amount of the investment;
any excess of the Company\u2019s share of the net fair value of the associate\u2019s identifiable assets and liabilities over the cost of the investment is included as income in the determination of the Company\u2019s share of the associate\u2019s profit or loss in the period in which the investment is acquired.
Elimination of unrealized profits and losses on transactions with associates
Profits and losses resulting from upstream and downstream transactions between the Company \u2013 included its consol-idated subsidiaries \u2013 and an associate must be eliminated to the extent of the Company\u2019s interest in the associate.
Upstream transactions are, for example, sales of assets from an associate to the Company. Downstream transactions are, for example, sales of assets from the Company to an associate.
When an investment ceases to be an associate
From the date when the Company ceases to have significant influence over an associate, it accounts for related invest-ment in accordance with IFRS 9 from that date. On the loss of significant influence, the Company measures at fair value any investment the Company retains in the former associate.
The Company recognizes in profit or loss any difference between:
the fair value of any retained investment and any proceeds from disposing of the (partial) interest in the associate; and
the carrying amount of the investment at the date when significant influence is lost.
Amounts recognized in OCI in relation to the associate or joint venture are accounted for on the same basis as would be required if the investee had disposed of the related assets and liabilities directly.
50.1.7 Transactions eliminated on consolidation
Intragroup balances and transactions, including income, expenses and dividends, are eliminated in full. Unrealized profits and losses resulting from intragroup transactions that are recognized in assets, such as inventory and fixed assets, are eliminated in full.
Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group\u2019s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
50.2 FOREIGN CURRENCY
Items included in the financial statements of each of the Company\u2019s entities are measured using the currency of the primary economic environment in which the entity operates (\u2018the functional currency\u2019). The consolidated financial statements are presented in euro, which is the Company\u2019s functional and presentation currency.
50.2.1 Foreign currency transactions
All transactions in currencies other than the functional currency are foreign currency transactions. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the trans-actions. Foreign currency gains and losses resulting from the settlement of such transactions and from the translation at closing rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss. However, foreign currency differences arising from the translation of the following items are recognized in OCI:
an investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognized in OCI are reclassified to profit or loss);
qualifying cash flow hedges to the extent that the hedges are effective.
Non-monetary assets and liabilities measured at historical cost that are denominated in foreign currencies are trans-lated using the exchange rate at the date of the transaction.
50.2.2 Foreign operations
A foreign operation is an entity that is a subsidiary, associate, joint venture or branch of the Company, of which the activities are based or conducted in a currency other than the euro.
The financial statements of foreign operations are translated for the purpose of the consolidation as follows:
assets and liabilities are translated at the closing rate;
income and expenses are translated at average year-to-date exchange rates; and
equity components are translated at historical rates, excluding current year movements, which are translated at rates approximating the rate at the time of the transaction.
All resulting exchange differences are recognized in other comprehensive income and accumulated in a separate component of equity being translation reserve. The amount attributable to any non-controlling interests is allocated to and recognized as part of non-controlling interests.
On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.
On the partial disposal of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to non-controlling interests in that foreign operation. Any other partial disposal of a foreign operation \u2013 related to an associate, joint venture or branch of the Company \u2013 results in a reclassification to profit or loss of the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income.
A partial disposal of an entity\u2019s interest in a foreign operation is any reduction in an entity\u2019s ownership interest in a foreign operation, except for those reductions resulting in:
the loss of control of a subsidiary;
the loss of significant influence over an associate;
the loss of joint control over a joint arrangement.
These reductions are accounted for as disposals resulting in a reclassification from other comprehensive income to profit or loss of the cumulative amount of the exchange differences relating to that foreign operation.
50.3 REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from contracts with customers is recognized according to the criteria set in IFRS 15 Revenue from contracts with customers. In recognizing revenue from contracts with customers a five-step approach is to be applied: first the contract with the customer should be identified; then the distinct performance obligations in the contract should be identified; as a third step the transaction price should be determined; then the transaction price should be allocated to the distinct performance obligations in the contract; and finally revenue is recognized when the distinct perfor-mance obligation is satisfied. The standard moreover specifies whether revenue should be recognized at a certain point in time or over a period of time.
Revenue is recorded net of sales taxes, customer discounts and rebates.
The Group\u2019s policy distinguishes revenue from the sale of goods, the rendering of services and multiple-element arrangements.
Revenue from the sale of goods comprises revenue from the sale of consumables, chemicals, spare parts, standalone equipment and software licenses. Revenue from the rendering of services includes installation services, maintenance and post-contract support services. The Group also enters into arrangements combining multiple deliverables such as software, hardware/equipment and services, including training, maintenance and post-contract customer support, the \u2018multiple-element arrangements.\u2019 Freight charged to customers is recognized as revenue as incurred.
A. Sale of goods
Revenue from the sale of goods is recognized when the customer obtains control of the goods and when it is probable that the agreed transaction price will be collected. In evaluating whether collectability is probable, the entity consid-ers the customer\u2019s ability and intention to pay that amount when it is due. Revenue from the sale of goods is, under IFRS 15, recognized upon delivery following applicable freight terms, at a point in time.
Revenue from the sale of stand-alone software licenses is recognized at a point in time, at the delivery of the source key. The license is recognized at a point in time as the Group provides the customer access to and a right to use the intellectual property as it exists at a point in time.
In case volume discounts incentives are offered to the customer, the expected volume rebates are estimated based on historical experience. The amount of the variable consideration is made based on the most likely amount-method. The variable consideration is recognized only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue will not occur.
B. Rendering of services
Under the IFRS 15 standard, revenue from maintenance contracts is recognized straight-line over the maintenance period as the customer simultaneously receives and consumes the benefits from the maintenance over time.
Revenue from installation and implementation services are recognized as rendered. The progress is measured based on input methods being the labor hours expended to date versus the estimated hours spend.
When in a service contract multiple services are offered, the total consideration is allocated to all services based on their stand-alone selling price.
C. Multiple-element arrangements
Multiple-element arrangements offer the customer a combination of several deliverables such as software, licenses, hardware, implementation services and maintenance and post-contract support services. For arrangements not requiring substantive customization of the software, each of aforementioned deliverables is assumed to qualify as a separate performance obligation.
The total arrangement fee is allocated to the distinct performance obligations based on the stand-alone selling prices of the performance obligations. In case discounts are offered, a proportionate amount is allocated proportionally to each performance obligation based on their stand-alone selling price.
Within the HealthCare IT and Radiology Solutions business segments, most arrangements do not require significant customization or modification.
Revenue allocated to the hardware portion of the arrangement is recognized on delivery when it creates value to the customer on a stand-alone basis. Hardware is considered as a distinct performance obligation as there is no trans-formative relationship between the hardware and other components of the contract.
Revenue allocated to the software component is recognized after successful installation and acceptation at the client\u2019s premises. The software license is a distinct performance obligation as the customer can benefit from the license with readily available resources. The license is recognized at a point in time as the Group provides the customer access to and a right to use the intellectual property as it exists at a point in time.
Revenue from installation and implementation services are recognized as rendered. The progress is measured based on input methods being the labor hours expensed to date versus the estimated hours spend.
Extended warranty whereby the customer purchases additional warranty separately, i.e. warranty that is adding additional services on top of the legal warranty or for a longer period than legal warranty, is considered as a distinct performance obligation within multiple-element arrangements.
Revenue recognized for which no billing has yet occurred is recognized in the statement of financial position as contract assets and advance payments received for which no revenue has been recognized is presented as contract liabilities.
Within the HealthCare IT segment, the Group also offers \u2018Software as a Service\u2019 arrangements, whereby products and services including own IP and other services are offered through cloud computing under a subscription model on a pay-per-use model. Agfa offers a right to access the software as it exists throughout the license period. The cloud component is a service towards the customer who can access the software on an as-needed basis over the internet or a dedicated line. Revenue is recognized over time based on a pay-per-use schedule.
Within the Digital Print and Chemicals divisions, revenue from sale of equipment that require substantive installation activities is recognized when the installation of the equipment is finalized in accordance with the contractually agreed specifications. Installation services and equipment are considered highly interrelated and are identified as one performance obligation that is recognized at a point in time, i.e. at installation at the client\u2019s premises. Revenue from the sale of smaller equipment not requiring substantive installation activities is recognized when the customer obtains control of the goods.
50.4 EMPLOYEE BENEFITS
For the accounting treatment of post-employment plans, IFRS distinguishes defined contribution plans and defined benefit plans. The classification depends on which party \u2013 Company or employee \u2013 bears the actuarial and invest-ment risk. In case of a defined contribution plan, the employee bears all the risks and therefore the Company does not recognize a liability in its statement of financial position except for any unpaid contribution. In case of a defined benefit plan, the Company bears the actuarial and investment risk and should consequently recognize a liability in its statement of financial position.
50.4.1 Defined contribution plans
Contributions to defined contribution pension plans are recognized as an expense in profit or loss as incurred.
They are allocated among functional costs: cost of sales, research and development expenses, selling and administra-tive expenses, following the functional area of the corresponding profit and cost centers to which related employees are attributed.
50.4.2 Defined benefit plans
As from December 31, 2016, the accounting treatment for Belgian defined contribution plans with return guaranteed by law has been aligned with the accounting treatment of defined benefit plans.
A. Liabilities for post-employment benefits
For defined benefit plans, the amount recognized in the statement of financial position is determined as the present value of the defined benefit obligation less the fair value of any plan assets. Where the calculation results in a net surplus, the recognized asset does not exceed the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.
The present value of the defined benefit obligations (DBO) and the service costs are calculated by a qualified actuary using the Projected Unit Credit (PUC) method. Under this method projected benefits that are payable each future year are discounted to the reporting date at the assumed interest rate. The resulting total benefit obligation is then allocated to past service, presenting the DBO and year-in-service, presenting the service cost. The assumed interest rate is the discount rate based on yields at reporting date on high-quality corporate bonds that have maturity dates approximating the terms of the Group\u2019s obligations. In determining the net present value of the future benefit entitle-ment for service already rendered (DBO), the Group considers future compensation and benefit increases.
The DBO also comprises the present value from the effects of taxes payable by the plan on contributions or benefits relating to services already rendered.
More information about the application of the PUC method for Belgian defined contribution plans can be found hereafter.
B. Defined benefit cost recognized in profit or loss and other comprehensive income
The amount charged to profit or loss consists of current service cost, past service cost, gain or loss on settlement, net interest cost and administrative expenses and taxes. Current service costs as well as administrative expenses and taxes, which are borne by the employer(s) participating to the plan, are allocated among functional costs: cost of sales, research and development expenses, selling and general administrative expenses, following the functional area of the corresponding profit and cost centers to which related employees are attributed. Past service cost and settle-ment gains (losses) are recognized immediately in profit or loss under Other operating income or Other operating expense when the plan amendment, curtailment or settlement occurs. Administrative expenses which are related to the management of plan assets and taxes directly linked to the return on plan assets \u2013 borne by the plan itself \u2013 are included in the return on plan assets and are recognized in Other comprehensive income, net of income taxes (OCI).
Net interest cost is recognized in profit or loss under other finance expense. It is calculated by applying the discount rate used to measure the defined benefit obligation to the net defined benefit liability. The net interest cost is broken down into interest income on plan assets and interest cost on the defined benefit obligation. The difference between the return on plan assets and the interest income on plan assets is included in line item 'Net amount of remeasure-ments of the net defined benefit liability recorded in equity' and recognized in Other comprehensive income, net of income taxes. Next to the difference between the actual return and the interest income on plan assets, the line item \u2018Net amount of remeasurements of the net defined benefit liability recorded in equity\u2019 also comprises actuarial gains and losses resulting for example from an adjustment of the discount rate.
C. Defined contribution plans with return guaranteed by law
Belgian defined contribution plans are subject to the Occupational Pensions Act of April 2003. According to article 24 of this Act, affiliated persons are entitled to a guaranteed minimum return on contributions made by either the organizer of the plan or the employee. Some conditions in this law, such as the required level of minimum return, have been amended by the Act of December 18, 2015. Similar to the measurement of all other defined benefit plans, the net pension liability related to defined contribution plans with return guaranteed by law is calculated as the dif-ference between the present value of the defined benefit obligation (DBO) and the fair value of the plan assets. As of December 31, 2016, the present value of the defined benefit obligation (DBO) and the service costs are calculated by a qualified actuary using the Projected Unit Credit (PUC) method. More information on the general principles of this method can be found under liabilities for post-employment benefits.
Within the Belgian Agfa-Gevaert Group entities, all insured plans guarantee a fixed return up to the retirement age (so-called Branch 21 insured products). Depending on the nature of the insured contract, the DBO has been deter-mined with or without future contributions and their related minimum returns up to the retirement age or exit. For the Top Performance Plan no future contributions were considered, for all other \u2018Branch 21\u2019 insured products recur-ring contributions are paid and therefore considered in the actuarial calculation.
Similar to the Belgian DC-plans, the Group\u2019s Swiss DC-plans are accounted for as DB-plans under IAS 19.
In measuring the plan assets of the Swiss DC-plans, we apply paragraph 115 of IAS19. Paragraph 115 of IAS19 applies to the valuation of the pension plan assets where the liabilities are backed by insurance contracts that match the amount and timing of some or all the benefits payable under the plan. In such situations the value of the insurance contracts is set equal to the present value of the related liabilities (valued on the IAS19 assumptions, and in particular the IAS19 discount rate is used in calculating the present value of the future benefit payments).
For Belgian plans, the plan assets of the Fabriekspensioen are valued at the fair value of the pension fund's assets as of the calculation date. For all other plans, the valuation of plan assets follows the so-called \"\u00a7113\" methodology, in accordance with paragraph 113 of the IAS19 standard. This approach determines the fair value of plan assets as the present value of insured benefits provided by insurers. These insured benefits are based on the interest guarantees offered by insurers on past contributions, valid until the contract's maturity. The present value calcu-lation employs a discount rate derived from single A-rated financial bonds, reflecting the associated risk with the insurers. As of year-end 2024, this rate is established at 3.75%, which is 0.40% above the rate used for calculating the Defined Benefit Obligation.
50.4.3 Termination benefits
Termination benefits are recognized as a liability and an expense when a Group company is demonstrably committed to either:
terminate the employment of an employee or group of employees before the normal retirement date; or
provide termination benefits as a result of an offer made in order to encourage voluntary redundancy and to the extent it is probable that the employees will accept the offer.
Where termination benefits fall due more than twelve months after the reporting date, they are discounted using a discount rate which is the yield at reporting date on high quality corporate bonds that have maturity dates approxi-mating the terms of the Group\u2019s obligations.
The interest impact of unwinding and re-measuring long-term termination benefits at adjusted discount rates at financial reporting date is reflected in profit or loss under \u2018Other finance expense\u2019 whereas the impact of increases and decreases of the Group\u2019s commitments are presented under \u2018Other operating expenses \u2013 Restructuring expenses\u2019.
50.4.4 Other long-term employee benefits
The Group\u2019s net obligation in respect of long-term employee benefits, other than pension plans, post-employment life insurance and medical care, is the amount of future benefit that employees have earned in return for their service in current and prior periods. The obligation is calculated using the Projected Unit Credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate used is the yield at reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Group\u2019s obligations.
Unlike the accounting treatment of post-employment defined benefit plans, remeasurements of other long-term employee benefits are not reflected in other comprehensive income. Instead, the impact of remeasurements is recog-nized in profit or loss.
50.4.5 Current employee benefits
Current employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid within twelve months if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.
50.4.6 Share-based payment transactions
The Group has granted a long-term variable compensation embedded in a cash-settled share-based payment plan to its CEO and key personnel members of the Group. This plan can result in an additional cash bonus.
Related share appreciation rights do not vest until the eligible persons have completed a specified period of service. Therefore, the Company recognizes the services received, and a liability to pay for them, as the eligible person renders service during that period. The liability is measured, initially and at the end of each reporting period until
settled, at the fair value of the share appreciation rights, by applying an option pricing model, and the extent to which the employees have rendered service to date. Changes in fair value are recognized in profit or loss. Both the cost recognized at initial measurement as well as the impact of changes in fair value are considered as employee benefit expenses. Black-Scholes is the applied option pricing model.
50.5 RESEARCH AND DEVELOPMENT EXPENSES
For accounting purposes, research expenses are defined as costs incurred for current or planned investigations undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Development expenses are defined as costs incurred for the application of research findings or specialist knowledge to plans or designs for the production, provision or development of new or substantially improved products, services or pro-cesses, respectively, prior to the commencement of commercial production or use.
Research and development expenses are incurred in the Agfa-Gevaert Group for in-house research and development activities as well as numerous research and development collaborations and alliances with third parties.
Research and development expenses include, in particular, the running costs of the research and development departments such as personnel expenses, material costs and depreciation of fixed assets as well as the costs of laboratories, costs of applications development facilities, engineering departments and other departments carrying out research and development tasks, costs of contacts with universities and scientific institutes including expenses incurred for commissioned research and development work.
Research costs cannot be capitalized. The conditions for capitalization of development costs are strictly defined: an intangible asset must be recognized if, and only if, there is reasonable certainty on the technical feasibility of com-pleting the asset so that it will be available for use or sale, on the entity\u2019s intention to complete the intangible asset, on the ability to use or sell the asset, on how the entity will generate probable future economic benefits, on the availabil-ity of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, on the ability to measure reliably the expenditure of the intangible asset during its development.
50.6 NET FINANCE COSTS
Interest income (expense) \u2013 net comprises interests receivable/payable in relation to items of the net financial debt position.
Net financial debt is defined as current and non-current loans and borrowings and lease liabilities less cash and cash equivalents.
Other finance income (expense) \u2013 net comprises:
interest received/paid on other assets and liabilities not part of the net financial debt position such as the net inter-est cost of defined benefit plans and the interest component of long-term termination benefits;
exchange results on non-operating activities;
changes in the fair value of derivative instruments economically hedging non-operating activities;
the ineffective portion of cash flow hedges hedging non-operating activities;
impairment losses recognized on financial assets;
results on the sale of marketable securities;
change in contingent consideration from a business combination; and
other finance income (expense).
Interest income is recognized in profit or loss as it accrues, taking into account the effective yield on the asset. Divi-dend income is recognized in profit or loss on the date that the dividend is declared.
All interest and other costs incurred in connection with borrowings are expensed as incurred using the effective inter-est rate. The interest expense component of lease payments is recognized in profit or loss using the effective interest rate method.
The net interest cost of defined benefit plans is determined by multiplying the net defined benefit liability by the discount rate that is used to measure the defined benefit obligation, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability during the period as a result of contributions and benefit payments.
The interest component of long-term termination benefits comprises the impact of unwinding the liability as well as the impact of the changed discount rate.
