Azelis Group NV (the 'Company') is a publicly traded company listed on Euronext Brussels (ticker: AZE) and part of the BEL20 and BEL\u00ae ESG Index. The Company has its registered office and principal place of business at Posthofbrug 12 box 6, 2600 Antwerp, Belgium. Azelis Group NV is registered in Belgium under number 0769.555.240.
The Company acts as the parent company of the Azelis Group, a global group based in Belgium primarily involved in the distribution of specialty chemical products used in the Life Sciences (Personal Care, Home Care & Industrial Cleaning, Pharmaceuticals & Healthcare, Food & Nutrition, Animal Nutrition, and Agricultural & Environmental Solutions, and Flavors & Fragrances) and Industrial Chemicals industry (CASE, Advanced Materials & Additives, Lubricants & Metalworking Fluids, Electronics, Essentials and Fine Chemicals, and Textiles, Leather & Paper).
The consolidated financial statements of the Company for the period January 1, 2024 to December 31, 2024 cover the Company and its subsidiaries (together referred to as the 'Group' or as 'Azelis', being the trade name of the group) and the Group\u2019s interest in associates.
Azelis is well positioned to face challenges across the globe, on the basis of its diversified specialty chemicals portfolio, but also based on its asset-light business model. Azelis' cost base, other than payroll and some other predominantly fixed costs, is mostly variable. Azelis has multiple cost levers that can be activated to mitigate the impact of downturns, which enables it to react rapidly to slumps or economic crises and furthers the Group's resilience.
Due to its global footprint, Azelis is sensitive to economic and geopolitical uncertainty. The Group monitors closely the political events in Russia and Ukraine, Israel, Palestina and neighboring countries and supports its employees throughout the affected regions with a focus on employee safety.
The consolidated financial statements for the period ended December 31, 2024, were authorized for issue by the Board of Directors on March 4, 2025, and will be submitted for approval to the Shareholders' Meeting to be held on May 8, 2025.
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted in the European Union (IFRS). The Group has consistently applied the accounting policies as set out below to all periods presented in these consolidated financial statements. Changes to the accounting policies in the current year are limited to the changes in IFRS below and are applied starting on January 1, 2024.
The following standards and amendments to standards are mandatory for the first time in the financial year beginning January 1, 2024, and have been endorsed by the European Union:
Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current liabilities with covenants
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier Finance Arrangements
Amendments to IFRS 16 Leases - Lease Liability in Sale and Leaseback
Their adoption has not had any material impact on the amounts reported in these financial statements. The adoption of the amendments to IAS 7 and IFRS 7 resulted in increased disclosures for liabilities under supplier financing arrangements as well as the associated cash flows in the consolidated financial statements for the year ending December 31, 2024.
Certain new standards and amendments have been published but are not mandatory for reporting periods ended December 31, 2024, and have not yet been adopted by the Group. These standards and amendments are not expected to have a material impact on the financial statements of the Group in future reporting periods, except for the adoption of IFRS 18.
IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after January 1, 2027) will replace IAS 1 Presentation of Financial Statements, introducing new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of financial performance and providing management-defined performance measures within the financial statements. Management is currently assessing the implications of applying the new standard on the Group\u2019s consolidated financial statements.
This Integrated Report is required to be published in the European Single Electronic Format, as determined by and according to the requirements set out in the Commission Delegated Regulation (EU) 2019/815 of December 17, 2018, supplementing Directive 2004/109/EC. The PDF version of the Integrated Report is not ESEF-compliant and has been solely prepared for ease of use of readers. The Group's official reporting package in ESEF can be found on the Group's website.
With its application and formulating labs, the Company is well positioned to support its customers with many new formulations that are necessitated as a result of changing conditions. Azelis is helping its customers and its principals to respond to climate-changes, and to achieve their sustainability goals by, for example, promoting sustainable products and product development, encouraging sustainable formulation creation in its labs, and assessing its principals and implementing corporate social responsibility due diligence procedures when selecting and onboarding principals. Over the recent years, the Company has rapidly increased its percentage of revenue covered with ESG assessed suppliers.
Alongside sustainability, innovation and digitalization form the pillars of Azelis\u2019 strategy for creating value: investments in innovation centers, application and formulating labs, e-Labs, principal portals and customer portals are helping to accelerate the supply of sustainable products.
As a specialty chemicals distributor, the Company has an asset-light business model, outsourcing to the extent possible capital-intensive aspects such as logistics and warehouse operations. Next to outsourcing, it has a focus on leasing warehouses and offices and, as such, has a limited number of owned properties. Having limited impact capacity, the Company does undertake initiatives to reduce its climate impact where possible: reduction of carbon emissions (eg. electrification of company car fleet and warehouse fleet), reduction of energy consumption (eg. installation of solar panels, switching to LED light bulbs), reduction of water consumption, reduction of waste, etc.
As from December 2023, the Company has been included in Euronext\u2019s BEL\u00aeESG Index as one of the 20 listed companies in Belgium that demonstrate the best ESG practices. This recognizes Azelis\u2019 commitment to a sustainable future and is a testament to its leadership in sustainability. The BEL\u00aeESG Index identifies and tracks the 20 highest-ranking companies in Belgium that demonstrate the lowest environmental, social and governance (ESG) risks. It also serves investors as a reference to better identify those companies that focus on a more sustainable future by combining economic results with sustainability goals. Also, Morningstar Sustainalytics \u2013 a global leader in ESG research and data - grants Azelis the top industry ESG ranking.