50.7 INCOME TAX AND OTHER TAX
Income tax on the profit (loss) for the year comprises taxes paid or accrued and deferred tax expense (income). Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in other com-prehensive income, in which case it is recognized in other comprehensive income or if part of a business combination in which case it is recognized against goodwill.
In determining the amount of taxes paid or accrued and deferred tax expense (income), the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due.
Other tax receivables and liabilities relate to other tax, such as VAT, property tax and other indirect taxes. They are carried at cost. Both current and other tax receivables are offset against current tax liabilities, respectively other tax liabilities when they relate to taxes levied by the same taxation authority and are intended to be settled on a net basis and there is a legal right to offset.
50.7.1 Income taxes paid or accrued
Taxes paid or accrued are the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend.
Current income tax for current and prior periods are, to the extent unpaid, recognized as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recog-nized as an asset.
50.7.2 Deferred tax
Deferred tax is calculated using the balance sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not provided for:
taxable temporary differences on the initial recognition of goodwill;
the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss); and
differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the reporting date. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and credits can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and deferred tax liabilities are offset in the statement of financial position if the entity has a legal right to settle current tax amounts on a net basis and the deferred tax amounts are levied by the same taxing author-ity on the same entity that intend to realize the asset and settle the liability at the same time.
50.8 GOODWILL
Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carry-ing amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity-accounted investee as a whole.
50.9 INTANGIBLE ASSETS WITH FINITE USEFUL LIVES
50.9.1 Recognition and measurement
Intangible assets with finite useful lives are stated at cost less accumulated amortization and impairment losses.
Research and development costs are expensed as they are incurred, except for certain development costs, which are capitalized when it is probable that a development project will be a success, and certain criteria, including technolog-ical and commercial feasibility, have been met. Capitalized development costs are amortized on a systematic basis over their expected useful lives.
In accordance with IFRS 3 Business combinations, if an intangible asset is acquired in a business combination, the cost of that intangible asset is its fair value at the acquisition date. The fair value of an intangible asset reflects market expectations about the probability that the future economic benefits embodied in the asset will flow to the entity.
50.9.2 Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.
50.9.3 Amortization
Intangible assets with finite useful lives, such as acquired technology and customer relationships are amortized on a straight-line basis over their estimated useful lives, generally for periods ranging from five to 15 years. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
50.10 PROPERTY, PLANT AND EQUIPMENT
50.10.1 Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
The cost of an item of property, plant and equipment comprises:
its purchase price, including import duties and non-refundable purchase taxes;
any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management;
the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which the Company incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period;
capitalized borrowing costs.
For self-constructed assets, directly attributable costs are direct cost of materials, direct manufacturing expenses, appropriate allocations of material and manufacturing overheads, and an appropriate share of the depreciation of assets used in construction. It includes the share of expenses for company pension plans and discretionary employee benefits that are attributable to construction and capitalized borrowing costs.
50.10.2\tSubsequent expenditure
Expenses for the repair and maintenance of property, plant and equipment are usually expensed as incurred. They are, however, capitalized when they increase the future economic benefits embodied in the item of property, plant and equipment.
50.10.3\tDepreciation
Property, plant and equipment is depreciated on a straight-line basis over the estimated useful life of the item. For leased assets, the depreciation period is the estimated useful life of the asset, or the lease term if shorter.
The estimated useful lives of the respective asset categories are as follows:
Buildings | 20 to 50 years |
Outdoor infrastructure | 10 to 20 years |
Plant installations | 6 to 20 years |
Machinery and equipment | 6 to 12 years |
Laboratory and research facilities | 3 to 5 years |
Vehicles | 4 to 8 years |
Computer equipment | 3 to 5 years |
Furniture and fixtures | 4 to 10 years |
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
50.11 NON-CURRENT ASSETS HELD FOR SALE
The Group classifies an asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets (or disposal groups) and its sale must be highly probable.
Immediately before classification as held for sale, the Group measures the carrying amount of the asset (or all the assets and liabilities in the disposal group) in accordance with applicable IFRS. Then, on initial classification as held for sale, assets and disposal groups are recognized at the lower of their carrying amounts and fair value less costs to sell. Impairment losses are recognized for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. Assets classified as held for sale are no longer amortized or depreciated.
50.12 FINANCIAL INSTRUMENTS
50.12.1 Financial assets
Financial assets comprise equity and debt instruments in another entity, cash and cash equivalents, loans receivable,
trade receivables, receivables under finance leases and other receivables as well as derivative financial instruments.
The Group initially recognizes loans and receivables on the date that they are originated. All other non-derivative financial assets are recognized on the trade date when the Group becomes a party to the contractual provisions of the instrument.
A trade receivable without significant financing is initially measured at its fair value plus any transaction costs that are directly attributable to the acquisition of the financial assets. Transaction costs related to financial assets and liability carried at fair value through profit and loss are recognized in the income statement.
The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the rights to receive the contractual cash flows on a financial asset in a transaction in which substan-tially all the risks and rewards of ownership of the financial asset are transferred. In a transaction where an entity neither transfers nor retains substantially all of the risks and rewards of ownership of a financial asset, the related asset is derecognized in case the entity lost control of the asset. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The Group has the following categories of non-derivative financial assets: financial assets at amortized cost and financial assets at fair value through other comprehensive income. Its classification reflects the business model in which the assets are managed and their cash flow characteristics.
A. Financial assets at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All the Group\u2019s receivables \u2013 trade receivables, receivables under finance leases as well as other receivables \u2013 and cash and cash equivalents fit into aforementioned definition and are consequently measured at amortized cost.
B. Financial assets at fair value through other comprehensive income (FVOCI)
A debt instrument is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contrac-tual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
The Group has made an irrevocable election for the investment in Digital Illustrate Inc. to classify it as FVOCI. The impact of subsequent measurement of this investment in equity securities is reflected in OCI under other reserves. This item in OCI will not be reclassified subsequently to profit or loss. The Group does not hold any other assets in this category.
50.12.2\tFinancial liabilities
Financial liabilities comprise uncommitted bank facilities, revolving and other credit facilities, trade and other paya-bles as well as derivative financial instruments.
Financial liabilities are recognized initially at fair value on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
At initial recognition, the Group measures its financial liabilities at its fair value less any transaction costs that are directly attributable to the issuance of the financial liability.
Non-derivative financial liabilities are subsequently measured at amortized cost except for financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies.
Interest-bearing loans and borrowings are stated at amortized cost with any difference between the initial amount and the maturity amount being recognized in profit or loss over the expected life of the instrument on an effective interest rate basis.
If a transfer of a financial asset does not result in derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received. In subsequent periods, the Group recog-nized any income on the transferred asset and any expense incurred on the financial liability.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, and retains control of the transferred asset, the entity continues to recognize the transferred asset to the extent of its continuing involvement and recognizes an associated liability. The extent of the Group\u2019s continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset.
The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the entity has retained. The associated liability is measured in such a way that the net carrying amount of the transferred asset and the associated liability is the amortized cost of the rights and obligations retained by the Group assuming the transferred asset is measured at amortized cost.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired. The Group also derecognizes a financial liability when the terms are modified and the cash flows of the modified lia-bility are substantially different, in which case a new financial liability based on modified terms is recognized at fair value. On derecognition of the financial liability, the difference between the carrying amount extinguished and the consideration paid is recognized in profit or loss.
50.12.3\tDerivative financial instruments and hedge accounting
The Group uses derivative financial instruments primarily to manage its exposure to foreign currency risks arising from operational, financing and investment activities.
The Group uses following types of derivative financial instruments: forward exchange contracts used for hedging, swap contracts used for hedging and other forward exchange contracts and swap contracts.
The Group uses forward exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to future sales and purchases.
Derivative financial instruments that are not designated as cash flow hedges are measured at fair value through profit or loss.
Derivative financial instruments are initially recognized at fair value on the date at which a derivative contract is entered into (trade date) and are subsequently re-measured at their fair value. In case cash flow hedge or net invest-ment hedge accounting is applied, the effective portion of any gain or loss is recognized in OCI, the non-effective portion in profit or loss. Transaction costs related to financial assets and liability carried at fair value through profit and loss are recognized in the income statement.
The Group has the following categories of derivative financial instruments: derivatives not formally designated as hedging instruments and cash flow hedging instruments.
A. Hedging instruments
The Group\u2019s forward exchange contracts and swap contracts, that are formally designated as cash flow hedging instruments, are subsequently re-measured at their fair value.
Cash flow hedge accounting is applied to all hedges that qualify for hedge accounting when required documentation of the hedging relationship is in place and when the hedge is determined to be effective. When hedge accounting is applied, the effective portion of any gain or loss is recognized in OCI, the non-effective portion in profit or loss.
With regard to hedge accounting, the Group applies the requirements of IFRS 9. This standard requires the Group to ensure that hedge accounting relationships are aligned with the Group\u2019s risk management objectives and strategy and to apply a more qualitative and forward looking approach to assessing hedge effectiveness. The Group uses forward exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to future sales. The Group currently designates only the change of the spot element of the forward exchange contract as the hedging instrument in cash flow hedging relationships. Under IFRS 9, the change in the fair value of the forward element (\u2018forward points\u2019) is accounted for as fair value through profit or loss and reflected in net finance costs.
The types of hedge accounting transactions that the Group currently designates meet the requirements of IFRS 9 and are aligned with the Group\u2019s risk management strategy and objectives.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is termi-nated or exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in hedge reserve remains in other comprehensive income until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-finan-cial item\u2019s initial cost or for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedge reserve are immediately reclassified to profit or loss.
B. Mandatory at FVTPL
Derivative financial instruments that are economic hedges but that do not meet the hedge accounting criteria of IFRS 9 are categorized as Mandatory at FVTPL and are accounted for as financial assets or liabilities at fair value through profit or loss. The impact in profit or loss is reflected in either other operating income and expense or net finance costs depending on the nature of the item economically hedged.
50.13 IMPAIRMENT
50.13.1 Impairment testing of goodwill, intangible assets and property, plant and equipment
Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually and upon the occurrence of an indication of impairment.
The impairment tests are performed annually at the same time each year and at the cash-generating unit level.
The Group defines its cash-generating units based on the way that it monitors its goodwill and will derive economic benefit from the acquired goodwill and intangibles.
The impairment tests are performed by comparing the carrying value of the assets of these cash-generating units with their recoverable amount, based on their future projected cash flows discounted at an appropriate pre-tax rate of return.
The discount rate used in calculating the present value of the estimated future cash flows is based on a weighted
average cost of equity and debt capital (WACC). The WACC considers a debt-equity ratio of an average market partici-pant. The market beta is based on comparable peer companies and an additional risk premium was added to the cost of equity. The cost of debt is based on conditions on which comparable companies can obtain long-term financing.
An impairment loss is recognized whenever the carrying amount of the cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in profit or loss.
Consideration is given at each reporting date to determine whether there is any indication of impairment of the car-rying amounts of the Group\u2019s property, plant and equipment and intangible assets with finite useful lives.
If any such indication exists, the asset\u2019s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognized in profit or loss and the carrying amount of related asset is reduced through use of an allowance account.
The recoverable amount of the Group\u2019s property, plant and equipment and intangible assets with finite useful lives is the greater of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognized.
50.13.2\tImpairment testing for right-of-use assets
At each reporting date, the Group reviews the carrying amounts of its right-of-use assets to determine whether there is any indication of impairment. Indication of impairment exists when a lease concluded as a lessee becomes onerous in which case an impairment loss is recognized, measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.
50.13.3\tImpairment of financial assets and contract assets
With regard to impairment of trade receivables, lease receivables and contract assets, the Group applies the simplified approach for the impairment evaluation, which implies that credit losses for these categories of assets are always measured at an amount equal to lifetime expected credit losses. Credit losses are measured as the present value of all cash shortfalls \u2013 i.e. the difference between the cash flows to which the entity is entitled to and what the entity expects to receive. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
The inputs and assumptions to the expected credit loss model are the following: significant financial difficulty of the counterparty, a default of more than 90 days past due, a possible bankruptcy of the counterparty, \u2026
The evaluation of possible impairment takes into account forward-looking elements. For the major portion of the accounts receivable balances, debtors are scored and rated based on quantitative and qualitative information on an ongoing basis through Credit Risk Application in place. All customers are classified into different risk categories which are reassessed on a yearly basis based on relevant forward-looking information such as data from external credit bureaus, age of business, country risk and the credit manager\u2019s assessment. To mitigate the credit risk, credit insurance and other risk mitigation tools such as letter of credit, bank guarantees, mortgage are used within the Group.
This methodology of individually reviewing outstanding receivable amounts taking into account forward-looking information to assess impairment risks hasn\u2019t been changed due to the application of IFRS 9.
Loss allowances for financial assets measured at amortized cost are charged to profit or loss and deducted from the gross carrying amount of the assets to obtain a net presentation in the consolidated financial statements. For debt securities at FVOCI, the loss allowance is charged to profit or loss.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recov-ering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment for each type of financial asset based on whether there is a reasonable expectation of recovery. Financial assets that are written off are still subject to enforcement activities of the Group for recovery of amounts due.
50.14 LEASES
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
A. As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the considera-tion in the contract to each lease component on the basis of its relative stand-alone prices. The Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group\u2019s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group determines its incremental borrowing rate (IBR) twice a year based on the government bond yields per country and per maturity bucket obtained from Reuters and adds a risk premium reflecting the Group\u2019s risk profile. The latter risk premium differs from the country risk classified according to the Organization of Economic Cooperation and Development (OECD). Depending on the low, medium or high risk of the country a different spread is added. As such an IBR-matrix is obtained reflecting six maturity buckets and 50 countries.
Lease payments included in the measurement of the lease liability comprise the following:
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the com-mencement date; and
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
There are no leases for which it is expected that the Group would need to pay a residual value guarantee.
The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in an index or rate if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets (mainly related to IT equipment) and short-term leases. Short-term leases are leases with a lease term of twelve months or less. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
On the statement of financial position right-of-use assets are presented separately whereas lease liabilities are com-prised in \u2018Loans and borrowings.\u2019 All lease payments that are due within 12 months after the balance sheet date are classified as current liabilities. All lease payments that are due later than 12 months after the balance sheet date are classified as non-current liabilities.
B. As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
The majority of the Group\u2019s finance lease arrangements are concluded by Agfa Finance, i.e. Agfa Finance NV or its subsidiaries Agfa Finance Corp. and Agfa Finance Inc.
On manufacturing leases, the Group recognizes revenue and related profit margin at the moment a Group\u2019s manufac-turing organization or any related company invoices Agfa Finance at commencement of the lease with the external customer.
A commercial contract whereby a certain piece of equipment is financed by means of a medium or long-term agree-ment under which the customer commits to purchase a certain level of consumables at a mark-up price is called a \u2018bundle deal.\u2019 At each sale of consumables, the Group allocates the consideration received from this sale to a reduc-tion of the outstanding lease receivable and revenue from sale of goods on the basis of their stand-alone selling prices.
Receivables under finance leases are measured at an amount equal to the discounted future minimum lease pay-ments. Finance lease income \u2013 presented as part of \u2018Other operating income\u2019 \u2013 is subsequently recognized based on a pattern reflecting constant periodic rate of return on the net investment using the effective interest method.
On the statement of financial position receivables under finance leases are presented separately. All lease receivables that are due within 12 months after the balance sheet date are classified as current assets. All lease receivables that are due later than 12 months after the balance sheet date are classified as non-current assets.
The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease.
The Group recognizes lease payments received under operating leases as revenue, on a straight line basis over the lease term.
50.15 OTHER ASSETS
Other assets comprise deferred charges and other non-financial assets. Deferred charges relate to payments made by the Company before the balance sheet date in respect of the expenses of future periods (prepayments). Examples of deferred charges are payments of rent, interests and insurance premiums that were made before the balance sheet date but relate to a specific period after the balance sheet date.
Non-financial assets are carried at cost. Deferred charges are recognized in profit or loss by the straight-line method or according to performance of the services received.
50.16 INVENTORIES
Raw materials, supplies and goods purchased for resale are valued at purchase cost.
Work in progress and finished goods are valued at the cost of production. The cost of production comprises the direct cost of materials, direct manufacturing expenses, appropriate allocations of material and manufacturing overheads, and an appropriate share of the depreciation of assets used for production. It includes the share of expenses for company pension plans and discretionary employee benefits that are attributable to production. Administrative costs are included where they are attributable to production. Inventories are valued using the weighted-average cost method.
If the purchase or production cost is higher than the net realizable value, inventories are written down to net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. The cost of inventories may not be recoverable in following situations:
obsolete inventory: this is determined based on a list of non-moving or slow-moving inventory-items, including items approximating the expiry date;
damaged or expired inventory items or products showing quality problems;
declining selling prices.
Within the Group, write-downs of inventories mainly result from obsolescence.
50.17 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash, checks received, and balances with banks and companies. Cash equivalents are highly liquid short-term financial investments that are subject to an insignificant risk of changes in value, are easily convertible into a known amount of cash and have a maturity of three months or less from the date of acquisition or investment.
50.18 SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognized as a deduction from retained earnings.
When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and presented as a deduction from total equity under the caption \u2018Reserve for own shares\u2019. Repur-chased shares are accounted for using settlement date accounting. Cancelled treasury shares are transferred from
\u2018Reserve for own shares\u2019 to \u2018Retained earnings\u2019. When treasury shares are sold, the amount received is recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within share premium.
50.19 PROVISIONS
Provisions are recognized in the statement of financial position when a Group company has a present obligation (legal or constructive) as a result of a past event and when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the reporting date.
If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
50.19.1 Restructuring
A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced to those affected by it. Future operating costs are not provided for.
50.19.2 Environmental protection
In accordance with the Group\u2019s published environmental policy and applicable legal requirements, a provision for site restoration in respect of contaminated land is recognized when the land is contaminated.
50.19.3 Trade-related
Trade-related provisions mainly comprise provisions for sales commissions and warranty and commercial litiga-tions. A provision for product warranty is made at the time of revenue recognition and reflects the estimated costs of replacement that will be incurred by the Group.
50.19.4 Onerous contracts
A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a con-tract are lower than the unavoidable cost of meeting its obligations under the contract, which is determined based on the incremental cost of fulfilling the obligation under the contract and an allocation of other costs directly related to fulfilling the contract. Provisions are established for impending losses on purchase or sales contracts at the amount of the anticipated losses.
50.20 Contract liabilities
The Group applies IFRS 15 Revenue from contracts with customers, that introduced the concept of contract assets and contract liabilities.
Contract liabilities comprise deferred revenue and advance payments received from customers as well as accruals for bonuses and rebates related to goods and services purchased by customers during the period.
50.21 Other liabilities
Other liabilities primarily relate to unearned other operating income. Government grants are a typical example of unearned other operating income. They are recognized in profit or loss when there is a reasonable assurance that the conditions attached to the grants will be or are complied with and the grants will be received. Grants that compensate the Group for expenses incurred are recognized in profit or loss under the same functional reporting line item as the corresponding expenses. They are recognized as income over the periods necessary to match them on a systematic basis to the costs that are intended to be compensated. Grants awarded for the purchase or production of assets (Intangible assets or Property, plant and equipment) are recognized initially as other liability and then recognized in profit or loss as other income on a systematic basis over the useful life of the asset. Government grants for future expenses are recorded as other liabilities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__102": { "value": "50. MATERIAL ACCOUNTING POLICIES
50.1 BASIS OF CONSOLIDATION
50.1.1 Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group (see note 50.1.4).
Control is the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Goodwill is not amortized but tested for impairment on an annual basis and whenever there is an indication that the cash-generating unit to which goodwill has been allocated may be impaired. The impairment testing process is described in the appropriate section of these policies. Goodwill is stated at cost less accumulated impairment losses. With respect to associates, the carrying amount of goodwill is included in the carrying amount of the investment.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognized amount of any non-controlling interests in the acquiree; and if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net fair value of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss. Any contingent consideration payable is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration recognized as a liability are recognized in profit or loss.
Costs related to the acquisition are expensed as incurred.
50.1.2. Discontinued operations
A discontinued operation is a component of the Group\u2019s business, the operations and cash flows which can be clearly distinguished from the rest of the Group and which:
represents a separate major line of business or geographic area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when an operation meets the criteria to be reclassified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation has been discontinued from the start of the comparative year.
50.1.3 Measurement of non-controlling interests
Non-controlling interests are measured at their proportionate share of the acquirees identifiable net assets at the date of acquisition.
50.1.4 Subsidiaries
A subsidiary is an entity controlled by the Company. Control exists when the Company has the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of a subsidiary are included in the consolidated financial statements from the acquisition date until the date when the parent ceases to control the subsidiary.
50.1.5 Loss of control
On the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling inter-ests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted inves-tee or as a financial asset depending on the level of influence retained.
50.1.6 Investments in associates
An associate is an entity in which the Company has significant influence and that is neither a subsidiary nor an inter-est in a joint venture. Significant influence is presumed to exist when the Company holds between 20% and 50% of the voting power of another entity. An investment in an associate is accounted for using the equity method from the date on which it becomes an associate and is recognized initially at cost. The cost of the investment includes transaction costs. On acquisition of the investment, any difference between the cost of the investment and the Company\u2019s share of the net fair value of the associate\u2019s identifiable assets and liabilities is accounted for as follows:
goodwill relating to an associate is included in the carrying amount of the investment;
any excess of the Company\u2019s share of the net fair value of the associate\u2019s identifiable assets and liabilities over the cost of the investment is included as income in the determination of the Company\u2019s share of the associate\u2019s profit or loss in the period in which the investment is acquired.
Elimination of unrealized profits and losses on transactions with associates
Profits and losses resulting from upstream and downstream transactions between the Company \u2013 included its consol-idated subsidiaries \u2013 and an associate must be eliminated to the extent of the Company\u2019s interest in the associate.
Upstream transactions are, for example, sales of assets from an associate to the Company. Downstream transactions are, for example, sales of assets from the Company to an associate.
When an investment ceases to be an associate
From the date when the Company ceases to have significant influence over an associate, it accounts for related invest-ment in accordance with IFRS 9 from that date. On the loss of significant influence, the Company measures at fair value any investment the Company retains in the former associate.
The Company recognizes in profit or loss any difference between:
the fair value of any retained investment and any proceeds from disposing of the (partial) interest in the associate; and
the carrying amount of the investment at the date when significant influence is lost.
Amounts recognized in OCI in relation to the associate or joint venture are accounted for on the same basis as would be required if the investee had disposed of the related assets and liabilities directly.
50.1.7 Transactions eliminated on consolidation
Intragroup balances and transactions, including income, expenses and dividends, are eliminated in full. Unrealized profits and losses resulting from intragroup transactions that are recognized in assets, such as inventory and fixed assets, are eliminated in full.
Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group\u2019s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
50.2 FOREIGN CURRENCY
Items included in the financial statements of each of the Company\u2019s entities are measured using the currency of the primary economic environment in which the entity operates (\u2018the functional currency\u2019). The consolidated financial statements are presented in euro, which is the Company\u2019s functional and presentation currency.
50.2.1 Foreign currency transactions
All transactions in currencies other than the functional currency are foreign currency transactions. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the trans-actions. Foreign currency gains and losses resulting from the settlement of such transactions and from the translation at closing rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss. However, foreign currency differences arising from the translation of the following items are recognized in OCI:
an investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognized in OCI are reclassified to profit or loss);
qualifying cash flow hedges to the extent that the hedges are effective.
Non-monetary assets and liabilities measured at historical cost that are denominated in foreign currencies are trans-lated using the exchange rate at the date of the transaction.
50.2.2 Foreign operations
A foreign operation is an entity that is a subsidiary, associate, joint venture or branch of the Company, of which the activities are based or conducted in a currency other than the euro.
The financial statements of foreign operations are translated for the purpose of the consolidation as follows:
assets and liabilities are translated at the closing rate;
income and expenses are translated at average year-to-date exchange rates; and
equity components are translated at historical rates, excluding current year movements, which are translated at rates approximating the rate at the time of the transaction.
All resulting exchange differences are recognized in other comprehensive income and accumulated in a separate component of equity being translation reserve. The amount attributable to any non-controlling interests is allocated to and recognized as part of non-controlling interests.
On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.
On the partial disposal of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to non-controlling interests in that foreign operation. Any other partial disposal of a foreign operation \u2013 related to an associate, joint venture or branch of the Company \u2013 results in a reclassification to profit or loss of the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income.
A partial disposal of an entity\u2019s interest in a foreign operation is any reduction in an entity\u2019s ownership interest in a foreign operation, except for those reductions resulting in:
the loss of control of a subsidiary;
the loss of significant influence over an associate;
the loss of joint control over a joint arrangement.
These reductions are accounted for as disposals resulting in a reclassification from other comprehensive income to profit or loss of the cumulative amount of the exchange differences relating to that foreign operation.
50.3 REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from contracts with customers is recognized according to the criteria set in IFRS 15 Revenue from contracts with customers. In recognizing revenue from contracts with customers a five-step approach is to be applied: first the contract with the customer should be identified; then the distinct performance obligations in the contract should be identified; as a third step the transaction price should be determined; then the transaction price should be allocated to the distinct performance obligations in the contract; and finally revenue is recognized when the distinct perfor-mance obligation is satisfied. The standard moreover specifies whether revenue should be recognized at a certain point in time or over a period of time.
Revenue is recorded net of sales taxes, customer discounts and rebates.
The Group\u2019s policy distinguishes revenue from the sale of goods, the rendering of services and multiple-element arrangements.
Revenue from the sale of goods comprises revenue from the sale of consumables, chemicals, spare parts, standalone equipment and software licenses. Revenue from the rendering of services includes installation services, maintenance and post-contract support services. The Group also enters into arrangements combining multiple deliverables such as software, hardware/equipment and services, including training, maintenance and post-contract customer support, the \u2018multiple-element arrangements.\u2019 Freight charged to customers is recognized as revenue as incurred.
A. Sale of goods
Revenue from the sale of goods is recognized when the customer obtains control of the goods and when it is probable that the agreed transaction price will be collected. In evaluating whether collectability is probable, the entity consid-ers the customer\u2019s ability and intention to pay that amount when it is due. Revenue from the sale of goods is, under IFRS 15, recognized upon delivery following applicable freight terms, at a point in time.
Revenue from the sale of stand-alone software licenses is recognized at a point in time, at the delivery of the source key. The license is recognized at a point in time as the Group provides the customer access to and a right to use the intellectual property as it exists at a point in time.
In case volume discounts incentives are offered to the customer, the expected volume rebates are estimated based on historical experience. The amount of the variable consideration is made based on the most likely amount-method. The variable consideration is recognized only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue will not occur.
B. Rendering of services
Under the IFRS 15 standard, revenue from maintenance contracts is recognized straight-line over the maintenance period as the customer simultaneously receives and consumes the benefits from the maintenance over time.
Revenue from installation and implementation services are recognized as rendered. The progress is measured based on input methods being the labor hours expended to date versus the estimated hours spend.
When in a service contract multiple services are offered, the total consideration is allocated to all services based on their stand-alone selling price.
C. Multiple-element arrangements
Multiple-element arrangements offer the customer a combination of several deliverables such as software, licenses, hardware, implementation services and maintenance and post-contract support services. For arrangements not requiring substantive customization of the software, each of aforementioned deliverables is assumed to qualify as a separate performance obligation.
The total arrangement fee is allocated to the distinct performance obligations based on the stand-alone selling prices of the performance obligations. In case discounts are offered, a proportionate amount is allocated proportionally to each performance obligation based on their stand-alone selling price.
Within the HealthCare IT and Radiology Solutions business segments, most arrangements do not require significant customization or modification.
Revenue allocated to the hardware portion of the arrangement is recognized on delivery when it creates value to the customer on a stand-alone basis. Hardware is considered as a distinct performance obligation as there is no trans-formative relationship between the hardware and other components of the contract.
Revenue allocated to the software component is recognized after successful installation and acceptation at the client\u2019s premises. The software license is a distinct performance obligation as the customer can benefit from the license with readily available resources. The license is recognized at a point in time as the Group provides the customer access to and a right to use the intellectual property as it exists at a point in time.
Revenue from installation and implementation services are recognized as rendered. The progress is measured based on input methods being the labor hours expensed to date versus the estimated hours spend.
Extended warranty whereby the customer purchases additional warranty separately, i.e. warranty that is adding additional services on top of the legal warranty or for a longer period than legal warranty, is considered as a distinct performance obligation within multiple-element arrangements.
Revenue recognized for which no billing has yet occurred is recognized in the statement of financial position as contract assets and advance payments received for which no revenue has been recognized is presented as contract liabilities.
Within the HealthCare IT segment, the Group also offers \u2018Software as a Service\u2019 arrangements, whereby products and services including own IP and other services are offered through cloud computing under a subscription model on a pay-per-use model. Agfa offers a right to access the software as it exists throughout the license period. The cloud component is a service towards the customer who can access the software on an as-needed basis over the internet or a dedicated line. Revenue is recognized over time based on a pay-per-use schedule.
Within the Digital Print and Chemicals divisions, revenue from sale of equipment that require substantive installation activities is recognized when the installation of the equipment is finalized in accordance with the contractually agreed specifications. Installation services and equipment are considered highly interrelated and are identified as one performance obligation that is recognized at a point in time, i.e. at installation at the client\u2019s premises. Revenue from the sale of smaller equipment not requiring substantive installation activities is recognized when the customer obtains control of the goods.
50.4 EMPLOYEE BENEFITS
For the accounting treatment of post-employment plans, IFRS distinguishes defined contribution plans and defined benefit plans. The classification depends on which party \u2013 Company or employee \u2013 bears the actuarial and invest-ment risk. In case of a defined contribution plan, the employee bears all the risks and therefore the Company does not recognize a liability in its statement of financial position except for any unpaid contribution. In case of a defined benefit plan, the Company bears the actuarial and investment risk and should consequently recognize a liability in its statement of financial position.
50.4.1 Defined contribution plans
Contributions to defined contribution pension plans are recognized as an expense in profit or loss as incurred.
They are allocated among functional costs: cost of sales, research and development expenses, selling and administra-tive expenses, following the functional area of the corresponding profit and cost centers to which related employees are attributed.
50.4.2 Defined benefit plans
As from December 31, 2016, the accounting treatment for Belgian defined contribution plans with return guaranteed by law has been aligned with the accounting treatment of defined benefit plans.
A. Liabilities for post-employment benefits
For defined benefit plans, the amount recognized in the statement of financial position is determined as the present value of the defined benefit obligation less the fair value of any plan assets. Where the calculation results in a net surplus, the recognized asset does not exceed the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.
The present value of the defined benefit obligations (DBO) and the service costs are calculated by a qualified actuary using the Projected Unit Credit (PUC) method. Under this method projected benefits that are payable each future year are discounted to the reporting date at the assumed interest rate. The resulting total benefit obligation is then allocated to past service, presenting the DBO and year-in-service, presenting the service cost. The assumed interest rate is the discount rate based on yields at reporting date on high-quality corporate bonds that have maturity dates approximating the terms of the Group\u2019s obligations. In determining the net present value of the future benefit entitle-ment for service already rendered (DBO), the Group considers future compensation and benefit increases.
The DBO also comprises the present value from the effects of taxes payable by the plan on contributions or benefits relating to services already rendered.
More information about the application of the PUC method for Belgian defined contribution plans can be found hereafter.
B. Defined benefit cost recognized in profit or loss and other comprehensive income
The amount charged to profit or loss consists of current service cost, past service cost, gain or loss on settlement, net interest cost and administrative expenses and taxes. Current service costs as well as administrative expenses and taxes, which are borne by the employer(s) participating to the plan, are allocated among functional costs: cost of sales, research and development expenses, selling and general administrative expenses, following the functional area of the corresponding profit and cost centers to which related employees are attributed. Past service cost and settle-ment gains (losses) are recognized immediately in profit or loss under Other operating income or Other operating expense when the plan amendment, curtailment or settlement occurs. Administrative expenses which are related to the management of plan assets and taxes directly linked to the return on plan assets \u2013 borne by the plan itself \u2013 are included in the return on plan assets and are recognized in Other comprehensive income, net of income taxes (OCI).
Net interest cost is recognized in profit or loss under other finance expense. It is calculated by applying the discount rate used to measure the defined benefit obligation to the net defined benefit liability. The net interest cost is broken down into interest income on plan assets and interest cost on the defined benefit obligation. The difference between the return on plan assets and the interest income on plan assets is included in line item 'Net amount of remeasure-ments of the net defined benefit liability recorded in equity' and recognized in Other comprehensive income, net of income taxes. Next to the difference between the actual return and the interest income on plan assets, the line item \u2018Net amount of remeasurements of the net defined benefit liability recorded in equity\u2019 also comprises actuarial gains and losses resulting for example from an adjustment of the discount rate.
C. Defined contribution plans with return guaranteed by law
Belgian defined contribution plans are subject to the Occupational Pensions Act of April 2003. According to article 24 of this Act, affiliated persons are entitled to a guaranteed minimum return on contributions made by either the organizer of the plan or the employee. Some conditions in this law, such as the required level of minimum return, have been amended by the Act of December 18, 2015. Similar to the measurement of all other defined benefit plans, the net pension liability related to defined contribution plans with return guaranteed by law is calculated as the dif-ference between the present value of the defined benefit obligation (DBO) and the fair value of the plan assets. As of December 31, 2016, the present value of the defined benefit obligation (DBO) and the service costs are calculated by a qualified actuary using the Projected Unit Credit (PUC) method. More information on the general principles of this method can be found under liabilities for post-employment benefits.
Within the Belgian Agfa-Gevaert Group entities, all insured plans guarantee a fixed return up to the retirement age (so-called Branch 21 insured products). Depending on the nature of the insured contract, the DBO has been deter-mined with or without future contributions and their related minimum returns up to the retirement age or exit. For the Top Performance Plan no future contributions were considered, for all other \u2018Branch 21\u2019 insured products recur-ring contributions are paid and therefore considered in the actuarial calculation.
Similar to the Belgian DC-plans, the Group\u2019s Swiss DC-plans are accounted for as DB-plans under IAS 19.
In measuring the plan assets of the Swiss DC-plans, we apply paragraph 115 of IAS19. Paragraph 115 of IAS19 applies to the valuation of the pension plan assets where the liabilities are backed by insurance contracts that match the amount and timing of some or all the benefits payable under the plan. In such situations the value of the insurance contracts is set equal to the present value of the related liabilities (valued on the IAS19 assumptions, and in particular the IAS19 discount rate is used in calculating the present value of the future benefit payments).
For Belgian plans, the plan assets of the Fabriekspensioen are valued at the fair value of the pension fund's assets as of the calculation date. For all other plans, the valuation of plan assets follows the so-called \"\u00a7113\" methodology, in accordance with paragraph 113 of the IAS19 standard. This approach determines the fair value of plan assets as the present value of insured benefits provided by insurers. These insured benefits are based on the interest guarantees offered by insurers on past contributions, valid until the contract's maturity. The present value calcu-lation employs a discount rate derived from single A-rated financial bonds, reflecting the associated risk with the insurers. As of year-end 2024, this rate is established at 3.75%, which is 0.40% above the rate used for calculating the Defined Benefit Obligation.
50.4.3 Termination benefits
Termination benefits are recognized as a liability and an expense when a Group company is demonstrably committed to either:
terminate the employment of an employee or group of employees before the normal retirement date; or
provide termination benefits as a result of an offer made in order to encourage voluntary redundancy and to the extent it is probable that the employees will accept the offer.
Where termination benefits fall due more than twelve months after the reporting date, they are discounted using a discount rate which is the yield at reporting date on high quality corporate bonds that have maturity dates approxi-mating the terms of the Group\u2019s obligations.
The interest impact of unwinding and re-measuring long-term termination benefits at adjusted discount rates at financial reporting date is reflected in profit or loss under \u2018Other finance expense\u2019 whereas the impact of increases and decreases of the Group\u2019s commitments are presented under \u2018Other operating expenses \u2013 Restructuring expenses\u2019.
50.4.4 Other long-term employee benefits
The Group\u2019s net obligation in respect of long-term employee benefits, other than pension plans, post-employment life insurance and medical care, is the amount of future benefit that employees have earned in return for their service in current and prior periods. The obligation is calculated using the Projected Unit Credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate used is the yield at reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Group\u2019s obligations.
Unlike the accounting treatment of post-employment defined benefit plans, remeasurements of other long-term employee benefits are not reflected in other comprehensive income. Instead, the impact of remeasurements is recog-nized in profit or loss.
50.4.5 Current employee benefits
Current employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid within twelve months if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.
50.4.6 Share-based payment transactions
The Group has granted a long-term variable compensation embedded in a cash-settled share-based payment plan to its CEO and key personnel members of the Group. This plan can result in an additional cash bonus.