In addition to the above, and supported by its asset-light business model, Azelis\u2019 revenue mix is very diversified across its end markets and geographies, across the number of principals and customers, and across its products. Therefore, there is limited concentration risk, also regarding any related climate risks. In 2024 the Company has finalized its physical climate risk assessment, concluding that the potential business consequence of this risk is limited as sufficient mitigation measures are in place. Refer to section E1 climate change in the sustainability statements for further detail on the Company's climate risk assessment.
In preparation of its consolidated financial statements, the Company has considered the impact of climate change mainly for the following areas where climate change generally is expected to have the largest impact:
Significant judgments, major sources of estimation uncertainty & accounting policies (refer to note 3): Climate change does not substantially impact the significant judgments made by the Company, nor its major sources of estimation uncertainty, specifically taking into account the Company\u2019s asset-light business model and its diversified revenue mix across markets, geographies, products, principals and customers.
Impairment of non-financial assets: In assessing the recoverable amounts to assess both the impairment of non-financial assets such as property, plant and equipment, right-of-use assets, intangible assets, as well as goodwill, the Company did not identify climate change related matters to have a significant impact, also driven by its portfolio diversification.
Useful lives of tangible and intangible assets: Any impact from climate change or climate-related initiatives undertaken by the Company does not have a significant impact on the useful lives of its assets. As an example, the Company is electrifying its company car and warehouse fleets but approaches this from a phase-out scenario for its fossil fuel vehicles.
Provisions: The Company is not significantly exposed to provisions or contingent liabilities arising from potential litigation, regulatory requirements to remediate environmental damage, additional levies or penalties related to environmental requirements as well as contracts that may become onerous, or restructurings to achieve climate-related targets, based on its asset-light business model and its diversification of supplier portfolio combined with the continuously increasing percentage of revenues covered by ESG assessed suppliers.
Sustainable finance: For the Term and Revolving Facilities agreement concluded in September 2024, sustainability adjustments may be included at the latest as from September 2025. For the progress of the Company's sustainability KPIs, refer to the Sustainability review of this Integrated Report.
Share-based payments: As described in note 11.3, one of the share-based payment plans' performance conditions relates to the Company\u2019s reduction of carbon emissions to be assessed over the vesting period of three years.
The financial period is the calendar year starting January 1, 2024 and ending December 31, 2024 (hereinafter '2024').
The comparative period is reflecting the financial performance of the Group starting January 1, 2023 and ending December 31, 2023 (hereinafter '2023').
The consolidated financial statements incorporate the financial statements of the Company and all entities controlled by the Company as at December 31, 2024. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
Subsidiaries are entities controlled by the Company. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has:
Power over the investee (i.e. existing rights to direct relevant activities)
Exposure, or rights, to variable returns from its involvement in the investee
The ability to use its power to affect the investee\u2019s returns
Generally, there is a presumption that having a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee.
Non-controlling interests in subsidiaries are identified separately from the Group\u2019s equity therein. The interests of non-controlling shareholders may be initially measured at fair value or at the non-controlling interests\u2019 proportionate share of the fair value of the acquiree\u2019s identifiable net assets. A choice of measurement is made on an acquisition-by-acquisition basis. For its current non-controlling interests in subsidiaries, the Group has opted to measure at the proportionate share of the acquiree's identifiable net assets. After acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction between shareholders.
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred for each acquisition is measured at the aggregate of the fair values on the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments.
The acquiree\u2019s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition on the balance sheet are recognized at their fair value on the acquisition date, except for deferred tax assets or liabilities, and liabilities and assets related to employee benefit arrangements.
The difference between the fair value of the consideration transferred and the fair value of the identified assets, liabilities and contingent consideration is recorded as goodwill. If the fair value of the net assets acquired exceeds the aggregate consideration transferred, this purchase bargain is included in the profit or loss, after the Group has re-assessed whether it has correctly identified all of the assets acquired and all of the liabilities assumed. Acquisition-related costs are recognized in profit or loss as incurred.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed on the acquisition date that, if known, would have affected the amounts recognized on that date. The measurement period to finalize the valuations is subject to a maximum of one year after the acquisition date.
Associates are entities over which the Group has significant influence, but no control. Significant influence is the power to participate in the financial and operating policy decisions of the investee.
Associates are accounted for under the equity method and are recognized initially at cost as adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate. The Group\u2019s investment includes goodwill on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group\u2019s share of the income and expense and the equity movements of the investments accounted within equity, after aligning the accounting policies to those of the Group, from the day significant influence commences until the day significant influence ceases. When the Group\u2019s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to zero, and no further losses are recognized except for losses arising from the Group\u2019s obligation or payments on behalf of the investee.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in other reserves within equity attributable to owners.
When the Group ceases to consolidate or equity-account for an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
The consolidated financial statements are presented in euros, which is the Group\u2019s presentation currency. The Group companies determine their functional currency based on the primary economic environment in which they operate. The main indicators to determine the functional currency is the currency of the sales, expenses and financing activities.
The Group operates in different currency environments, but mainly in EUR and USD. Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates on the date of the transaction. Monetary assets and liabilities denominated in foreign currency on the reporting date are translated to the functional currency of the entity at the exchange rate that date. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated to the functional currency of the entity at the exchange rate on the date that the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Foreign currency differences arising from this operational translation are recognized in the income statement.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from acquisition, are translated to euros at exchange rates on the reporting date. The income and expenses of foreign operations are translated to euros at average exchange rates.
Foreign currency differences are recognized in other comprehensive income and accumulated in equity. These differences have been recognized in the translation reserve. When the Group loses control over a foreign operation, the accumulated foreign translation amount of the subsidiary is transferred from equity to the profit or loss.
Foreign exchange gains and losses arising from a monetary item to be received from or paid to a foreign operation for which the settlement is neither planned nor likely to occur in the foreseeable future are included in the value of net investment in a foreign operation and recognized directly in equity in the translation reserve.