Related share appreciation rights do not vest until the eligible persons have completed a specified period of service. Therefore, the Company recognizes the services received, and a liability to pay for them, as the eligible person renders service during that period. The liability is measured, initially and at the end of each reporting period until
settled, at the fair value of the share appreciation rights, by applying an option pricing model, and the extent to which the employees have rendered service to date. Changes in fair value are recognized in profit or loss. Both the cost recognized at initial measurement as well as the impact of changes in fair value are considered as employee benefit expenses. Black-Scholes is the applied option pricing model.
50.5 RESEARCH AND DEVELOPMENT EXPENSES
For accounting purposes, research expenses are defined as costs incurred for current or planned investigations undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Development expenses are defined as costs incurred for the application of research findings or specialist knowledge to plans or designs for the production, provision or development of new or substantially improved products, services or pro-cesses, respectively, prior to the commencement of commercial production or use.
Research and development expenses are incurred in the Agfa-Gevaert Group for in-house research and development activities as well as numerous research and development collaborations and alliances with third parties.
Research and development expenses include, in particular, the running costs of the research and development departments such as personnel expenses, material costs and depreciation of fixed assets as well as the costs of laboratories, costs of applications development facilities, engineering departments and other departments carrying out research and development tasks, costs of contacts with universities and scientific institutes including expenses incurred for commissioned research and development work.
Research costs cannot be capitalized. The conditions for capitalization of development costs are strictly defined: an intangible asset must be recognized if, and only if, there is reasonable certainty on the technical feasibility of com-pleting the asset so that it will be available for use or sale, on the entity\u2019s intention to complete the intangible asset, on the ability to use or sell the asset, on how the entity will generate probable future economic benefits, on the availabil-ity of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, on the ability to measure reliably the expenditure of the intangible asset during its development.
50.6 NET FINANCE COSTS
Interest income (expense) \u2013 net comprises interests receivable/payable in relation to items of the net financial debt position.
Net financial debt is defined as current and non-current loans and borrowings and lease liabilities less cash and cash equivalents.
Other finance income (expense) \u2013 net comprises:
interest received/paid on other assets and liabilities not part of the net financial debt position such as the net inter-est cost of defined benefit plans and the interest component of long-term termination benefits;
exchange results on non-operating activities;
changes in the fair value of derivative instruments economically hedging non-operating activities;
the ineffective portion of cash flow hedges hedging non-operating activities;
impairment losses recognized on financial assets;
results on the sale of marketable securities;
change in contingent consideration from a business combination; and
other finance income (expense).
Interest income is recognized in profit or loss as it accrues, taking into account the effective yield on the asset. Divi-dend income is recognized in profit or loss on the date that the dividend is declared.
All interest and other costs incurred in connection with borrowings are expensed as incurred using the effective inter-est rate. The interest expense component of lease payments is recognized in profit or loss using the effective interest rate method.
The net interest cost of defined benefit plans is determined by multiplying the net defined benefit liability by the discount rate that is used to measure the defined benefit obligation, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability during the period as a result of contributions and benefit payments.
The interest component of long-term termination benefits comprises the impact of unwinding the liability as well as the impact of the changed discount rate.
50.7 INCOME TAX AND OTHER TAX
Income tax on the profit (loss) for the year comprises taxes paid or accrued and deferred tax expense (income). Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in other com-prehensive income, in which case it is recognized in other comprehensive income or if part of a business combination in which case it is recognized against goodwill.
In determining the amount of taxes paid or accrued and deferred tax expense (income), the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due.
Other tax receivables and liabilities relate to other tax, such as VAT, property tax and other indirect taxes. They are carried at cost. Both current and other tax receivables are offset against current tax liabilities, respectively other tax liabilities when they relate to taxes levied by the same taxation authority and are intended to be settled on a net basis and there is a legal right to offset.
50.7.1 Income taxes paid or accrued
Taxes paid or accrued are the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend.
Current income tax for current and prior periods are, to the extent unpaid, recognized as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recog-nized as an asset.
50.7.2 Deferred tax
Deferred tax is calculated using the balance sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not provided for:
taxable temporary differences on the initial recognition of goodwill;
the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss); and
differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the reporting date. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and credits can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and deferred tax liabilities are offset in the statement of financial position if the entity has a legal right to settle current tax amounts on a net basis and the deferred tax amounts are levied by the same taxing author-ity on the same entity that intend to realize the asset and settle the liability at the same time.
50.8 GOODWILL
Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carry-ing amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity-accounted investee as a whole.
50.9 INTANGIBLE ASSETS WITH FINITE USEFUL LIVES
50.9.1 Recognition and measurement
Intangible assets with finite useful lives are stated at cost less accumulated amortization and impairment losses.
Research and development costs are expensed as they are incurred, except for certain development costs, which are capitalized when it is probable that a development project will be a success, and certain criteria, including technolog-ical and commercial feasibility, have been met. Capitalized development costs are amortized on a systematic basis over their expected useful lives.
In accordance with IFRS 3 Business combinations, if an intangible asset is acquired in a business combination, the cost of that intangible asset is its fair value at the acquisition date. The fair value of an intangible asset reflects market expectations about the probability that the future economic benefits embodied in the asset will flow to the entity.
50.9.2 Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.
50.9.3 Amortization
Intangible assets with finite useful lives, such as acquired technology and customer relationships are amortized on a straight-line basis over their estimated useful lives, generally for periods ranging from five to 15 years. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
50.10 PROPERTY, PLANT AND EQUIPMENT
50.10.1 Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
The cost of an item of property, plant and equipment comprises:
its purchase price, including import duties and non-refundable purchase taxes;
any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management;
the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which the Company incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period;
capitalized borrowing costs.
For self-constructed assets, directly attributable costs are direct cost of materials, direct manufacturing expenses, appropriate allocations of material and manufacturing overheads, and an appropriate share of the depreciation of assets used in construction. It includes the share of expenses for company pension plans and discretionary employee benefits that are attributable to construction and capitalized borrowing costs.
50.10.2\tSubsequent expenditure
Expenses for the repair and maintenance of property, plant and equipment are usually expensed as incurred. They are, however, capitalized when they increase the future economic benefits embodied in the item of property, plant and equipment.
50.10.3\tDepreciation
Property, plant and equipment is depreciated on a straight-line basis over the estimated useful life of the item. For leased assets, the depreciation period is the estimated useful life of the asset, or the lease term if shorter.
The estimated useful lives of the respective asset categories are as follows:
Buildings | 20 to 50 years |
Outdoor infrastructure | 10 to 20 years |
Plant installations | 6 to 20 years |
Machinery and equipment | 6 to 12 years |
Laboratory and research facilities | 3 to 5 years |
Vehicles | 4 to 8 years |
Computer equipment | 3 to 5 years |
Furniture and fixtures | 4 to 10 years |
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
50.11 NON-CURRENT ASSETS HELD FOR SALE
The Group classifies an asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets (or disposal groups) and its sale must be highly probable.
Immediately before classification as held for sale, the Group measures the carrying amount of the asset (or all the assets and liabilities in the disposal group) in accordance with applicable IFRS. Then, on initial classification as held for sale, assets and disposal groups are recognized at the lower of their carrying amounts and fair value less costs to sell. Impairment losses are recognized for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. Assets classified as held for sale are no longer amortized or depreciated.
50.12 FINANCIAL INSTRUMENTS
50.12.1 Financial assets
Financial assets comprise equity and debt instruments in another entity, cash and cash equivalents, loans receivable,
trade receivables, receivables under finance leases and other receivables as well as derivative financial instruments.
The Group initially recognizes loans and receivables on the date that they are originated. All other non-derivative financial assets are recognized on the trade date when the Group becomes a party to the contractual provisions of the instrument.
A trade receivable without significant financing is initially measured at its fair value plus any transaction costs that are directly attributable to the acquisition of the financial assets. Transaction costs related to financial assets and liability carried at fair value through profit and loss are recognized in the income statement.
The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the rights to receive the contractual cash flows on a financial asset in a transaction in which substan-tially all the risks and rewards of ownership of the financial asset are transferred. In a transaction where an entity neither transfers nor retains substantially all of the risks and rewards of ownership of a financial asset, the related asset is derecognized in case the entity lost control of the asset. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The Group has the following categories of non-derivative financial assets: financial assets at amortized cost and financial assets at fair value through other comprehensive income. Its classification reflects the business model in which the assets are managed and their cash flow characteristics.
A. Financial assets at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All the Group\u2019s receivables \u2013 trade receivables, receivables under finance leases as well as other receivables \u2013 and cash and cash equivalents fit into aforementioned definition and are consequently measured at amortized cost.
B. Financial assets at fair value through other comprehensive income (FVOCI)
A debt instrument is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contrac-tual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
The Group has made an irrevocable election for the investment in Digital Illustrate Inc. to classify it as FVOCI. The impact of subsequent measurement of this investment in equity securities is reflected in OCI under other reserves. This item in OCI will not be reclassified subsequently to profit or loss. The Group does not hold any other assets in this category.
50.12.2\tFinancial liabilities
Financial liabilities comprise uncommitted bank facilities, revolving and other credit facilities, trade and other paya-bles as well as derivative financial instruments.
Financial liabilities are recognized initially at fair value on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
At initial recognition, the Group measures its financial liabilities at its fair value less any transaction costs that are directly attributable to the issuance of the financial liability.
Non-derivative financial liabilities are subsequently measured at amortized cost except for financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies.
Interest-bearing loans and borrowings are stated at amortized cost with any difference between the initial amount and the maturity amount being recognized in profit or loss over the expected life of the instrument on an effective interest rate basis.
If a transfer of a financial asset does not result in derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received. In subsequent periods, the Group recog-nized any income on the transferred asset and any expense incurred on the financial liability.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, and retains control of the transferred asset, the entity continues to recognize the transferred asset to the extent of its continuing involvement and recognizes an associated liability. The extent of the Group\u2019s continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset.
The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the entity has retained. The associated liability is measured in such a way that the net carrying amount of the transferred asset and the associated liability is the amortized cost of the rights and obligations retained by the Group assuming the transferred asset is measured at amortized cost.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired. The Group also derecognizes a financial liability when the terms are modified and the cash flows of the modified lia-bility are substantially different, in which case a new financial liability based on modified terms is recognized at fair value. On derecognition of the financial liability, the difference between the carrying amount extinguished and the consideration paid is recognized in profit or loss.
50.12.3\tDerivative financial instruments and hedge accounting
The Group uses derivative financial instruments primarily to manage its exposure to foreign currency risks arising from operational, financing and investment activities.
The Group uses following types of derivative financial instruments: forward exchange contracts used for hedging, swap contracts used for hedging and other forward exchange contracts and swap contracts.
The Group uses forward exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to future sales and purchases.
Derivative financial instruments that are not designated as cash flow hedges are measured at fair value through profit or loss.
Derivative financial instruments are initially recognized at fair value on the date at which a derivative contract is entered into (trade date) and are subsequently re-measured at their fair value. In case cash flow hedge or net invest-ment hedge accounting is applied, the effective portion of any gain or loss is recognized in OCI, the non-effective portion in profit or loss. Transaction costs related to financial assets and liability carried at fair value through profit and loss are recognized in the income statement.
The Group has the following categories of derivative financial instruments: derivatives not formally designated as hedging instruments and cash flow hedging instruments.
A. Hedging instruments
The Group\u2019s forward exchange contracts and swap contracts, that are formally designated as cash flow hedging instruments, are subsequently re-measured at their fair value.
Cash flow hedge accounting is applied to all hedges that qualify for hedge accounting when required documentation of the hedging relationship is in place and when the hedge is determined to be effective. When hedge accounting is applied, the effective portion of any gain or loss is recognized in OCI, the non-effective portion in profit or loss.
With regard to hedge accounting, the Group applies the requirements of IFRS 9. This standard requires the Group to ensure that hedge accounting relationships are aligned with the Group\u2019s risk management objectives and strategy and to apply a more qualitative and forward looking approach to assessing hedge effectiveness. The Group uses forward exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to future sales. The Group currently designates only the change of the spot element of the forward exchange contract as the hedging instrument in cash flow hedging relationships. Under IFRS 9, the change in the fair value of the forward element (\u2018forward points\u2019) is accounted for as fair value through profit or loss and reflected in net finance costs.
The types of hedge accounting transactions that the Group currently designates meet the requirements of IFRS 9 and are aligned with the Group\u2019s risk management strategy and objectives.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is termi-nated or exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in hedge reserve remains in other comprehensive income until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-finan-cial item\u2019s initial cost or for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedge reserve are immediately reclassified to profit or loss.
B. Mandatory at FVTPL
Derivative financial instruments that are economic hedges but that do not meet the hedge accounting criteria of IFRS 9 are categorized as Mandatory at FVTPL and are accounted for as financial assets or liabilities at fair value through profit or loss. The impact in profit or loss is reflected in either other operating income and expense or net finance costs depending on the nature of the item economically hedged.
50.13 IMPAIRMENT
50.13.1 Impairment testing of goodwill, intangible assets and property, plant and equipment
Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually and upon the occurrence of an indication of impairment.
The impairment tests are performed annually at the same time each year and at the cash-generating unit level.
The Group defines its cash-generating units based on the way that it monitors its goodwill and will derive economic benefit from the acquired goodwill and intangibles.
The impairment tests are performed by comparing the carrying value of the assets of these cash-generating units with their recoverable amount, based on their future projected cash flows discounted at an appropriate pre-tax rate of return.
The discount rate used in calculating the present value of the estimated future cash flows is based on a weighted
average cost of equity and debt capital (WACC). The WACC considers a debt-equity ratio of an average market partici-pant. The market beta is based on comparable peer companies and an additional risk premium was added to the cost of equity. The cost of debt is based on conditions on which comparable companies can obtain long-term financing.
An impairment loss is recognized whenever the carrying amount of the cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in profit or loss.
Consideration is given at each reporting date to determine whether there is any indication of impairment of the car-rying amounts of the Group\u2019s property, plant and equipment and intangible assets with finite useful lives.
If any such indication exists, the asset\u2019s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognized in profit or loss and the carrying amount of related asset is reduced through use of an allowance account.
The recoverable amount of the Group\u2019s property, plant and equipment and intangible assets with finite useful lives is the greater of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognized.
50.13.2\tImpairment testing for right-of-use assets
At each reporting date, the Group reviews the carrying amounts of its right-of-use assets to determine whether there is any indication of impairment. Indication of impairment exists when a lease concluded as a lessee becomes onerous in which case an impairment loss is recognized, measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.
50.13.3\tImpairment of financial assets and contract assets
With regard to impairment of trade receivables, lease receivables and contract assets, the Group applies the simplified approach for the impairment evaluation, which implies that credit losses for these categories of assets are always measured at an amount equal to lifetime expected credit losses. Credit losses are measured as the present value of all cash shortfalls \u2013 i.e. the difference between the cash flows to which the entity is entitled to and what the entity expects to receive. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
The inputs and assumptions to the expected credit loss model are the following: significant financial difficulty of the counterparty, a default of more than 90 days past due, a possible bankruptcy of the counterparty, \u2026
The evaluation of possible impairment takes into account forward-looking elements. For the major portion of the accounts receivable balances, debtors are scored and rated based on quantitative and qualitative information on an ongoing basis through Credit Risk Application in place. All customers are classified into different risk categories which are reassessed on a yearly basis based on relevant forward-looking information such as data from external credit bureaus, age of business, country risk and the credit manager\u2019s assessment. To mitigate the credit risk, credit insurance and other risk mitigation tools such as letter of credit, bank guarantees, mortgage are used within the Group.
This methodology of individually reviewing outstanding receivable amounts taking into account forward-looking information to assess impairment risks hasn\u2019t been changed due to the application of IFRS 9.
Loss allowances for financial assets measured at amortized cost are charged to profit or loss and deducted from the gross carrying amount of the assets to obtain a net presentation in the consolidated financial statements. For debt securities at FVOCI, the loss allowance is charged to profit or loss.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recov-ering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment for each type of financial asset based on whether there is a reasonable expectation of recovery. Financial assets that are written off are still subject to enforcement activities of the Group for recovery of amounts due.
50.14 LEASES
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
A. As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the considera-tion in the contract to each lease component on the basis of its relative stand-alone prices. The Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group\u2019s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group determines its incremental borrowing rate (IBR) twice a year based on the government bond yields per country and per maturity bucket obtained from Reuters and adds a risk premium reflecting the Group\u2019s risk profile. The latter risk premium differs from the country risk classified according to the Organization of Economic Cooperation and Development (OECD). Depending on the low, medium or high risk of the country a different spread is added. As such an IBR-matrix is obtained reflecting six maturity buckets and 50 countries.
Lease payments included in the measurement of the lease liability comprise the following:
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the com-mencement date; and
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
There are no leases for which it is expected that the Group would need to pay a residual value guarantee.
The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in an index or rate if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets (mainly related to IT equipment) and short-term leases. Short-term leases are leases with a lease term of twelve months or less. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
On the statement of financial position right-of-use assets are presented separately whereas lease liabilities are com-prised in \u2018Loans and borrowings.\u2019 All lease payments that are due within 12 months after the balance sheet date are classified as current liabilities. All lease payments that are due later than 12 months after the balance sheet date are classified as non-current liabilities.
B. As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
The majority of the Group\u2019s finance lease arrangements are concluded by Agfa Finance, i.e. Agfa Finance NV or its subsidiaries Agfa Finance Corp. and Agfa Finance Inc.
On manufacturing leases, the Group recognizes revenue and related profit margin at the moment a Group\u2019s manufac-turing organization or any related company invoices Agfa Finance at commencement of the lease with the external customer.
A commercial contract whereby a certain piece of equipment is financed by means of a medium or long-term agree-ment under which the customer commits to purchase a certain level of consumables at a mark-up price is called a \u2018bundle deal.\u2019 At each sale of consumables, the Group allocates the consideration received from this sale to a reduc-tion of the outstanding lease receivable and revenue from sale of goods on the basis of their stand-alone selling prices.
Receivables under finance leases are measured at an amount equal to the discounted future minimum lease pay-ments. Finance lease income \u2013 presented as part of \u2018Other operating income\u2019 \u2013 is subsequently recognized based on a pattern reflecting constant periodic rate of return on the net investment using the effective interest method.
On the statement of financial position receivables under finance leases are presented separately. All lease receivables that are due within 12 months after the balance sheet date are classified as current assets. All lease receivables that are due later than 12 months after the balance sheet date are classified as non-current assets.
The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease.
The Group recognizes lease payments received under operating leases as revenue, on a straight line basis over the lease term.
50.15 OTHER ASSETS
Other assets comprise deferred charges and other non-financial assets. Deferred charges relate to payments made by the Company before the balance sheet date in respect of the expenses of future periods (prepayments). Examples of deferred charges are payments of rent, interests and insurance premiums that were made before the balance sheet date but relate to a specific period after the balance sheet date.
Non-financial assets are carried at cost. Deferred charges are recognized in profit or loss by the straight-line method or according to performance of the services received.
50.16 INVENTORIES
Raw materials, supplies and goods purchased for resale are valued at purchase cost.
Work in progress and finished goods are valued at the cost of production. The cost of production comprises the direct cost of materials, direct manufacturing expenses, appropriate allocations of material and manufacturing overheads, and an appropriate share of the depreciation of assets used for production. It includes the share of expenses for company pension plans and discretionary employee benefits that are attributable to production. Administrative costs are included where they are attributable to production. Inventories are valued using the weighted-average cost method.
If the purchase or production cost is higher than the net realizable value, inventories are written down to net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. The cost of inventories may not be recoverable in following situations:
obsolete inventory: this is determined based on a list of non-moving or slow-moving inventory-items, including items approximating the expiry date;
damaged or expired inventory items or products showing quality problems;
declining selling prices.
Within the Group, write-downs of inventories mainly result from obsolescence.
50.17 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash, checks received, and balances with banks and companies. Cash equivalents are highly liquid short-term financial investments that are subject to an insignificant risk of changes in value, are easily convertible into a known amount of cash and have a maturity of three months or less from the date of acquisition or investment.
50.18 SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognized as a deduction from retained earnings.
When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and presented as a deduction from total equity under the caption \u2018Reserve for own shares\u2019. Repur-chased shares are accounted for using settlement date accounting. Cancelled treasury shares are transferred from
\u2018Reserve for own shares\u2019 to \u2018Retained earnings\u2019. When treasury shares are sold, the amount received is recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within share premium.
50.19 PROVISIONS
Provisions are recognized in the statement of financial position when a Group company has a present obligation (legal or constructive) as a result of a past event and when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the reporting date.
If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
50.19.1 Restructuring
A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced to those affected by it. Future operating costs are not provided for.
50.19.2 Environmental protection
In accordance with the Group\u2019s published environmental policy and applicable legal requirements, a provision for site restoration in respect of contaminated land is recognized when the land is contaminated.
50.19.3 Trade-related
Trade-related provisions mainly comprise provisions for sales commissions and warranty and commercial litiga-tions. A provision for product warranty is made at the time of revenue recognition and reflects the estimated costs of replacement that will be incurred by the Group.
50.19.4 Onerous contracts
A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a con-tract are lower than the unavoidable cost of meeting its obligations under the contract, which is determined based on the incremental cost of fulfilling the obligation under the contract and an allocation of other costs directly related to fulfilling the contract. Provisions are established for impending losses on purchase or sales contracts at the amount of the anticipated losses.
50.20 Contract liabilities
The Group applies IFRS 15 Revenue from contracts with customers, that introduced the concept of contract assets and contract liabilities.
Contract liabilities comprise deferred revenue and advance payments received from customers as well as accruals for bonuses and rebates related to goods and services purchased by customers during the period.
50.21 Other liabilities
Other liabilities primarily relate to unearned other operating income. Government grants are a typical example of unearned other operating income. They are recognized in profit or loss when there is a reasonable assurance that the conditions attached to the grants will be or are complied with and the grants will be received. Grants that compensate the Group for expenses incurred are recognized in profit or loss under the same functional reporting line item as the corresponding expenses. They are recognized as income over the periods necessary to match them on a systematic basis to the costs that are intended to be compensated. Grants awarded for the purchase or production of assets (Intangible assets or Property, plant and equipment) are recognized initially as other liability and then recognized in profit or loss as other income on a systematic basis over the useful life of the asset. Government grants for future expenses are recorded as other liabilities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSummaryOfSignificantAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__104": { "value": "50.1 BASIS OF CONSOLIDATION
50.1.1 Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group (see note 50.1.4).
Control is the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Goodwill is not amortized but tested for impairment on an annual basis and whenever there is an indication that the cash-generating unit to which goodwill has been allocated may be impaired. The impairment testing process is described in the appropriate section of these policies. Goodwill is stated at cost less accumulated impairment losses. With respect to associates, the carrying amount of goodwill is included in the carrying amount of the investment.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognized amount of any non-controlling interests in the acquiree; and if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net fair value of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss. Any contingent consideration payable is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration recognized as a liability are recognized in profit or loss.
Costs related to the acquisition are expensed as incurred.
50.1.2. Discontinued operations
A discontinued operation is a component of the Group\u2019s business, the operations and cash flows which can be clearly distinguished from the rest of the Group and which:
represents a separate major line of business or geographic area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when an operation meets the criteria to be reclassified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation has been discontinued from the start of the comparative year.
50.1.3 Measurement of non-controlling interests
Non-controlling interests are measured at their proportionate share of the acquirees identifiable net assets at the date of acquisition.
50.1.4 Subsidiaries
A subsidiary is an entity controlled by the Company. Control exists when the Company has the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
The financial statements of a subsidiary are included in the consolidated financial statements from the acquisition date until the date when the parent ceases to control the subsidiary.
50.1.5 Loss of control
On the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, any non-controlling inter-ests and the other components of equity related to the subsidiary. Any surplus or deficit arising on the loss of control is recognized in profit or loss. If the Group retains any interest in the previous subsidiary, then such interest is measured at fair value at the date that control is lost. Subsequently, it is accounted for as an equity-accounted inves-tee or as a financial asset depending on the level of influence retained.
50.1.6 Investments in associates
An associate is an entity in which the Company has significant influence and that is neither a subsidiary nor an inter-est in a joint venture. Significant influence is presumed to exist when the Company holds between 20% and 50% of the voting power of another entity. An investment in an associate is accounted for using the equity method from the date on which it becomes an associate and is recognized initially at cost. The cost of the investment includes transaction costs. On acquisition of the investment, any difference between the cost of the investment and the Company\u2019s share of the net fair value of the associate\u2019s identifiable assets and liabilities is accounted for as follows:
goodwill relating to an associate is included in the carrying amount of the investment;
any excess of the Company\u2019s share of the net fair value of the associate\u2019s identifiable assets and liabilities over the cost of the investment is included as income in the determination of the Company\u2019s share of the associate\u2019s profit or loss in the period in which the investment is acquired.
Elimination of unrealized profits and losses on transactions with associates
Profits and losses resulting from upstream and downstream transactions between the Company \u2013 included its consol-idated subsidiaries \u2013 and an associate must be eliminated to the extent of the Company\u2019s interest in the associate.
Upstream transactions are, for example, sales of assets from an associate to the Company. Downstream transactions are, for example, sales of assets from the Company to an associate.
When an investment ceases to be an associate
From the date when the Company ceases to have significant influence over an associate, it accounts for related invest-ment in accordance with IFRS 9 from that date. On the loss of significant influence, the Company measures at fair value any investment the Company retains in the former associate.
The Company recognizes in profit or loss any difference between:
the fair value of any retained investment and any proceeds from disposing of the (partial) interest in the associate; and
the carrying amount of the investment at the date when significant influence is lost.
Amounts recognized in OCI in relation to the associate or joint venture are accounted for on the same basis as would be required if the investee had disposed of the related assets and liabilities directly.
50.1.7 Transactions eliminated on consolidation
Intragroup balances and transactions, including income, expenses and dividends, are eliminated in full. Unrealized profits and losses resulting from intragroup transactions that are recognized in assets, such as inventory and fixed assets, are eliminated in full.
Unrealized gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group\u2019s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__105": { "value": "50.1 BASIS OF CONSOLIDATION
50.1.1 Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group (see note 50.1.4).
Control is the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Goodwill is not amortized but tested for impairment on an annual basis and whenever there is an indication that the cash-generating unit to which goodwill has been allocated may be impaired. The impairment testing process is described in the appropriate section of these policies. Goodwill is stated at cost less accumulated impairment losses. With respect to associates, the carrying amount of goodwill is included in the carrying amount of the investment.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognized amount of any non-controlling interests in the acquiree; and if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net fair value of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss. Any contingent consideration payable is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration recognized as a liability are recognized in profit or loss.
Costs related to the acquisition are expensed as incurred.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__106": { "value": "50.1 BASIS OF CONSOLIDATION
50.1.1 Business combinations
Business combinations are accounted for using the acquisition method as at the acquisition date, which is the date on which control is transferred to the Group (see note 50.1.4).
Control is the power over the entity, i.e. the right that gives the Company the ability to direct the relevant activities of related entity, and is exposed to or has rights to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity.
Goodwill is not amortized but tested for impairment on an annual basis and whenever there is an indication that the cash-generating unit to which goodwill has been allocated may be impaired. The impairment testing process is described in the appropriate section of these policies. Goodwill is stated at cost less accumulated impairment losses. With respect to associates, the carrying amount of goodwill is included in the carrying amount of the investment.
The Group measures goodwill at the acquisition date as:
the fair value of the consideration transferred; plus
the recognized amount of any non-controlling interests in the acquiree; and if the business combination is achieved in stages, the fair value of the existing equity interest in the acquiree; less
the net fair value of the identifiable assets acquired and liabilities assumed.
When the excess is negative, a bargain purchase gain is recognized immediately in profit or loss. Any contingent consideration payable is recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration recognized as a liability are recognized in profit or loss.
Costs related to the acquisition are expensed as incurred.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__107": { "value": "50.1.2. Discontinued operations
A discontinued operation is a component of the Group\u2019s business, the operations and cash flows which can be clearly distinguished from the rest of the Group and which:
represents a separate major line of business or geographic area of operations;
is part of a single co-ordinated plan to dispose of a separate major line of business or geographic area of operations; or
is a subsidiary acquired exclusively with a view to resale.
Classification as a discontinued operation occurs at the earlier of disposal or when an operation meets the criteria to be reclassified as held-for-sale.
When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation has been discontinued from the start of the comparative year.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscontinuedOperationsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__108": { "value": "50.2 FOREIGN CURRENCY
Items included in the financial statements of each of the Company\u2019s entities are measured using the currency of the primary economic environment in which the entity operates (\u2018the functional currency\u2019). The consolidated financial statements are presented in euro, which is the Company\u2019s functional and presentation currency.
50.2.1 Foreign currency transactions
All transactions in currencies other than the functional currency are foreign currency transactions. Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the trans-actions. Foreign currency gains and losses resulting from the settlement of such transactions and from the translation at closing rates of monetary assets and liabilities denominated in foreign currencies are recognized in profit or loss. However, foreign currency differences arising from the translation of the following items are recognized in OCI:
an investment in equity securities designated as at FVOCI (except on impairment, in which case foreign currency differences that have been recognized in OCI are reclassified to profit or loss);
qualifying cash flow hedges to the extent that the hedges are effective.
Non-monetary assets and liabilities measured at historical cost that are denominated in foreign currencies are trans-lated using the exchange rate at the date of the transaction.
50.2.2 Foreign operations
A foreign operation is an entity that is a subsidiary, associate, joint venture or branch of the Company, of which the activities are based or conducted in a currency other than the euro.
The financial statements of foreign operations are translated for the purpose of the consolidation as follows:
assets and liabilities are translated at the closing rate;
income and expenses are translated at average year-to-date exchange rates; and
equity components are translated at historical rates, excluding current year movements, which are translated at rates approximating the rate at the time of the transaction.
All resulting exchange differences are recognized in other comprehensive income and accumulated in a separate component of equity being translation reserve. The amount attributable to any non-controlling interests is allocated to and recognized as part of non-controlling interests.
On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognized in other comprehensive income and accumulated in the separate component of equity, is reclassified from equity to profit or loss when the gain or loss on disposal is recognized.
On the partial disposal of a subsidiary that includes a foreign operation, the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income is re-attributed to non-controlling interests in that foreign operation. Any other partial disposal of a foreign operation \u2013 related to an associate, joint venture or branch of the Company \u2013 results in a reclassification to profit or loss of the proportionate share of the cumulative amount of the exchange differences recognized in other comprehensive income.
A partial disposal of an entity\u2019s interest in a foreign operation is any reduction in an entity\u2019s ownership interest in a foreign operation, except for those reductions resulting in:
the loss of control of a subsidiary;
the loss of significant influence over an associate;
the loss of joint control over a joint arrangement.
These reductions are accounted for as disposals resulting in a reclassification from other comprehensive income to profit or loss of the cumulative amount of the exchange differences relating to that foreign operation.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__109": { "value": "50.2 FOREIGN CURRENCY
Items included in the financial statements of each of the Company\u2019s entities are measured using the currency of the primary economic environment in which the entity operates (\u2018the functional currency\u2019). The consolidated financial statements are presented in euro, which is the Company\u2019s functional and presentation currency.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__110-1": { "value": "50.3 REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue from contracts with customers is recognized according to the criteria set in IFRS 15 Revenue from contracts with customers. In recognizing revenue from contracts with customers a five-step approach is to be applied: first the contract with the customer should be identified; then the distinct performance obligations in the contract should be identified; as a third step the transaction price should be determined; then the transaction price should be allocated to the distinct performance obligations in the contract; and finally revenue is recognized when the distinct perfor-mance obligation is satisfied. The standard moreover specifies whether revenue should be recognized at a certain point in time or over a period of time.
Revenue is recorded net of sales taxes, customer discounts and rebates.
The Group\u2019s policy distinguishes revenue from the sale of goods, the rendering of services and multiple-element arrangements.
Revenue from the sale of goods comprises revenue from the sale of consumables, chemicals, spare parts, standalone equipment and software licenses. Revenue from the rendering of services includes installation services, maintenance and post-contract support services. The Group also enters into arrangements combining multiple deliverables such as software, hardware/equipment and services, including training, maintenance and post-contract customer support, the \u2018multiple-element arrangements.\u2019 Freight charged to customers is recognized as revenue as incurred.
A. Sale of goods
Revenue from the sale of goods is recognized when the customer obtains control of the goods and when it is probable that the agreed transaction price will be collected. In evaluating whether collectability is probable, the entity consid-ers the customer\u2019s ability and intention to pay that amount when it is due. Revenue from the sale of goods is, under IFRS 15, recognized upon delivery following applicable freight terms, at a point in time.
Revenue from the sale of stand-alone software licenses is recognized at a point in time, at the delivery of the source key. The license is recognized at a point in time as the Group provides the customer access to and a right to use the intellectual property as it exists at a point in time.
In case volume discounts incentives are offered to the customer, the expected volume rebates are estimated based on historical experience. The amount of the variable consideration is made based on the most likely amount-method. The variable consideration is recognized only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue will not occur.
B. Rendering of services
Under the IFRS 15 standard, revenue from maintenance contracts is recognized straight-line over the maintenance period as the customer simultaneously receives and consumes the benefits from the maintenance over time.
Revenue from installation and implementation services are recognized as rendered. The progress is measured based on input methods being the labor hours expended to date versus the estimated hours spend.
When in a service contract multiple services are offered, the total consideration is allocated to all services based on their stand-alone selling price.
C. Multiple-element arrangements
Multiple-element arrangements offer the customer a combination of several deliverables such as software, licenses, hardware, implementation services and maintenance and post-contract support services. For arrangements not requiring substantive customization of the software, each of aforementioned deliverables is assumed to qualify as a separate performance obligation.
The total arrangement fee is allocated to the distinct performance obligations based on the stand-alone selling prices of the performance obligations. In case discounts are offered, a proportionate amount is allocated proportionally to each performance obligation based on their stand-alone selling price.
Within the HealthCare IT and Radiology Solutions business segments, most arrangements do not require significant customization or modification.
Revenue allocated to the hardware portion of the arrangement is recognized on delivery when it creates value to the customer on a stand-alone basis. Hardware is considered as a distinct performance obligation as there is no trans-formative relationship between the hardware and other components of the contract.
Revenue allocated to the software component is recognized after successful installation and acceptation at the client\u2019s premises. The software license is a distinct performance obligation as the customer can benefit from the license with readily available resources. The license is recognized at a point in time as the Group provides the customer access to and a right to use the intellectual property as it exists at a point in time.
Revenue from installation and implementation services are recognized as rendered. The progress is measured based on input methods being the labor hours expensed to date versus the estimated hours spend.
Extended warranty whereby the customer purchases additional warranty separately, i.e. warranty that is adding additional services on top of the legal warranty or for a longer period than legal warranty, is considered as a distinct performance obligation within multiple-element arrangements.
Revenue recognized for which no billing has yet occurred is recognized in the statement of financial position as contract assets and advance payments received for which no revenue has been recognized is presented as contract liabilities.
Within the HealthCare IT segment, the Group also offers \u2018Software as a Service\u2019 arrangements, whereby products and services including own IP and other services are offered through cloud computing under a subscription model on a pay-per-use model. Agfa offers a right to access the software as it exists throughout the license period. The cloud component is a service towards the customer who can access the software on an as-needed basis over the internet or a dedicated line. Revenue is recognized over time based on a pay-per-use schedule.
Within the Digital Print and Chemicals divisions, revenue from sale of equipment that require substantive installation activities is recognized when the installation of the equipment is finalized in accordance with the contractually agreed specifications. Installation services and equipment are considered highly interrelated and are identified as one performance obligation that is recognized at a point in time, i.e. at installation at the client\u2019s premises. Revenue from the sale of smaller equipment not requiring substantive installation activities is recognized when the customer obtains control of the goods.
50.20 Contract liabilities
The Group applies IFRS 15 Revenue from contracts with customers, that introduced the concept of contract assets and contract liabilities.
Contract liabilities comprise deferred revenue and advance payments received from customers as well as accruals for bonuses and rebates related to goods and services purchased by customers during the period.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__111": { "value": "In case volume discounts incentives are offered to the customer, the expected volume rebates are estimated based on historical experience. The amount of the variable consideration is made based on the most likely amount-method. The variable consideration is recognized only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue will not occur.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscountsAndRebatesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__112": { "value": "50.4 EMPLOYEE BENEFITS
For the accounting treatment of post-employment plans, IFRS distinguishes defined contribution plans and defined benefit plans. The classification depends on which party \u2013 Company or employee \u2013 bears the actuarial and invest-ment risk. In case of a defined contribution plan, the employee bears all the risks and therefore the Company does not recognize a liability in its statement of financial position except for any unpaid contribution. In case of a defined benefit plan, the Company bears the actuarial and investment risk and should consequently recognize a liability in its statement of financial position.
50.4.1 Defined contribution plans
Contributions to defined contribution pension plans are recognized as an expense in profit or loss as incurred.
They are allocated among functional costs: cost of sales, research and development expenses, selling and administra-tive expenses, following the functional area of the corresponding profit and cost centers to which related employees are attributed.
50.4.2 Defined benefit plans
As from December 31, 2016, the accounting treatment for Belgian defined contribution plans with return guaranteed by law has been aligned with the accounting treatment of defined benefit plans.