Non-monetary assets and liabilities, equity and the income statement of subsidiaries operating in hyperinflationary economies are restated for changes in the general purchasing power of the local currency applying a general price index. These re-measured amounts are used for conversion into the Group reporting currency at the period closing exchange rate. As a result, the balance sheet and net results of subsidiaries operating in hyperinflation economies are stated in terms of the measuring unit current at the end of the reporting period. In accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates, multinational companies that have subsidiaries with the hyperinflationary currency as their functional currency are not required to restate comparative amounts as those were presented previously in a stable currency.
Since 2022, the Group has applied hyperinflation accounting for its subsidiaries having their functional currency in Turkish lira. The relevant price index used for the restatement of the financial statements of Azelis' Turkish subsidiaries is the consumer price index (CPI) based on data of the Turkish Statistical Institute. The consumer price index and the exchange rate between euros and the Turkish lira have changed in 2023 and 2024 as follows:
| Year (31st December) | Turkey CPI | Change (%) | EUR/TRL exchange rate |
| 2023 | 18.59 | 64.77% | 32.69 |
| 2024 | 26.85 | 44.38% | 36.74 |
The carrying amounts of the Group\u2019s non-current non-financial assets are reviewed on each reporting date to determine whether there is any indication of impairment. If any such indication exists, the Group performs an impairment test. For goodwill and intangible assets with indefinite lives, an impairment test is performed every year.
The recoverable amount of an asset or cash-generating unit is the higher of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future pre-tax 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. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the 'cash-generating unit'). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to (groups of) cash-generating units that are expected to benefit from the synergies of the combination.
Corporate assets are assets that do not generate cash inflows independently, and their carrying amounts need to be allocated to the cash-generating units on a reasonable and consistent basis. If a corporate asset cannot be allocated to cash-generating units on a reasonable and consistent basis, the Group performs the goodwill impairment test in two stages: first on the level of the cash-generating units, and secondly on the level of the smallest group of cash-generating units to which the corporate asset can be allocated on a reasonable and consistent basis.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in the income statement. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis.
An impairment loss in respect of goodwill will not be reversed afterwards. In respect of other assets, impairment losses recognized in prior periods are assessed on each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. 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 or amortization, if no impairment loss had been recognized.
Goodwill is initially measured at cost, the excess of the aggregate of the consideration transferred and the amount recognized for the assets acquired and liabilities assumed in a business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. In the event of disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Research activity expenses, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in the income statement when incurred.
Development expenses for which the Group has the technical feasibility, intention and means to complete the intangible assets and the economic future benefits of the assets will flow to the Group are capitalized at cost.
Other intangible assets with finite useful lives are measured at cost, less accumulated amortization and accumulated impairment losses. Amortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date when the asset is ready for use. The estimated useful lives of intangible assets and their residual value (if applicable) are reviewed every year.
The estimated useful lives for the current and comparative period are as follows:
| Intangible assets | Economic lifetime |
|---|---|
| Trademarks and brands | Indefinite |
| Customer lists | 5 to 10 years |
| Distribution rights | 20 years |
| Other intangible assets | 3 to 7 years |
Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Components of property, plant and equipment with separate useful lives are accounted for as separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the net proceeds from disposal with the carrying amount of property, plant and equipment and are recognized in other income or other expenses in the income statement.
Depreciation is recognized in the income statement on a straight-line basis over the estimated useful lives of each component of property, plant and equipment to their residual values. Leasehold improvements are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.
The estimated useful lives for the current and comparative period are as follows:
| Property, plant and equipment | Economic lifetime |
|---|---|
| Buildings | 20 to 33 years |
| Plant and equipment | 5 to 10 years |
| Other property, plant and equipment | 5 to 10 years |
Depreciation methods, useful lives and residual values are reviewed on each reporting date.
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease liabilities include the net present value of the following lease payments:
fixed payments, less any lease incentives receivable
variable lease payment that are based on an index or a rate, initially measured using the index or rate on the commencement date
amounts expected to be payable by the Group under residual value guarantees
the exercise price of a purchase option if the Group is reasonably certain to exercise that option
payments of penalties for terminating the lease, if the term reflects the Group exercising that option
The Group elects to not to separate non-lease components from lease components, and instead accounts for each lease component and any associated non-lease components as a single lease component.\u00a0
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period, so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost, comprising the following:
the amount of the initial measurement of lease liability
any lease payments made on or before the commencement date, less any lease incentives received
any initial direct costs
restoration costs
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercising a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate on the effective date of the modification
Financial assets and liabilities are classified into three categories: measured at amortized cost, at fair value through other comprehensive income (FVTOCI) and at fair value through profit and loss (FVTPL).
The Group recognizes financial instruments when it enters into a contract. Financial instruments are derecognized when the contractual rights to the cash flows of the asset expire, or the rights to receive the contractual cash flows on the financial asset are transferred in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. With regard to its trade receivables, the Group engages in non-recourse factoring programs. Receivables are derecognized when the factor pays the Group, which also triggers a fee to be paid for the credit risk assumed by the factor. Factoring fees are recognized in the Group's financial expenses.
Initially, financial instruments are recognized at their fair value. Transaction costs directly attributable to the acquisition or issue of financial instruments are recognized on the initial measurement date, except for financial instruments measured at FVTPL. Transaction costs related to FVTPL financial instruments are recorded in the profit or loss at initial recognition.
The classification of financial assets is based on two criteria: the objective of the Company's business model for managing the assets, and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' on the principal amount outstanding (known as the 'SPPI-test').
Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components, when they are recognized at fair value. The Group holds trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method. Other receivables are initially measured at fair value and subsequently measured at amortized cost.
Trade and other payables are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. Loans and borrowings are initially recognized at fair value, net of transaction costs incurred. Loans and borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
An exchange between an existing borrower and lender of financial liabilities with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.
The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. However, costs or fees that are incremental and directly related to the issue of the new debt instrument are treated as transaction costs of the new liability, and hence are spread forward by adjusting the effective interest rate.
The Group uses derivative financial instruments such as forward exchange contracts, interest rate swaps to hedge its foreign currency risk and interest rate risk, and interest rate cap to hedge its interest rate risks associated with floating-rate borrowings under the Group\u2019s credit facilities.
Derivatives are initially recognized as other financial assets at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value through profit and loss at the end of each reporting period. The derivative is only used for economic hedging purposes and not as a speculative investment.\u00a0 The Group does not apply hedge accounting. Therefore, changes in the fair value of the Group\u2019s derivative financial instrument are recognized immediately in the consolidated statement of profit or loss and are included in finance costs.
The Group has granted put options for remaining non-controlling interests in acquired companies, giving the holders the right to sell to the Group their investments in these subsidiaries. These financial liabilities do not bear interest. In accordance with IAS 32, the Group recognizes a redemption liability corresponding to the present value of the estimated exercise price of the option. The redemption liability is included in other current and non-current liabilities, and the counterpart is a reduction from the Group's equity. At the end of each reporting period, the liability is adjusted to reflect changes in the estimated exercise price. These subsequent changes are accounted for in the income statement.
If the Group has also obtained a call option on the same remaining non-controlling interests of the acquired companies, this option is taken into account for the control assessment in respect of the business combination.
The cash outflow for acquisition of non-controlling interest due to call/put option settlement is included in the financing activities of the consolidated statement of cash flows.
The Group classifies financial liabilities that arise from supplier finance arrangements within loans and borrowings and bank overdrafts in the statement of financial position if they have a similar nature and function to bank loans and bank overdrafts. This is the case if the supplier finance arrangement is part of the financing used in the Group\u2019s normal operating cycle, the level of security provided is similar to bank loans and the terms of the liabilities of the supplier finance arrangement are extended compared to trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in loans and borrowings in the consolidated statement of financial position are included in financing activities in the consolidated statement of cash flows.
The Group recognizes an allowance for expected credit losses (ECLs) for all financial assets that are not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
The impairment methodology applied depends on whether there has been a significant increase in credit risk; if so, the loss allowance is measured as the lifetime expected credit loss. If not, the allowance is measured as the 12-month expected credit loss. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the receivables (see note 4.1 for further details). While cash and cash equivalents and other loan receivables are also subject to the impairment requirements of IFRS 9, no impairment loss was identified as these assets are considered as low-credit risk.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses of financial assets are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
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.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the income statement unless it relates to items recognized in other comprehensive income, in which case it is recognized in other comprehensive income.
Current tax is the expected tax payable (receivable) on the taxable income (loss) for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
The Group applies the first-in, first-out (FIFO) method to represent inventory movements. Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises direct materials, direct labor and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Impairments of inventories to net realizable value are recognized in the profit or loss as part of \u2018cost for goods and consumables\u2019. If the value of impaired inventories increases, the impairment will be reversed to the lowest of the increased net realizable value and the original cost.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary shares and share options are recognized in equity net of tax.
The share premium consists of additional paid-in capital exceeding the par value of outstanding shares.
Treasury share purchases are recognized as a deduction from equity (section other reserves). No gain or loss is recognized on the purchase, sale, issue or cancellation of treasury shares. Consideration paid or received is recognized directly in equity.
The Group operates several defined benefit pension plans.
The liability or asset recognized in the balance sheet of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period, less the fair value of plan assets. The defined benefit obligation is calculated annually by independent qualified actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows, using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in finance expense in the income statement. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the income statement as past service costs.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
The cost of all short-term employee benefits, such as salaries, holiday pay, bonuses, medical aid and other contributions, are recognized during the period in which the employee renders the related service. The Group recognizes those costs only when it has a present legal or constructive obligation to make such payment and a reliable estimate of the liability can be made.
The Group\u2019s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Other long-term employee benefits are calculated using the projected unit credit method. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.
The Group has performance share plans for key management, qualifying as equity-settled share-based payment plans. Equity-settled share-based payment transactions are transactions in which the entity receives goods or services in exchange for its own equity instruments (e.g. shares, options).
Goods or services received in equity-settled share-based payment transactions are measured at their fair value, unless they cannot be estimated reliably, in which case they are determined in accordance with the fair value of the equity instruments granted. The fair value is determined on the grant date, and the value incorporates market conditions using a Monte Carlo calculation. This value remains unchanged over the vesting period. Service conditions and non-market conditions do not affect the fair value of the instruments granted, but are taken into account by adjusting the number of equity instruments included in the measurement of the transaction, an estimate which is revised on each reporting date until the vesting period has lapsed. Azelis accounts for the equity-settled share-based payment transaction in the other reserves section of the equity, and its initial recognition and subsequent changes are accounted for in employee expenses.
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 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 the risks specific to the liability. Unwinding of the discount of provisions is recorded as financial expenses.
Revenue from product sales is recognized when the performance obligation is satisfied, i.e. when the customer obtains control over the promised goods. For the Group, control transfer is generally driven by the agreed upon incoterm. Revenue is measured at the fair value of the consideration received, net of returns, trade discounts and volume rebates. Revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur.