A. Liabilities for post-employment benefits
For defined benefit plans, the amount recognized in the statement of financial position is determined as the present value of the defined benefit obligation less the fair value of any plan assets. Where the calculation results in a net surplus, the recognized asset does not exceed the present value of any economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.
The present value of the defined benefit obligations (DBO) and the service costs are calculated by a qualified actuary using the Projected Unit Credit (PUC) method. Under this method projected benefits that are payable each future year are discounted to the reporting date at the assumed interest rate. The resulting total benefit obligation is then allocated to past service, presenting the DBO and year-in-service, presenting the service cost. The assumed interest rate is the discount rate based on yields at reporting date on high-quality corporate bonds that have maturity dates approximating the terms of the Group\u2019s obligations. In determining the net present value of the future benefit entitle-ment for service already rendered (DBO), the Group considers future compensation and benefit increases.
The DBO also comprises the present value from the effects of taxes payable by the plan on contributions or benefits relating to services already rendered.
More information about the application of the PUC method for Belgian defined contribution plans can be found hereafter.
B. Defined benefit cost recognized in profit or loss and other comprehensive income
The amount charged to profit or loss consists of current service cost, past service cost, gain or loss on settlement, net interest cost and administrative expenses and taxes. Current service costs as well as administrative expenses and taxes, which are borne by the employer(s) participating to the plan, are allocated among functional costs: cost of sales, research and development expenses, selling and general administrative expenses, following the functional area of the corresponding profit and cost centers to which related employees are attributed. Past service cost and settle-ment gains (losses) are recognized immediately in profit or loss under Other operating income or Other operating expense when the plan amendment, curtailment or settlement occurs. Administrative expenses which are related to the management of plan assets and taxes directly linked to the return on plan assets \u2013 borne by the plan itself \u2013 are included in the return on plan assets and are recognized in Other comprehensive income, net of income taxes (OCI).
Net interest cost is recognized in profit or loss under other finance expense. It is calculated by applying the discount rate used to measure the defined benefit obligation to the net defined benefit liability. The net interest cost is broken down into interest income on plan assets and interest cost on the defined benefit obligation. The difference between the return on plan assets and the interest income on plan assets is included in line item 'Net amount of remeasure-ments of the net defined benefit liability recorded in equity' and recognized in Other comprehensive income, net of income taxes. Next to the difference between the actual return and the interest income on plan assets, the line item \u2018Net amount of remeasurements of the net defined benefit liability recorded in equity\u2019 also comprises actuarial gains and losses resulting for example from an adjustment of the discount rate.
C. Defined contribution plans with return guaranteed by law
Belgian defined contribution plans are subject to the Occupational Pensions Act of April 2003. According to article 24 of this Act, affiliated persons are entitled to a guaranteed minimum return on contributions made by either the organizer of the plan or the employee. Some conditions in this law, such as the required level of minimum return, have been amended by the Act of December 18, 2015. Similar to the measurement of all other defined benefit plans, the net pension liability related to defined contribution plans with return guaranteed by law is calculated as the dif-ference between the present value of the defined benefit obligation (DBO) and the fair value of the plan assets. As of December 31, 2016, the present value of the defined benefit obligation (DBO) and the service costs are calculated by a qualified actuary using the Projected Unit Credit (PUC) method. More information on the general principles of this method can be found under liabilities for post-employment benefits.
Within the Belgian Agfa-Gevaert Group entities, all insured plans guarantee a fixed return up to the retirement age (so-called Branch 21 insured products). Depending on the nature of the insured contract, the DBO has been deter-mined with or without future contributions and their related minimum returns up to the retirement age or exit. For the Top Performance Plan no future contributions were considered, for all other \u2018Branch 21\u2019 insured products recur-ring contributions are paid and therefore considered in the actuarial calculation.
Similar to the Belgian DC-plans, the Group\u2019s Swiss DC-plans are accounted for as DB-plans under IAS 19.
In measuring the plan assets of the Swiss DC-plans, we apply paragraph 115 of IAS19. Paragraph 115 of IAS19 applies to the valuation of the pension plan assets where the liabilities are backed by insurance contracts that match the amount and timing of some or all the benefits payable under the plan. In such situations the value of the insurance contracts is set equal to the present value of the related liabilities (valued on the IAS19 assumptions, and in particular the IAS19 discount rate is used in calculating the present value of the future benefit payments).
For Belgian plans, the plan assets of the Fabriekspensioen are valued at the fair value of the pension fund's assets as of the calculation date. For all other plans, the valuation of plan assets follows the so-called \"\u00a7113\" methodology, in accordance with paragraph 113 of the IAS19 standard. This approach determines the fair value of plan assets as the present value of insured benefits provided by insurers. These insured benefits are based on the interest guarantees offered by insurers on past contributions, valid until the contract's maturity. The present value calcu-lation employs a discount rate derived from single A-rated financial bonds, reflecting the associated risk with the insurers. As of year-end 2024, this rate is established at 3.75%, which is 0.40% above the rate used for calculating the Defined Benefit Obligation.
50.4.3 Termination benefits
Termination benefits are recognized as a liability and an expense when a Group company is demonstrably committed to either:
terminate the employment of an employee or group of employees before the normal retirement date; or
provide termination benefits as a result of an offer made in order to encourage voluntary redundancy and to the extent it is probable that the employees will accept the offer.
Where termination benefits fall due more than twelve months after the reporting date, they are discounted using a discount rate which is the yield at reporting date on high quality corporate bonds that have maturity dates approxi-mating the terms of the Group\u2019s obligations.
The interest impact of unwinding and re-measuring long-term termination benefits at adjusted discount rates at financial reporting date is reflected in profit or loss under \u2018Other finance expense\u2019 whereas the impact of increases and decreases of the Group\u2019s commitments are presented under \u2018Other operating expenses \u2013 Restructuring expenses\u2019.
50.4.4 Other long-term employee benefits
The Group\u2019s net obligation in respect of long-term employee benefits, other than pension plans, post-employment life insurance and medical care, is the amount of future benefit that employees have earned in return for their service in current and prior periods. The obligation is calculated using the Projected Unit Credit method and is discounted to its present value and the fair value of any related assets is deducted. The discount rate used is the yield at reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Group\u2019s obligations.
Unlike the accounting treatment of post-employment defined benefit plans, remeasurements of other long-term employee benefits are not reflected in other comprehensive income. Instead, the impact of remeasurements is recog-nized in profit or loss.
50.4.5 Current employee benefits
Current employee benefit obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognized for the amount expected to be paid within twelve months if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.
50.4.6 Share-based payment transactions
The Group has granted a long-term variable compensation embedded in a cash-settled share-based payment plan to its CEO and key personnel members of the Group. This plan can result in an additional cash bonus.
Related share appreciation rights do not vest until the eligible persons have completed a specified period of service. Therefore, the Company recognizes the services received, and a liability to pay for them, as the eligible person renders service during that period. The liability is measured, initially and at the end of each reporting period until
settled, at the fair value of the share appreciation rights, by applying an option pricing model, and the extent to which the employees have rendered service to date. Changes in fair value are recognized in profit or loss. Both the cost recognized at initial measurement as well as the impact of changes in fair value are considered as employee benefit expenses. Black-Scholes is the applied option pricing model.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__113": { "value": "50.4.3 Termination benefits
Termination benefits are recognized as a liability and an expense when a Group company is demonstrably committed to either:
terminate the employment of an employee or group of employees before the normal retirement date; or
provide termination benefits as a result of an offer made in order to encourage voluntary redundancy and to the extent it is probable that the employees will accept the offer.
Where termination benefits fall due more than twelve months after the reporting date, they are discounted using a discount rate which is the yield at reporting date on high quality corporate bonds that have maturity dates approxi-mating the terms of the Group\u2019s obligations.
The interest impact of unwinding and re-measuring long-term termination benefits at adjusted discount rates at financial reporting date is reflected in profit or loss under \u2018Other finance expense\u2019 whereas the impact of increases and decreases of the Group\u2019s commitments are presented under \u2018Other operating expenses \u2013 Restructuring expenses\u2019.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTerminationBenefits", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__114": { "value": "50.4.6 Share-based payment transactions
The Group has granted a long-term variable compensation embedded in a cash-settled share-based payment plan to its CEO and key personnel members of the Group. This plan can result in an additional cash bonus.
Related share appreciation rights do not vest until the eligible persons have completed a specified period of service. Therefore, the Company recognizes the services received, and a liability to pay for them, as the eligible person renders service during that period. The liability is measured, initially and at the end of each reporting period until
settled, at the fair value of the share appreciation rights, by applying an option pricing model, and the extent to which the employees have rendered service to date. Changes in fair value are recognized in profit or loss. Both the cost recognized at initial measurement as well as the impact of changes in fair value are considered as employee benefit expenses. Black-Scholes is the applied option pricing model.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__115": { "value": "50.5 RESEARCH AND DEVELOPMENT EXPENSES
For accounting purposes, research expenses are defined as costs incurred for current or planned investigations undertaken with the prospect of gaining new scientific or technical knowledge and understanding. Development expenses are defined as costs incurred for the application of research findings or specialist knowledge to plans or designs for the production, provision or development of new or substantially improved products, services or pro-cesses, respectively, prior to the commencement of commercial production or use.
Research and development expenses are incurred in the Agfa-Gevaert Group for in-house research and development activities as well as numerous research and development collaborations and alliances with third parties.
Research and development expenses include, in particular, the running costs of the research and development departments such as personnel expenses, material costs and depreciation of fixed assets as well as the costs of laboratories, costs of applications development facilities, engineering departments and other departments carrying out research and development tasks, costs of contacts with universities and scientific institutes including expenses incurred for commissioned research and development work.
Research costs cannot be capitalized. The conditions for capitalization of development costs are strictly defined: an intangible asset must be recognized if, and only if, there is reasonable certainty on the technical feasibility of com-pleting the asset so that it will be available for use or sale, on the entity\u2019s intention to complete the intangible asset, on the ability to use or sell the asset, on how the entity will generate probable future economic benefits, on the availabil-ity of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset, on the ability to measure reliably the expenditure of the intangible asset during its development.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__116": { "value": "50.6 NET FINANCE COSTS
Interest income (expense) \u2013 net comprises interests receivable/payable in relation to items of the net financial debt position.
Net financial debt is defined as current and non-current loans and borrowings and lease liabilities less cash and cash equivalents.
Other finance income (expense) \u2013 net comprises:
interest received/paid on other assets and liabilities not part of the net financial debt position such as the net inter-est cost of defined benefit plans and the interest component of long-term termination benefits;
exchange results on non-operating activities;
changes in the fair value of derivative instruments economically hedging non-operating activities;
the ineffective portion of cash flow hedges hedging non-operating activities;
impairment losses recognized on financial assets;
results on the sale of marketable securities;
change in contingent consideration from a business combination; and
other finance income (expense).
Interest income is recognized in profit or loss as it accrues, taking into account the effective yield on the asset. Divi-dend income is recognized in profit or loss on the date that the dividend is declared.
All interest and other costs incurred in connection with borrowings are expensed as incurred using the effective inter-est rate. The interest expense component of lease payments is recognized in profit or loss using the effective interest rate method.
The net interest cost of defined benefit plans is determined by multiplying the net defined benefit liability by the discount rate that is used to measure the defined benefit obligation, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability during the period as a result of contributions and benefit payments.
The interest component of long-term termination benefits comprises the impact of unwinding the liability as well as the impact of the changed discount rate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceIncomeAndCostsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__117": { "value": "50.6 NET FINANCE COSTS
Interest income (expense) \u2013 net comprises interests receivable/payable in relation to items of the net financial debt position.
Net financial debt is defined as current and non-current loans and borrowings and lease liabilities less cash and cash equivalents.
Other finance income (expense) \u2013 net comprises:
interest received/paid on other assets and liabilities not part of the net financial debt position such as the net inter-est cost of defined benefit plans and the interest component of long-term termination benefits;
exchange results on non-operating activities;
changes in the fair value of derivative instruments economically hedging non-operating activities;
the ineffective portion of cash flow hedges hedging non-operating activities;
impairment losses recognized on financial assets;
results on the sale of marketable securities;
change in contingent consideration from a business combination; and
other finance income (expense).
Interest income is recognized in profit or loss as it accrues, taking into account the effective yield on the asset. Divi-dend income is recognized in profit or loss on the date that the dividend is declared.
All interest and other costs incurred in connection with borrowings are expensed as incurred using the effective inter-est rate. The interest expense component of lease payments is recognized in profit or loss using the effective interest rate method.
The net interest cost of defined benefit plans is determined by multiplying the net defined benefit liability by the discount rate that is used to measure the defined benefit obligation, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability during the period as a result of contributions and benefit payments.
The interest component of long-term termination benefits comprises the impact of unwinding the liability as well as the impact of the changed discount rate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinanceCostsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__118": { "value": "50.6 NET FINANCE COSTS
Interest income (expense) \u2013 net comprises interests receivable/payable in relation to items of the net financial debt position.
Net financial debt is defined as current and non-current loans and borrowings and lease liabilities less cash and cash equivalents.
Other finance income (expense) \u2013 net comprises:
interest received/paid on other assets and liabilities not part of the net financial debt position such as the net inter-est cost of defined benefit plans and the interest component of long-term termination benefits;
exchange results on non-operating activities;
changes in the fair value of derivative instruments economically hedging non-operating activities;
the ineffective portion of cash flow hedges hedging non-operating activities;
impairment losses recognized on financial assets;
results on the sale of marketable securities;
change in contingent consideration from a business combination; and
other finance income (expense).
Interest income is recognized in profit or loss as it accrues, taking into account the effective yield on the asset. Divi-dend income is recognized in profit or loss on the date that the dividend is declared.
All interest and other costs incurred in connection with borrowings are expensed as incurred using the effective inter-est rate. The interest expense component of lease payments is recognized in profit or loss using the effective interest rate method.
The net interest cost of defined benefit plans is determined by multiplying the net defined benefit liability by the discount rate that is used to measure the defined benefit obligation, both as determined at the start of the annual reporting period, taking account of any changes in the net defined benefit liability during the period as a result of contributions and benefit payments.
The interest component of long-term termination benefits comprises the impact of unwinding the liability as well as the impact of the changed discount rate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInterestIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__120": { "value": "50.7 INCOME TAX AND OTHER TAX
Income tax on the profit (loss) for the year comprises taxes paid or accrued and deferred tax expense (income). Income tax is recognized in profit or loss except to the extent that it relates to items recognized directly in other com-prehensive income, in which case it is recognized in other comprehensive income or if part of a business combination in which case it is recognized against goodwill.
In determining the amount of taxes paid or accrued and deferred tax expense (income), the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due.
Other tax receivables and liabilities relate to other tax, such as VAT, property tax and other indirect taxes. They are carried at cost. Both current and other tax receivables are offset against current tax liabilities, respectively other tax liabilities when they relate to taxes levied by the same taxation authority and are intended to be settled on a net basis and there is a legal right to offset.
50.7.1 Income taxes paid or accrued
Taxes paid or accrued are the expected tax payable on the taxable income for the year, using tax rates enacted or substantially enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Additional income taxes that arise from the distribution of dividends are recognized at the same time as the liability to pay the related dividend.
Current income tax for current and prior periods are, to the extent unpaid, recognized as a liability. If the amount already paid in respect of current and prior periods exceeds the amount due for those periods, the excess is recog-nized as an asset.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__119": { "value": "In determining the amount of taxes paid or accrued and deferred tax expense (income), the Company takes into account the impact of uncertain tax positions and whether additional taxes and interest may be due.
Other tax receivables and liabilities relate to other tax, such as VAT, property tax and other indirect taxes. They are carried at cost. Both current and other tax receivables are offset against current tax liabilities, respectively other tax liabilities when they relate to taxes levied by the same taxation authority and are intended to be settled on a net basis and there is a legal right to offset.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTaxesOtherThanIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__121": { "value": "50.7.2 Deferred tax
Deferred tax is calculated using the balance sheet method, providing for temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes.
The following temporary differences are not provided for:
taxable temporary differences on the initial recognition of goodwill;
the initial recognition of an asset or liability in a transaction which is not a business combination and at the time of the transaction, affects neither accounting profit nor taxable profit (tax loss); and
differences relating to investments in subsidiaries to the extent that they will probably not reverse in the foreseeable future.
The amount of deferred tax provided is based on the expected manner of realization or settlement of the carrying amount of assets and liabilities, using tax rates enacted or substantially enacted at the reporting date. A deferred tax asset is recognized only to the extent that it is probable that future taxable profits will be available against which the deductible temporary differences, unused tax losses and credits can be utilized. Deferred tax assets are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
Deferred tax assets and deferred tax liabilities are offset in the statement of financial position if the entity has a legal right to settle current tax amounts on a net basis and the deferred tax amounts are levied by the same taxing author-ity on the same entity that intend to realize the asset and settle the liability at the same time.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__122": { "value": "50.8 GOODWILL
Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carry-ing amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity-accounted investee as a whole.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__123": { "value": "50.8 GOODWILL
Goodwill is measured at cost less accumulated impairment losses. In respect of equity-accounted investees, the carry-ing amount of goodwill is included in the carrying amount of the investment, and any impairment loss is allocated to the carrying amount of the equity-accounted investee as a whole.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__124": { "value": "50.9 INTANGIBLE ASSETS WITH FINITE USEFUL LIVES
50.9.1 Recognition and measurement
Intangible assets with finite useful lives are stated at cost less accumulated amortization and impairment losses.
Research and development costs are expensed as they are incurred, except for certain development costs, which are capitalized when it is probable that a development project will be a success, and certain criteria, including technolog-ical and commercial feasibility, have been met. Capitalized development costs are amortized on a systematic basis over their expected useful lives.
In accordance with IFRS 3 Business combinations, if an intangible asset is acquired in a business combination, the cost of that intangible asset is its fair value at the acquisition date. The fair value of an intangible asset reflects market expectations about the probability that the future economic benefits embodied in the asset will flow to the entity.
50.9.2 Subsequent expenditure
Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure is recognized in profit or loss as incurred.
50.9.3 Amortization
Intangible assets with finite useful lives, such as acquired technology and customer relationships are amortized on a straight-line basis over their estimated useful lives, generally for periods ranging from five to 15 years. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__125-1": { "value": "50.9.3 Amortization
Intangible assets with finite useful lives, such as acquired technology and customer relationships are amortized on a straight-line basis over their estimated useful lives, generally for periods ranging from five to 15 years. Amortization methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
50.10.3\tDepreciation
Property, plant and equipment is depreciated on a straight-line basis over the estimated useful life of the item. For leased assets, the depreciation period is the estimated useful life of the asset, or the lease term if shorter.