When the outcome of a commission transaction can be estimated reliably, revenue associated with the transaction is recognized by reference to the stage of completion of the transaction at the end of the reporting period. When the Group acts in the capacity of an agent rather than as a principal in a transaction, the revenue recognized is the net amount of commission made by the Group. The Group acts as an agent when it does not take title and is not exposed to risks of the goods, when the risks are borne by the supplier and when the selling prices are set by the suppliers.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group\u2019s other components. The segmentation used by the Group is based on geography, organization and management structure, and commercial interdependencies.
Segment results that are reported to the CEO include items directly attributable to a segment, as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly head office expenses and income tax assets and liabilities, and are presented in a separate reporting unit \u2018Group holding & other\u2019.
The reporting segments used are defined as follows:
EMEA: all operating companies in Europe, Middle East and Africa
Americas: all operating companies in the United States of America, Canada, Mexico and South America (mainly Colombia and Brazil)
Asia Pacific: all operating companies in Asia, South-East Asia and the Pacific region
Group holding & other: all non-operating companies, including the corporate service center and headquarters in Belgium
Government grants are recognized in profit or loss on a systematic basis over the periods in which the entity recognizes as expenses the related expenses for which the grants are intended to compensate. Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.
The consolidated statement of cash flows is prepared using the indirect method. Cash is defined as cash and cash equivalents, less bank overdrafts. Cash flows are presented separately in the statement of cash flows as cash flows from operating activities, investing activities and financing activities.
A number of the Group\u2019s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
The fair value of property, plant and equipment recognized as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm\u2019s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
The fair value of trademarks and distribution rights acquired in business combinations are measured using the income approach (relief from royalty and multi-period excess earning method, respectively). The fair value of other intangible assets is mainly based on the cost approach.
The fair value of inventories is determined based on their estimated selling price in the ordinary course of business, less the estimated costs of completion and sale.
The fair value of financial assets at FVTPL and FVTOCI financial assets is determined by reference to their quoted bid price on the reporting date. If no market prices are available, the instruments are measured using the present value of the expected future cash flows, discounted at the market rate of interest on the measurement date.
The fair value of trade and other receivables is determined as the present value of future cash flows, discounted at the market rate of interest on the measurement date.
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract, using a risk-free interest rate increased by an appropriate additional spread related to the credit risk of the Group and the risk of the counterparty.
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at measurement date, including the Group\u2019s credit risk.
The fair value of contingent consideration qualifying as earnout, recognized in relation to business combinations, is calculated based on a forecast of the underlying performance measure (generally EBIT(D)A) and is discounted at the market rate of interest on the measurement date. The fair value of contingent consideration constituting a mere fixed deferred payment is determined as the present value of future cash flows and discounted at the market rate of interest on the measurement date.
The redemption value of put options on non-controlling interests, recognized in relation to business combinations, is calculated based on specific contractual specifications, consisting mostly of a combination of a multiple on a future performance measure and the balance of certain net working capital items upon exercise of the option.
Assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: valuation techniques for which all inputs which have a significant effect on the recorded fair value are observable for the asset or liability, either directly or indirectly
Level 3: valuation techniques for which all inputs which have a significant effect on the recorded fair value are not based on observable market data
In the process of applying accounting policies and preparing the consolidated financial statements, the Group has made certain judgments (other than those involving estimates) that affect the reported amounts of assets and liabilities, income and expenses.
In addition, the Group is required to make certain estimates and assumptions that affect the measurement and presentation of reported figures. Estimates are based on past experience and on additional knowledge obtained on transactions to be reported, and are reviewed on an ongoing basis. Actual amounts may differ from these estimates. The most critical accounting judgments and estimates related to uncertainties with significant risk of causing material adjustment and applied in the consolidated financial statements are described below:
The Group has judged that the Azelis trademark has an indefinite useful life. As a consequence, the trademark is not amortized. On each reporting date, the Group reviews this judgment and assesses whether the circumstances continue to support the indefinite useful life. The trademark is part of the yearly impairment test. (See note 15).
In assessing the realization of deferred tax assets, management considers the extent to which it is probable that the deferred tax asset will be realized (note 14). The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profit during the periods in which those temporary differences and tax loss carry forwards are available. Management considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. (See note 14.2)
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended. (See note 16.2)
Under supplier finance arrangements, trade payables are transferred by the Group to a financial institution who assumes its creditor obligations. Following this transfer, the Group will no longer be to offset any of the transferred payables against credit notes received from the supplier.
For the purpose of the consolidated statement of cash flows, management considers that the finance provider settles the invoices as a payment agent on behalf of the entity. The payments made by the finance provider are therefore presented as operating cash outflows and financing cash inflows in equal but opposite amounts at the point when the finance provider pays the supplier. When the Group subsequently pays the amount outstanding to the finance provider, this is presented as a financing cash outflow.
In a business combination, the acquired assets and liabilities are measured at fair value. The Group uses assumptions and non-observable information to prepare fair value of the assessed, where no observable information is available. The actual market performance can subsequently differ from the assumptions. The most important assumptions are disclosed in the note for business combinations. (See note 7).
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash-generating unit (CGU) is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period, incorporating estimates for sales growth and margin growth. Cash flows beyond the five-year period are extrapolated using the estimated growth rates. These growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates. (See note 15.2).
Azelis is exposed to several financial and other risks, including:
Credit risks
Liquidity risks
Market risks
Operational risks
Azelis has a risk management framework in place to mitigate those risks. The Board of Directors oversees how management monitors compliance with the Group\u2019s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group\u2019s receivables from customers.
As of December 31, the main credit risk can be summarized as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade and other receivables | 589,031 | 521,896 |
| Cash and cash equivalents | 303,945 | 484,874 |
| Other financial assets | 1,992 | 7,809 |
| \u00a0 | 894,969 | 1,014,578 |
The Group applies the IFRS 9 simplified approach (refer to note 2.7.2).