The estimated useful lives of the respective asset categories are as follows:
Buildings | 20 to 50 years |
Outdoor infrastructure | 10 to 20 years |
Plant installations | 6 to 20 years |
Machinery and equipment | 6 to 12 years |
Laboratory and research facilities | 3 to 5 years |
Vehicles | 4 to 8 years |
Computer equipment | 3 to 5 years |
Furniture and fixtures | 4 to 10 years |
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
Assets classified as held for sale are no longer amortized or depreciated.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__127": { "value": "50.10 PROPERTY, PLANT AND EQUIPMENT
50.10.1 Recognition and measurement
Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses.
The cost of an item of property, plant and equipment comprises:
its purchase price, including import duties and non-refundable purchase taxes;
any costs directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management;
the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, the obligation for which the Company incurs either when the item is acquired or as a consequence of having used the item during a particular period for purposes other than to produce inventories during that period;
capitalized borrowing costs.
For self-constructed assets, directly attributable costs are direct cost of materials, direct manufacturing expenses, appropriate allocations of material and manufacturing overheads, and an appropriate share of the depreciation of assets used in construction. It includes the share of expenses for company pension plans and discretionary employee benefits that are attributable to construction and capitalized borrowing costs.
50.10.2\tSubsequent expenditure
Expenses for the repair and maintenance of property, plant and equipment are usually expensed as incurred. They are, however, capitalized when they increase the future economic benefits embodied in the item of property, plant and equipment.
50.10.3\tDepreciation
Property, plant and equipment is depreciated on a straight-line basis over the estimated useful life of the item. For leased assets, the depreciation period is the estimated useful life of the asset, or the lease term if shorter.
The estimated useful lives of the respective asset categories are as follows:
Buildings | 20 to 50 years |
Outdoor infrastructure | 10 to 20 years |
Plant installations | 6 to 20 years |
Machinery and equipment | 6 to 12 years |
Laboratory and research facilities | 3 to 5 years |
Vehicles | 4 to 8 years |
Computer equipment | 3 to 5 years |
Furniture and fixtures | 4 to 10 years |
Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__128": { "value": "50.11 NON-CURRENT ASSETS HELD FOR SALE
The Group classifies an asset (or disposal group) as held for sale if its carrying amount will be recovered principally through a sale transaction rather than through continuing use. For this to be the case, the asset (or disposal group) must be available for immediate sale in its present condition subject only to terms that are usual and customary for sale of such assets (or disposal groups) and its sale must be highly probable.
Immediately before classification as held for sale, the Group measures the carrying amount of the asset (or all the assets and liabilities in the disposal group) in accordance with applicable IFRS. Then, on initial classification as held for sale, assets and disposal groups are recognized at the lower of their carrying amounts and fair value less costs to sell. Impairment losses are recognized for any initial or subsequent write-down of the asset (or disposal group) to fair value less costs to sell. Assets classified as held for sale are no longer amortized or depreciated.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForNoncurrentAssetsOrDisposalGroupsClassifiedAsHeldForSaleExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__130": { "value": "50.12 FINANCIAL INSTRUMENTS
50.12.1 Financial assets
Financial assets comprise equity and debt instruments in another entity, cash and cash equivalents, loans receivable,
trade receivables, receivables under finance leases and other receivables as well as derivative financial instruments.
The Group initially recognizes loans and receivables on the date that they are originated. All other non-derivative financial assets are recognized on the trade date when the Group becomes a party to the contractual provisions of the instrument.
A trade receivable without significant financing is initially measured at its fair value plus any transaction costs that are directly attributable to the acquisition of the financial assets. Transaction costs related to financial assets and liability carried at fair value through profit and loss are recognized in the income statement.
The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the rights to receive the contractual cash flows on a financial asset in a transaction in which substan-tially all the risks and rewards of ownership of the financial asset are transferred. In a transaction where an entity neither transfers nor retains substantially all of the risks and rewards of ownership of a financial asset, the related asset is derecognized in case the entity lost control of the asset. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The Group has the following categories of non-derivative financial assets: financial assets at amortized cost and financial assets at fair value through other comprehensive income. Its classification reflects the business model in which the assets are managed and their cash flow characteristics.
A. Financial assets at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All the Group\u2019s receivables \u2013 trade receivables, receivables under finance leases as well as other receivables \u2013 and cash and cash equivalents fit into aforementioned definition and are consequently measured at amortized cost.
B. Financial assets at fair value through other comprehensive income (FVOCI)
A debt instrument is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contrac-tual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
The Group has made an irrevocable election for the investment in Digital Illustrate Inc. to classify it as FVOCI. The impact of subsequent measurement of this investment in equity securities is reflected in OCI under other reserves. This item in OCI will not be reclassified subsequently to profit or loss. The Group does not hold any other assets in this category.
50.12.2\tFinancial liabilities
Financial liabilities comprise uncommitted bank facilities, revolving and other credit facilities, trade and other paya-bles as well as derivative financial instruments.
Financial liabilities are recognized initially at fair value on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
At initial recognition, the Group measures its financial liabilities at its fair value less any transaction costs that are directly attributable to the issuance of the financial liability.
Non-derivative financial liabilities are subsequently measured at amortized cost except for financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies.
Interest-bearing loans and borrowings are stated at amortized cost with any difference between the initial amount and the maturity amount being recognized in profit or loss over the expected life of the instrument on an effective interest rate basis.
If a transfer of a financial asset does not result in derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received. In subsequent periods, the Group recog-nized any income on the transferred asset and any expense incurred on the financial liability.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, and retains control of the transferred asset, the entity continues to recognize the transferred asset to the extent of its continuing involvement and recognizes an associated liability. The extent of the Group\u2019s continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset.
The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the entity has retained. The associated liability is measured in such a way that the net carrying amount of the transferred asset and the associated liability is the amortized cost of the rights and obligations retained by the Group assuming the transferred asset is measured at amortized cost.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired. The Group also derecognizes a financial liability when the terms are modified and the cash flows of the modified lia-bility are substantially different, in which case a new financial liability based on modified terms is recognized at fair value. On derecognition of the financial liability, the difference between the carrying amount extinguished and the consideration paid is recognized in profit or loss.
50.12.3\tDerivative financial instruments and hedge accounting
The Group uses derivative financial instruments primarily to manage its exposure to foreign currency risks arising from operational, financing and investment activities.
The Group uses following types of derivative financial instruments: forward exchange contracts used for hedging, swap contracts used for hedging and other forward exchange contracts and swap contracts.
The Group uses forward exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to future sales and purchases.
Derivative financial instruments that are not designated as cash flow hedges are measured at fair value through profit or loss.
Derivative financial instruments are initially recognized at fair value on the date at which a derivative contract is entered into (trade date) and are subsequently re-measured at their fair value. In case cash flow hedge or net invest-ment hedge accounting is applied, the effective portion of any gain or loss is recognized in OCI, the non-effective portion in profit or loss. Transaction costs related to financial assets and liability carried at fair value through profit and loss are recognized in the income statement.
The Group has the following categories of derivative financial instruments: derivatives not formally designated as hedging instruments and cash flow hedging instruments.
A. Hedging instruments
The Group\u2019s forward exchange contracts and swap contracts, that are formally designated as cash flow hedging instruments, are subsequently re-measured at their fair value.
Cash flow hedge accounting is applied to all hedges that qualify for hedge accounting when required documentation of the hedging relationship is in place and when the hedge is determined to be effective. When hedge accounting is applied, the effective portion of any gain or loss is recognized in OCI, the non-effective portion in profit or loss.
With regard to hedge accounting, the Group applies the requirements of IFRS 9. This standard requires the Group to ensure that hedge accounting relationships are aligned with the Group\u2019s risk management objectives and strategy and to apply a more qualitative and forward looking approach to assessing hedge effectiveness. The Group uses forward exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to future sales. The Group currently designates only the change of the spot element of the forward exchange contract as the hedging instrument in cash flow hedging relationships. Under IFRS 9, the change in the fair value of the forward element (\u2018forward points\u2019) is accounted for as fair value through profit or loss and reflected in net finance costs.
The types of hedge accounting transactions that the Group currently designates meet the requirements of IFRS 9 and are aligned with the Group\u2019s risk management strategy and objectives.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is termi-nated or exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in hedge reserve remains in other comprehensive income until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-finan-cial item\u2019s initial cost or for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedge reserve are immediately reclassified to profit or loss.
B. Mandatory at FVTPL
Derivative financial instruments that are economic hedges but that do not meet the hedge accounting criteria of IFRS 9 are categorized as Mandatory at FVTPL and are accounted for as financial assets or liabilities at fair value through profit or loss. The impact in profit or loss is reflected in either other operating income and expense or net finance costs depending on the nature of the item economically hedged.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__131": { "value": "50.12.1 Financial assets
Financial assets comprise equity and debt instruments in another entity, cash and cash equivalents, loans receivable,
trade receivables, receivables under finance leases and other receivables as well as derivative financial instruments.
The Group initially recognizes loans and receivables on the date that they are originated. All other non-derivative financial assets are recognized on the trade date when the Group becomes a party to the contractual provisions of the instrument.
A trade receivable without significant financing is initially measured at its fair value plus any transaction costs that are directly attributable to the acquisition of the financial assets. Transaction costs related to financial assets and liability carried at fair value through profit and loss are recognized in the income statement.
The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the rights to receive the contractual cash flows on a financial asset in a transaction in which substan-tially all the risks and rewards of ownership of the financial asset are transferred. In a transaction where an entity neither transfers nor retains substantially all of the risks and rewards of ownership of a financial asset, the related asset is derecognized in case the entity lost control of the asset. Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.
The Group has the following categories of non-derivative financial assets: financial assets at amortized cost and financial assets at fair value through other comprehensive income. Its classification reflects the business model in which the assets are managed and their cash flow characteristics.
A. Financial assets at amortized cost
A financial asset is subsequently measured at amortized cost if it is held within a business model whose objective is to hold financial assets in order to collect contractual cash flows and the contractual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.
All the Group\u2019s receivables \u2013 trade receivables, receivables under finance leases as well as other receivables \u2013 and cash and cash equivalents fit into aforementioned definition and are consequently measured at amortized cost.
B. Financial assets at fair value through other comprehensive income (FVOCI)
A debt instrument is measured at fair value through other comprehensive income if it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets and the contrac-tual terms of the financial asset give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding. Interest income calculated using the effective interest method, foreign exchange gains and losses and impairment are recognized in profit or loss. Other net gains and losses are recognized in OCI. On derecognition, gains and losses accumulated in OCI are reclassified to profit or loss.
The Group has made an irrevocable election for the investment in Digital Illustrate Inc. to classify it as FVOCI. The impact of subsequent measurement of this investment in equity securities is reflected in OCI under other reserves. This item in OCI will not be reclassified subsequently to profit or loss. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__132": { "value": "The Group derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or when it transfers the rights to receive the contractual cash flows on a financial asset in a transaction in which substan-tially all the risks and rewards of ownership of the financial asset are transferred. ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__133": { "value": "Financial assets and liabilities are offset and the net amount presented in the statement of financial position when, and only when, the Group has a legal right to offset the amounts and intends either to settle on a net basis or to realize the asset and settle the liability simultaneously.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForOffsettingOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__134": { "value": "50.12.2\tFinancial liabilities
Financial liabilities comprise uncommitted bank facilities, revolving and other credit facilities, trade and other paya-bles as well as derivative financial instruments.
Financial liabilities are recognized initially at fair value on the trade date at which the Group becomes a party to the contractual provisions of the instrument.
At initial recognition, the Group measures its financial liabilities at its fair value less any transaction costs that are directly attributable to the issuance of the financial liability.
Non-derivative financial liabilities are subsequently measured at amortized cost except for financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition or when the continuing involvement approach applies.
Interest-bearing loans and borrowings are stated at amortized cost with any difference between the initial amount and the maturity amount being recognized in profit or loss over the expected life of the instrument on an effective interest rate basis.
If a transfer of a financial asset does not result in derecognition because the entity has retained substantially all the risks and rewards of ownership of the transferred asset, the Group continues to recognize the transferred asset in its entirety and recognizes a financial liability for the consideration received. In subsequent periods, the Group recog-nized any income on the transferred asset and any expense incurred on the financial liability.
If the Group neither transfers nor retains substantially all the risks and rewards of ownership of a transferred asset, and retains control of the transferred asset, the entity continues to recognize the transferred asset to the extent of its continuing involvement and recognizes an associated liability. The extent of the Group\u2019s continuing involvement in the transferred asset is the extent to which it is exposed to changes in the value of the transferred asset.
The transferred asset and the associated liability are measured on a basis that reflects the rights and obligations that the entity has retained. The associated liability is measured in such a way that the net carrying amount of the transferred asset and the associated liability is the amortized cost of the rights and obligations retained by the Group assuming the transferred asset is measured at amortized cost.
The Group derecognizes a financial liability when its contractual obligations are discharged, cancelled or expired. The Group also derecognizes a financial liability when the terms are modified and the cash flows of the modified lia-bility are substantially different, in which case a new financial liability based on modified terms is recognized at fair value. On derecognition of the financial liability, the difference between the carrying amount extinguished and the consideration paid is recognized in profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialLiabilitiesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__135": { "value": "A. Hedging instruments
The Group\u2019s forward exchange contracts and swap contracts, that are formally designated as cash flow hedging instruments, are subsequently re-measured at their fair value.
Cash flow hedge accounting is applied to all hedges that qualify for hedge accounting when required documentation of the hedging relationship is in place and when the hedge is determined to be effective. When hedge accounting is applied, the effective portion of any gain or loss is recognized in OCI, the non-effective portion in profit or loss.
With regard to hedge accounting, the Group applies the requirements of IFRS 9. This standard requires the Group to ensure that hedge accounting relationships are aligned with the Group\u2019s risk management objectives and strategy and to apply a more qualitative and forward looking approach to assessing hedge effectiveness. The Group uses forward exchange contracts to hedge the variability in cash flows arising from changes in foreign exchange rates relating to future sales. The Group currently designates only the change of the spot element of the forward exchange contract as the hedging instrument in cash flow hedging relationships. Under IFRS 9, the change in the fair value of the forward element (\u2018forward points\u2019) is accounted for as fair value through profit or loss and reflected in net finance costs.
The types of hedge accounting transactions that the Group currently designates meet the requirements of IFRS 9 and are aligned with the Group\u2019s risk management strategy and objectives.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is termi-nated or exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash flow hedges is discontinued, the amount that has been accumulated in hedge reserve remains in other comprehensive income until, for a hedge of a transaction resulting in the recognition of a non-financial item, it is included in the non-finan-cial item\u2019s initial cost or for other cash flow hedges, it is reclassified to profit or loss in the same period or periods as the hedged expected future cash flows affect profit or loss.
If the hedged future cash flows are no longer expected to occur, then the amounts that have been accumulated in the hedge reserve are immediately reclassified to profit or loss.
B. Mandatory at FVTPL
Derivative ", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForHedgingExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__136": { "value": "B. Mandatory at FVTPL
Derivative financial instruments that are economic hedges but that do not meet the hedge accounting criteria of IFRS 9 are categorized as Mandatory at FVTPL and are accounted for as financial assets or liabilities at fair value through profit or loss. The impact in profit or loss is reflected in either other operating income and expense or net finance costs depending on the nature of the item economically hedged.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__137": { "value": "50.13 IMPAIRMENT
50.13.1 Impairment testing of goodwill, intangible assets and property, plant and equipment
Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually and upon the occurrence of an indication of impairment.
The impairment tests are performed annually at the same time each year and at the cash-generating unit level.
The Group defines its cash-generating units based on the way that it monitors its goodwill and will derive economic benefit from the acquired goodwill and intangibles.
The impairment tests are performed by comparing the carrying value of the assets of these cash-generating units with their recoverable amount, based on their future projected cash flows discounted at an appropriate pre-tax rate of return.
The discount rate used in calculating the present value of the estimated future cash flows is based on a weighted
average cost of equity and debt capital (WACC). The WACC considers a debt-equity ratio of an average market partici-pant. The market beta is based on comparable peer companies and an additional risk premium was added to the cost of equity. The cost of debt is based on conditions on which comparable companies can obtain long-term financing.
An impairment loss is recognized whenever the carrying amount of the cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in profit or loss.
Consideration is given at each reporting date to determine whether there is any indication of impairment of the car-rying amounts of the Group\u2019s property, plant and equipment and intangible assets with finite useful lives.
If any such indication exists, the asset\u2019s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognized in profit or loss and the carrying amount of related asset is reduced through use of an allowance account.
The recoverable amount of the Group\u2019s property, plant and equipment and intangible assets with finite useful lives is the greater of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognized.
50.13.2\tImpairment testing for right-of-use assets
At each reporting date, the Group reviews the carrying amounts of its right-of-use assets to determine whether there is any indication of impairment. Indication of impairment exists when a lease concluded as a lessee becomes onerous in which case an impairment loss is recognized, measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.
50.13.3\tImpairment of financial assets and contract assets
With regard to impairment of trade receivables, lease receivables and contract assets, the Group applies the simplified approach for the impairment evaluation, which implies that credit losses for these categories of assets are always measured at an amount equal to lifetime expected credit losses. Credit losses are measured as the present value of all cash shortfalls \u2013 i.e. the difference between the cash flows to which the entity is entitled to and what the entity expects to receive. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
The inputs and assumptions to the expected credit loss model are the following: significant financial difficulty of the counterparty, a default of more than 90 days past due, a possible bankruptcy of the counterparty, \u2026
The evaluation of possible impairment takes into account forward-looking elements. For the major portion of the accounts receivable balances, debtors are scored and rated based on quantitative and qualitative information on an ongoing basis through Credit Risk Application in place. All customers are classified into different risk categories which are reassessed on a yearly basis based on relevant forward-looking information such as data from external credit bureaus, age of business, country risk and the credit manager\u2019s assessment. To mitigate the credit risk, credit insurance and other risk mitigation tools such as letter of credit, bank guarantees, mortgage are used within the Group.
This methodology of individually reviewing outstanding receivable amounts taking into account forward-looking information to assess impairment risks hasn\u2019t been changed due to the application of IFRS 9.
Loss allowances for financial assets measured at amortized cost are charged to profit or loss and deducted from the gross carrying amount of the assets to obtain a net presentation in the consolidated financial statements. For debt securities at FVOCI, the loss allowance is charged to profit or loss.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recov-ering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment for each type of financial asset based on whether there is a reasonable expectation of recovery. Financial assets that are written off are still subject to enforcement activities of the Group for recovery of amounts due.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__138": { "value": "50.13.1 Impairment testing of goodwill, intangible assets and property, plant and equipment
Goodwill and intangible assets with indefinite useful lives are tested for impairment at least annually and upon the occurrence of an indication of impairment.