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. The Group has no significant concentration of credit risk.
The Group has a credit policy under which each new customer is analyzed individually for creditworthiness before the Group\u2019s standard payment and delivery terms and conditions are offered. The Group\u2019s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer.
Customers that fail to meet the Group\u2019s benchmark creditworthiness may transact with the Group only on a prepayment basis. The Group\u2019s credit policy includes suspension of further deliveries if customers fail to pay their debts on time. Moreover, the Group engages in non-recourse factoring for the majority of its revenue in the EMEA region, which is used as an efficiency program in its credit collection processes. No other credit insurance programs are deemed to be necessary.
A significant portion of the Group\u2019s customers have been transacting with the Group companies for many years and losses have occurred infrequently. The Group does not require collateral in respect of trade and other receivables.
The Group establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets, adjusted for forward-looking information through an assessment of both the current and projected direction of economic conditions at the reporting date.
At year-end, the aging of the trade receivables after the deduction of the factoring received is constituted as follows:
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 384,209 | 73.0% | 1,256 | 0.3% |
| Between 0 and 2 months | 94,618 | 18.0% | 2,421 | 2.6% |
| Between 2 and 12 months | 35,411 | 6.7% | 14,221 | 40.2% |
| More than 12 months | 11,999 | 2.3% | 11,960 | 99.7% |
| \u00a0 | 526,237 | 100.0% | 29,858 | 5.7% |
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 340,390 | 71.8% | 2,483 | 0.7% |
| Between 0 and 2 months | 93,354 | 19.7% | 5,636 | 6.0% |
| Between 2 and 12 months | 31,000 | 6.5% | 12,068 | 38.9% |
| More than 12 months | 9,507 | 2.0% | 9,200 | 96.8% |
| \u00a0 | 474,250 | 100.0% | 29,387 | 6.2% |
The loss allowances for trade receivables on December 31 reconcile to the opening loss allowances as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Balance at 1 January | 29,387 | 38,912 |
| Business combination | 2,176 | 3,203 |
| Provisions made in the year | 11,912 | 5,168 |
| Decrease on impairment losses | -13,566 | -16,881 |
| Exchange rate differences | -51 | -1,015 |
| Balance at December 31 | 29,858 | 29,387 |
The Group\u2019s exposure to credit risk is insignificant as the Group deals with highly rated banks for its cash deposits.
The Group\u2019s policy is to provide financial guarantees only in favor of wholly owned subsidiaries. On the balance sheet date, no other material guarantees were outstanding.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group\u2019s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses.
The Group ensures that it has sufficient cash on hand and unused credit facilities to meet expected operational expenses for the respective planning horizon, including the servicing of financial obligations.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of any netting agreements at year-end:
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,661,091 | 2,039,722 | 130,843 | 1,908,879 | 0 |
| Lease obligation (IFRS16) | 163,753 | 216,759 | 36,056 | 88,091 | 92,612 |
| Derivatives | 112 | 112 | 112 | 0 | 0 |
| Trade and other payables | 733,622 | 739,437 | 702,269 | 37,169 | 0 |
| Bank Overdrafts | 19,146 | 19,146 | 19,146 | 0 | 0 |
| \u00a0 | 2,577,724 | 3,015,176 | 888,425 | 2,034,139 | 92,612 |
Loans and borrowings are primarily to be repaid in 2029 (December 31, 2023: in 2026).
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,631,194 | 1,942,106 | 176,219 | 1,749,928 | 15,959 |
| Lease obligation (IFRS16) | 126,619 | 141,658 | 28,213 | 79,863 | 33,582 |
| Derivatives | 3,921 | 3,921 | 3,921 | 0 | 0 |
| Trade and other payables | 865,365 | 872,078 | 797,363 | 74,715 | 0 |
| Bank overdrafts | 18,286 | 18,286 | 18,286 | 0 | 0 |
| \u00a0 | 2,645,385 | 2,978,048 | 1,024,002 | 1,904,506 | 49,541 |
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group\u2019s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Group buys and sells derivatives in order to manage its market risks.
The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in various currencies. The main currencies are euros (\u20ac), pound sterling (GBP) and US dollars (USD).
At any point in time, the Group hedges a significant part of its foreign currency exposure in respect of sales and purchases orders via natural hedges within its operational portfolio. The Group uses mainly forward exchange contracts to hedge its remaining currency risk, all with a maturity of less than one year from the reporting date. When necessary, forward exchange contracts are rolled over at maturity. The Group has not applied hedge accounting.
Interest on borrowings is denominated in currencies that predominantly match the cash flows generated by the underlying operations of the Group, primarily euros (\u20ac), pound sterling (GBP) and US dollars (USD). This provides an economic hedge without derivatives being entered into and therefore the Group has not applied hedge accounting.
The Group\u2019s investments in foreign non-euro subsidiaries are considered to be long-term operations of the Group and are therefore not hedged. Currency translation differences on these long-term operations are reported in the translation reserve in equity.
The exposure to foreign currency risk in current assets and current liabilities is mainly related to balances denominated in USD and GBP, for which the notional amounts (stated in \u20ac) amount to:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| \u00a0 | USD | GBP | USD | GBP |
| Financial assets except for cash and cash equivalents | 210,778 | 3,086 | 158,478 | 3,240 |
| Cash and cash equivalents | 70,961 | 448 | 66,774 | 37,186 |
| Financial liabilities | -284,785 | -17,291 | -173,622 | -151,927 |
| Gross balance sheet exposure | -3,045 | -13,757 | 51,630 | -111,501 |
A 10% strengthening of the euro against the USD and GBP at year-end would have increased (decreased) equity and the income statement by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| \u00a0 | Profit or loss | Equity | Profit or loss | Equity |
| USD | 277 | 277 | -4,694 | -4,694 |
| GBP | 1,251 | 1,251 | 10,136 | 10,136 |
A 10% weakening of the euro against the USD and GBP at year-end would have had the equal but opposite effect in euros to the amounts shown above, on the basis that all other variables remain constant.
The Group adopts a policy of carefully managing its interest rate risk. On a regular basis, the Board of Directors assesses the Group's interest rates versus external benchmarks, ensuring that management will affect financial transactions resulting in fixed borrowing interest rates in case limits are exceeded. As of the reporting date, the external bank borrowings are on a floating interest rate basis.
The Group\u2019s main interest rate risk arises from a long-term borrowing with variable rate (EURIBOR), which exposes the Group to cash flow interest rate risk. The cash flow risk is mitigated through the usage of an interest rate cap.\u00a0
On the reporting date, the interest rate profile of the Group\u2019s interest-bearing financial instruments expressed in their carrying amounts was:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Fixed rate instruments | \u00a0 | \u00a0 |
| Financial liabilities | -1,005,746 | -407,478 |
| \u00a0 | -1,005,746 | -407,478 |
| Variable rate instruments | \u00a0 | \u00a0 |
| Financial assets | 303,945 | 484,874 |
| Financial liabilities | -838,244 | -1,368,621 |
| \u00a0 | -534,299 | -883,747 |
An increase (decrease) of 100 basis points in interest rates on the reporting date would have decreased (increased) equity and the income statement (not considering income tax impact) by the annual amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates and the potential mitigating effect of the interest rate cap, remain constant.
| (in thousands of \u20ac) | Profit or loss - 2024 | Equity - 2024 | ||
|---|---|---|---|---|
| \u00a0 | 100 bp | 100 bp | 100 bp | 100 bp |
| \u00a0 | Increase | Decrease | Increase | Decrease |
| Variable rate instruments | -8,382 | 8,382 | -8,382 | 8,382 |
| Cash flow sensitivity (net) | -8,382 | 8,382 | -8,382 | 8,382 |
| (in thousands of \u20ac) | Profit or loss - 2023 | Equity - 2023 | ||
|---|---|---|---|---|
| \u00a0 | 100 bp | 100 bp | 100 bp | 100 bp |
| \u00a0 | Increase | Decrease | Increase | Decrease |
| Variable rate instruments | -13,686 | 13,686 | -13,686 | 13,686 |
| Cash flow sensitivity (net) | -13,686 | 13,686 | -13,686 | 13,686 |
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group's processes, personnel, technology, and infrastructure, and from external factors other than credit, market, and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behavior. Operational risks arise from all of the Group's operations. The Group's objective is to manage operational risks so as to balance the avoidance of financial losses and damage to the Group's reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.
On a selective basis, the Group has outstanding foreign exchange swap contracts to manage the exposure to foreign currency risk on outstanding foreign currency receivables/payables, as well as an interest rate cap relating to its variable rate interest risk.
To limit its interest rate risk exposure, the Group entered into interest rate cap agreements (interest rate cap) in May 2022, that will expire on March 31, 2025. The interest rate cap modifies the Company\u2019s exposure to interest rate risk by converting a portion of the Company\u2019s variable-rate debt to a fixed-rate basis, thereby reducing the impact of interest rate changes on interest expense. The Group recognizes fair value gains and losses within the financial result.
In connection with business combinations, the Group has outstanding liabilities for contingent consideration and for put options on non-controlling interests. The Group\u2019s financial instruments per category are shown below including the fair value and hierarchy information.
The interest rate cap qualifies for the level 2 category in the fair value hierarchy due to the fact that it is not traded in an active market and the fair value is\u00a0determined using valuation techniques (option pricing model) which maximize the use of observable market data. Since\u00a0all significant inputs required to fair-value the instrument are observable, the instrument is classified as level 2. All derivatives related to forward exchange contracts are classified as level 2. Contingent consideration qualifying as earnout and put options on non-controlling interests are classified as level 3. For the calculation basis of fair values, see also note 2.17.
The carrying amount of the other financial assets and liabilities approximates their fair value.