The impairment tests are performed annually at the same time each year and at the cash-generating unit level.
The Group defines its cash-generating units based on the way that it monitors its goodwill and will derive economic benefit from the acquired goodwill and intangibles.
The impairment tests are performed by comparing the carrying value of the assets of these cash-generating units with their recoverable amount, based on their future projected cash flows discounted at an appropriate pre-tax rate of return.
The discount rate used in calculating the present value of the estimated future cash flows is based on a weighted
average cost of equity and debt capital (WACC). The WACC considers a debt-equity ratio of an average market partici-pant. The market beta is based on comparable peer companies and an additional risk premium was added to the cost of equity. The cost of debt is based on conditions on which comparable companies can obtain long-term financing.
An impairment loss is recognized whenever the carrying amount of the cash-generating unit exceeds its recoverable amount. Impairment losses are recognized in profit or loss.
Consideration is given at each reporting date to determine whether there is any indication of impairment of the car-rying amounts of the Group\u2019s property, plant and equipment and intangible assets with finite useful lives.
If any such indication exists, the asset\u2019s recoverable amount is estimated. An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Impairment losses are recognized in profit or loss and the carrying amount of related asset is reduced through use of an allowance account.
The recoverable amount of the Group\u2019s property, plant and equipment and intangible assets with finite useful lives is the greater of the fair value less costs to sell and value in use. In assessing value in use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset.
An impairment loss recognized in prior periods for an asset other than goodwill shall be reversed if, and only if, there has been a change in the estimates used to determine the asset\u2019s recoverable amount since the last impairment loss was recognized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__139": { "value": "50.13.2\tImpairment testing for right-of-use assets
At each reporting date, the Group reviews the carrying amounts of its right-of-use assets to determine whether there is any indication of impairment. Indication of impairment exists when a lease concluded as a lessee becomes onerous in which case an impairment loss is recognized, measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract.
An impairment loss is reversed only to the extent that the asset\u2019s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation, if no impairment loss had been recognized.
50.13.3\tImpairment of financial assets and contract assets
With regard to impairment of trade receivables, lease receivables and contract assets, the Group applies the simplified approach for the impairment evaluation, which implies that credit losses for these categories of assets are always measured at an amount equal to lifetime expected credit losses. Credit losses are measured as the present value of all cash shortfalls \u2013 i.e. the difference between the cash flows to which the entity is entitled to and what the entity expects to receive. A financial asset is credit impaired when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.
The inputs and assumptions to the expected credit loss model are the following: significant financial difficulty of the counterparty, a default of more than 90 days past due, a possible bankruptcy of the counterparty, \u2026
The evaluation of possible impairment takes into account forward-looking elements. For the major portion of the accounts receivable balances, debtors are scored and rated based on quantitative and qualitative information on an ongoing basis through Credit Risk Application in place. All customers are classified into different risk categories which are reassessed on a yearly basis based on relevant forward-looking information such as data from external credit bureaus, age of business, country risk and the credit manager\u2019s assessment. To mitigate the credit risk, credit insurance and other risk mitigation tools such as letter of credit, bank guarantees, mortgage are used within the Group.
This methodology of individually reviewing outstanding receivable amounts taking into account forward-looking information to assess impairment risks hasn\u2019t been changed due to the application of IFRS 9.
Loss allowances for financial assets measured at amortized cost are charged to profit or loss and deducted from the gross carrying amount of the assets to obtain a net presentation in the consolidated financial statements. For debt securities at FVOCI, the loss allowance is charged to profit or loss.
The gross carrying amount of a financial asset is written off when the Group has no reasonable expectations of recov-ering a financial asset in its entirety or a portion thereof. The Group individually makes an assessment for each type of financial asset based on whether there is a reasonable expectation of recovery. Financial assets that are written off are still subject to enforcement activities of the Group for recovery of amounts due.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__140": { "value": "50.14 LEASES
At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identified asset, the Group uses the definition of a lease in IFRS 16.
A. As a lessee
At commencement or on modification of a contract that contains a lease component, the Group allocates the considera-tion in the contract to each lease component on the basis of its relative stand-alone prices. The Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reflects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group\u2019s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group determines its incremental borrowing rate (IBR) twice a year based on the government bond yields per country and per maturity bucket obtained from Reuters and adds a risk premium reflecting the Group\u2019s risk profile. The latter risk premium differs from the country risk classified according to the Organization of Economic Cooperation and Development (OECD). Depending on the low, medium or high risk of the country a different spread is added. As such an IBR-matrix is obtained reflecting six maturity buckets and 50 countries.
Lease payments included in the measurement of the lease liability comprise the following:
fixed payments, including in-substance fixed payments;
variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the com-mencement date; and
the exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early.
There are no leases for which it is expected that the Group would need to pay a residual value guarantee.
The lease liability is measured at amortized cost using the effective interest method. It is re-measured when there is a change in future lease payments arising from a change in an index or rate if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance fixed lease payment. When the lease liability is re-measured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.
The Group has elected not to recognize right-of-use assets and lease liabilities for leases of low-value assets (mainly related to IT equipment) and short-term leases. Short-term leases are leases with a lease term of twelve months or less. The Group recognizes the lease payments associated with these leases as an expense on a straight-line basis over the lease term.
On the statement of financial position right-of-use assets are presented separately whereas lease liabilities are com-prised in \u2018Loans and borrowings.\u2019 All lease payments that are due within 12 months after the balance sheet date are classified as current liabilities. All lease payments that are due later than 12 months after the balance sheet date are classified as non-current liabilities.
B. As a lessor
When the Group acts as a lessor, it determines at lease inception whether each lease is a finance lease or an operating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a finance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset.
The majority of the Group\u2019s finance lease arrangements are concluded by Agfa Finance, i.e. Agfa Finance NV or its subsidiaries Agfa Finance Corp. and Agfa Finance Inc.
On manufacturing leases, the Group recognizes revenue and related profit margin at the moment a Group\u2019s manufac-turing organization or any related company invoices Agfa Finance at commencement of the lease with the external customer.
A commercial contract whereby a certain piece of equipment is financed by means of a medium or long-term agree-ment under which the customer commits to purchase a certain level of consumables at a mark-up price is called a \u2018bundle deal.\u2019 At each sale of consumables, the Group allocates the consideration received from this sale to a reduc-tion of the outstanding lease receivable and revenue from sale of goods on the basis of their stand-alone selling prices.
Receivables under finance leases are measured at an amount equal to the discounted future minimum lease pay-ments. Finance lease income \u2013 presented as part of \u2018Other operating income\u2019 \u2013 is subsequently recognized based on a pattern reflecting constant periodic rate of return on the net investment using the effective interest method.
On the statement of financial position receivables under finance leases are presented separately. All lease receivables that are due within 12 months after the balance sheet date are classified as current assets. All lease receivables that are due later than 12 months after the balance sheet date are classified as non-current assets.
The Group applies the derecognition and impairment requirements in IFRS 9 to the net investment in the lease.
The Group recognizes lease payments received under operating leases as revenue, on a straight line basis over the lease term.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__147": { "value": "50.16 INVENTORIES
Raw materials, supplies and goods purchased for resale are valued at purchase cost.
Work in progress and finished goods are valued at the cost of production. The cost of production comprises the direct cost of materials, direct manufacturing expenses, appropriate allocations of material and manufacturing overheads, and an appropriate share of the depreciation of assets used for production. It includes the share of expenses for company pension plans and discretionary employee benefits that are attributable to production. Administrative costs are included where they are attributable to production. Inventories are valued using the weighted-average cost method.
If the purchase or production cost is higher than the net realizable value, inventories are written down to net realizable value. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs necessary to make the sale. The cost of inventories may not be recoverable in following situations:
obsolete inventory: this is determined based on a list of non-moving or slow-moving inventory-items, including items approximating the expiry date;
damaged or expired inventory items or products showing quality problems;
declining selling prices.
Within the Group, write-downs of inventories mainly result from obsolescence.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__146": { "value": "50.17 CASH AND CASH EQUIVALENTS
Cash and cash equivalents comprise cash, checks received, and balances with banks and companies. Cash equivalents are highly liquid short-term financial investments that are subject to an insignificant risk of changes in value, are easily convertible into a known amount of cash and have a maturity of three months or less from the date of acquisition or investment.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__141": { "value": "50.18 SHARE CAPITAL
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares, net of any tax effects, are recognized as a deduction from retained earnings.
When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and presented as a deduction from total equity under the caption \u2018Reserve for own shares\u2019. Repur-chased shares are accounted for using settlement date accounting. Cancelled treasury shares are transferred from
\u2018Reserve for own shares\u2019 to \u2018Retained earnings\u2019. When treasury shares are sold, the amount received is recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within share premium.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__148": { "value": "When share capital recognized as equity is repurchased, the amount of the consideration paid, including directly attributable costs, net of any tax effects, is recognized as a deduction from equity. Repurchased shares are classified as treasury shares and presented as a deduction from total equity under the caption \u2018Reserve for own shares\u2019. Repur-chased shares are accounted for using settlement date accounting. Cancelled treasury shares are transferred from
\u2018Reserve for own shares\u2019 to \u2018Retained earnings\u2019. When treasury shares are sold, the amount received is recognized as an increase in equity and the resulting surplus or deficit on the transaction is presented within share premium.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__142": { "value": "50.19 PROVISIONS
Provisions are recognized in the statement of financial position when a Group company has a present obligation (legal or constructive) as a result of a past event and when it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
The amount recognized as a provision is the best estimate of the expenditure required to settle the present obligation at the reporting date.
If the effect is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current market assessments of the time value of money and, where appropriate, the risks specific to the liability.
50.19.1 Restructuring
A provision for restructuring is recognized when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced to those affected by it. Future operating costs are not provided for.
50.19.2 Environmental protection
In accordance with the Group\u2019s published environmental policy and applicable legal requirements, a provision for site restoration in respect of contaminated land is recognized when the land is contaminated.
50.19.3 Trade-related
Trade-related provisions mainly comprise provisions for sales commissions and warranty and commercial litiga-tions. A provision for product warranty is made at the time of revenue recognition and reflects the estimated costs of replacement that will be incurred by the Group.
50.19.4 Onerous contracts
A provision for onerous contracts is recognized when the expected benefits to be derived by the Group from a con-tract are lower than the unavoidable cost of meeting its obligations under the contract, which is determined based on the incremental cost of fulfilling the obligation under the contract and an allocation of other costs directly related to fulfilling the contract. Provisions are established for impending losses on purchase or sales contracts at the amount of the anticipated losses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__149": { "value": "50.19.2 Environmental protection
In accordance with the Group\u2019s published environmental policy and applicable legal requirements, a provision for site restoration in respect of contaminated land is recognized when the land is contaminated.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEnvironmentRelatedExpenseExplanatory", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__144": { "value": "Government grants are a typical example of unearned other operating income. They are recognized in profit or loss when there is a reasonable assurance that the conditions attached to the grants will be or are complied with and the grants will be received. Grants that compensate the Group for expenses incurred are recognized in profit or loss under the same functional reporting line item as the corresponding expenses. They are recognized as income over the periods necessary to match them on a systematic basis to the costs that are intended to be compensated. Grants awarded for the purchase or production of assets (Intangible assets or Property, plant and equipment) are recognized initially as other liability and then recognized in profit or loss as other income on a systematic basis over the useful life of the asset. Government grants for future expenses are recorded as other liabilities.", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants", "language": "en", "entity": "scheme:549300IHBDUTUNQJJB79", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "f0__s8__6__145": { "value": "51. NEW STANDARDS AND INTERPRETATIONS ISSUED BUT NOT YET EFFECTIVE
A number of new IFRS standards, amendments to IFRS standards and interpretations issued, were not yet effec-tive for the year ended on December 31, 2024 and have not been applied in preparing the consolidated financial statements.
The Group shall adopt these standards after endorsement by the European Union. It relates to:
Amendments to IAS 21 The Effects of Changes in Foreign Exchange Rates: Lack of Exchangeability
In August 2023, the IASB issued amendments to IAS 21 effective for annual reporting periods beginning on or after January 1, 2025 with early adoption permitted.
These amendments clarify when a currency is exchangeable into another currency (and when it is not). When a currency is not exchangeable, a company needs to estimate a spot rate. The company\u2019s objective when estimating a spot rate is that it reflects the rate at which an orderly exchange transaction would take place at the measurement date between market participants under prevailing economic conditions. The amendments contain no specific requirements for estimating a spot rate. Under the amendments, companies will need to provide new disclosures to help users assess the impact of using an estimated exchange rate on the financial statements. These amendments have been endorsed by the EU. The application of this amendment will not have a material impact to the consoli-dated financial statements of the Group.
Amendments to the Classification and Measurement of Financial Instruments \u2013 Amendments to IFRS 9\u00a0Financial Instruments\u00a0and IFRS 7\u00a0Financial Instruments: Disclosures
In May 2024, the International Accounting Standards Board (IASB) issued Amendments to the Classification and Measurement of Financial Instruments which amended IFRS 9 Financial Instrumentsand IFRS 7 Financial Instru-ments: Disclosures, effective for annual periods beginning on or after January 1, 2026. Early adoption is permitted.
The amendments clarify that financial assets and financial liabilities are recognized and derecognized at settle-ment date except for regular way purchases or sales of financial assets and financial liabilities meeting conditions for new exception. The new exception permits companies to elect to derecognize certain financial liabilities settled via electronic payment systems earlier than the settlement date.
They also provide guidelines to assess contractual cash flow characteristics of financial assets, which apply to all contingent cash flows, including those arising from environmental, social, and governance (ESG)-linked features.
The IASB also amended disclosure requirements relating to investments in equity instruments designated at fair value through other comprehensive income and added disclosure requirements for financial instruments with contingent features that do not relate directly to basic lending risks and costs.
These amendments have not yet been endorsed by the EU. The Group will apply these amendments after endorse-ment. The application of this amendment will not have a material impact to the consolidated financial statements of the Group.
Annual Improvements to IFRS Accounting Standards \u2013 Volume 11
In July 2024, the IASB issued narrow amendments to IFRS Accounting Standards and accompanying guidance as
part of its regular maintenance of the Standards, applicable for annual periods beginning on January 1, 2026 with early application permitted.
These amendments, published in a single document Annual Improvements to IFRS\u00a0Accounting Standards\u2014Volume 11, include clarifications, simplifications, corrections and changes aimed at improving the consistency of several IFRS Accounting Standards. It relates to:
IFRS 1\u00a0First-time Adoption of International Financial Reporting Standards;
IFRS 7\u00a0Financial Instruments: Disclosuresand its accompanying Guidance on implementing IFRS 7;
IFRS 9\u00a0Financial Instruments;
IFRS 10\u00a0Consolidated Financial Statements; and
IAS 7\u00a0Statement of Cash flows.
These amendments have not yet been endorsed by the EU. The Group will apply these amendments after endorse-ment. The application of this amendment will not have a material impact to the consolidated financial statements of the Group.
Contracts Referencing Nature-dependent Electricity \u2013 Amendments to IFRS 9 and IFRS 7
To allow companies to better reflect these contracts in the financial statements, the IASB has made targeted amendments to IFRS 9 Financial Instrumentsand IFRS 7Financial Instruments: Disclosures, applicable for annual periods beginning on or after January 1, 2026 with earlier application permitted.
Nature-dependent electricity contracts help companies to secure their electricity supply from sources such as wind and solar power, known as renewable power purchase agreements (PPA\u2019s). The amount of electricity generated under these contracts can vary based on uncontrollable factors such as weather conditions. Current accounting requirements may not adequately capture how these contracts affect a company\u2019s performance.
The amendments include:
clarifying the application of the \u2018own-use\u2019 exemption for purchasers of electricity under such PPA\u2019s;
hedge accounting requirements\u00a0for companies that hedge their purchases or sales of electricity using PPA\u2019s; and
adding new disclosure requirements to enable investors to understand the effect of these contracts on a compa-ny\u2019s financial performance and cash flows.
These amendments have not yet been endorsed by the EU. The Group will apply these amendments after endorse-ment. The application of this amendment will not have a material impact to the consolidated financial statements of the Group.
The Company has \u201con site\u201d a PPA (Power Purchase Agreement) regarding several solar panels. There is no fixed contract volume associated with this contract. A second power purchase agreement for a new installation of solar panels will be in place.
The term of the contract is 10 years (starting in 2021). This contract has been concluded in the framework of the obligation (in Belgium \u2013 Flanders) to install solar panels for buildings with high electricity consumption. By June 30, 2025, solar panels will be mandatory on buildings where electricity consumption exceeds 1 gigawatt hour per year (commonly known as PV (PhotoVoltaic)-obligation). According to IFRS, these contracts are accounted for as leases, i.e. right-of-use assets and lease liabilities.
IFRS 18\u00a0Presentation and Disclosure in Financial Statements
In April 2024, the International Accounting Standards Board (IASB) issued a new IFRS Accounting Standard to improve reporting of financial performance. IFRS 18 Presentation and Disclosure in Financial Statementsreplaces IAS 1 Presentation of Financial Statements, effective for annual reporting periods beginning on or after of January 1, 2027. Earlier application is permitted.
IFRS 18 replaces IAS 1, which sets out presentation and base disclosure requirements for financial statements. The changes stipulated in the new standard, which mostly affect the income statement, include the requirement to classify income and expenses into three new categories \u2013 operating, investing and financing \u2013 and present subtotals for operating profit or loss and profit or loss before financing and income taxes.
Further, operating expenses are presented directly on the face of the income statement \u2013 classified either by nature (e.g. employee compensation), by function (e.g. cost of sales) or using a mixed presentation. Expenses presented by function require more detailed disclosures about their nature.
IFRS 18 also provides enhanced guidance for aggregation and disaggregation of information in the financial statements, introduces new disclosure requirements for Management-defined Performance Measures (MPMs) and eliminates classification options for interest and dividends in the statement of cash flows.
This standard has not yet been endorsed by the EU. The Group will apply these amendments after endorsement. The application of this standard will have an impact on the presentation of the consolidated financial statements of the Group.
IFRS 19\u00a0Subsidiaries without Public Accountability: Disclosures
In May 2024, the IASB published IFRS 19 Subsidiaries without Public Accountability: Disclosures applicable for annual periods beginning on or after January 1, 2027. IFRS 19 is a voluntary standard that applies to entities without public accountability, but whose parents prepare consolidated financial statements under IFRS Accounting Standards.
This standard is not applicable to the Group. This standard has not yet been endorsed by the EU.