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 370 | 370 | \u00a0 | 370 | \u00a0 | 370 |
| Derivatives | 4 | - | \u00a0 | - | \u00a0 | 0 | \u00a0 | - |
| Other investments | 4 | 10 | 1,258 | 1,268 | \u00a0 | 1,268 | \u00a0 | 1,268 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 496,379 | 496,379 | \u00a0 | 496,379 | \u00a0 | 496,379 |
| Other receivables | 19 | 16,816 | 75,837 | 92,653 | \u00a0 | 92,653 | \u00a0 | 92,653 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 600 | \u00a0 | 600 | \u00a0 | 600 | \u00a0 | 600 |
| Cash and cash equivalents | 20 | \u00a0 | 303,945 | 303,945 | \u00a0 | 303,945 | \u00a0 | 303,945 |
| Total financial assets | \u00a0 | 17,426 | 877,793 | 895,219 | 0 | 895,219 | 0 | 895,219 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,748,391 | 1,748,391 | \u00a0 | 1,748,391 | \u00a0 | 1,748,391 |
| Other financial liabilities | \u00a0 | 26,707 | 6,459 | 33,166 | \u00a0 | 6,459 | 26,707 | 33,166 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 76,453 | 76,453 | \u00a0 | 76,453 | \u00a0 | 76,453 |
| Bank overdraft | 20 | \u00a0 | 19,146 | 19,146 | \u00a0 | 19,146 | \u00a0 | 19,146 |
| Trade payables | 24 | \u00a0 | 486,804 | 486,804 | \u00a0 | 486,804 | \u00a0 | 486,804 |
| Other current liabilities excl derivatives | 24 | 77,624 | 136,028 | 213,651 | \u00a0 | 136,028 | 77,624 | 213,651 |
| Derivatives | 24 | 112 | \u00a0 | 112 | \u00a0 | 112 | \u00a0 | 112 |
| Total financial liabilities | \u00a0 | 104,443 | 2,473,281 | 2,577,724 | 0 | 2,473,393 | 104,331 | 2,577,724 |
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 726 | 726 | \u00a0 | 726 | \u00a0 | 726 |
| Derivatives | 4 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 |
| Other investments | 4 | 0 | 1,178 | 1,178 | \u00a0 | 1,178 | \u00a0 | 1,178 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 444,863 | 444,863 | \u00a0 | 444,863 | \u00a0 | 444,863 |
| Other receivables | 19 | 11,591 | 65,442 | 77,033 | \u00a0 | 77,033 | \u00a0 | 77,033 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 57 | \u00a0 | 57 | \u00a0 | 57 | \u00a0 | 57 |
| Cash and cash equivalents | 20 | \u00a0 | 484,874 | 484,874 | \u00a0 | 484,874 | \u00a0 | 484,874 |
| Total financial assets | \u00a0 | 17,778 | 997,086 | 1,014,864 | 0 | 1,014,864 | 0 | 1,014,864 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,650,982 | 1,650,982 | \u00a0 | 1,650,982 | \u00a0 | 1,650,982 |
| Other financial liabilities | \u00a0 | 65,072 | 4,744 | 69,816 | \u00a0 | 4,744 | 65,072 | 69,816 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 106,831 | 106,831 | \u00a0 | 106,831 | \u00a0 | 106,831 |
| Bank overdraft | 20 | \u00a0 | 18,286 | 18,286 | \u00a0 | 18,286 | \u00a0 | 18,286 |
| Trade payables | 24 | \u00a0 | 434,085 | 434,085 | \u00a0 | 434,085 | \u00a0 | 434,085 |
| Other current liabilities excl derivatives | 24 | 133,969 | 227,495 | 361,464 | \u00a0 | 227,495 | 133,969 | 361,464 |
| Derivatives | 24 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 |
| Total financial liabilities | \u00a0 | 202,961 | 2,442,423 | 2,645,385 | 0 | 2,446,344 | 199,041 | 2,645,385 |
The Board of Directors\u2019 policy is to maintain a good capital base so as to maintain investor, creditor, and market confidence and to sustain future profitable development of the business. The Board monitors the return on capital and seeks to maintain a balance between the returns on equity versus the levels of borrowings, as well as the advantages and security afforded by a sound capital position.
The Group defines its capital as its equity and its net interest borrowing loans:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Equity | 2,920,146 | 2,676,578 |
| Other interest-bearing loans | 1,843,990 | 1,776,099 |
| Less: Cash and cash equivalents | -303,945 | -484,874 |
| Total capital | 4,460,191 | 3,967,803 |
The Group is not exposed to significant external capital requirements other than covenant requirements from the Term Loans (refer to note 22).
The Group\u2019s reportable segments are based on the regions in which it operates: EMEA, Americas, and Asia Pacific. This reflects how the Group is structured, providing its specialty chemicals distribution services in all these regions.
Operating expenses of non-operating companies are reported in the Group Holding segment. Adjusted EBITA of Group Holding represents\u00a0costs related to corporate activities and central support services, mainly at the Group\u2019s service center and headquarters in Belgium.
Transactions between companies within an operating segment have been eliminated. Revenue therefore represents external sales. Transactions between operating segments are based on arm\u2019s length principle.
The performance of the operating segments is assessed based on a measure of Adjusted EBITA. The Group currently uses Adjusted EBITA in its business operations to develop budgets, measure its performance against those budgets, and evaluate the performance of its operations, among other things.
Gross profit is defined as income less cost of goods and consumables (as disclosed in note 10), before outbound distribution cost.
Total assets and liabilities per segment are not being measured and/or reported to the key decision makers on a regular basis, whereas Net Working Capital is used as a major performance indicator of the operating segments1.
Results of the operating segments are reflected in the below table:
| (in thousands of \u20ac) | EMEA | Americas | Asia Pacific | Group holding & other | Total |
|---|---|---|---|---|---|
| Revenue | 1,792,716 | 1,536,223 | 885,076 | - | 4,214,015 |
| Gross profit | 462,825 | 383,233 | 184,988 | - | 1,031,046 |
| Adjusted EBITA | 228,232 | 189,478 | 88,054 | -35,081 | 470,684 |
| Operating profit | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 385,926 |
| Net Working Capital | 196,248 | 280,783 | 217,906 | -7,416 | 687,521 |
| (in thousands of \u20ac) | EMEA | Americas | Asia Pacific | Group holding & other | Total |
|---|---|---|---|---|---|
| Revenue | 1,793,858 | 1,454,320 | 904,047 | - | 4,152,225 |
| Gross profit | 468,092 | 344,281 | 171,747 | - | 984,120 |
| Adjusted EBITA | 237,623 | 184,577 | 78,407 | -34,347 | 466,260 |
| Operating profit | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 386,903 |
| Net Working Capital | 160,780 | 227,056 | 192,712 | -6,990 | 573,558 |
'Group holding & other' mainly includes the operating expenses for the Group holding activities and limited gross profit that remain unallocated to EMEA, Americas, or Asia Pacific.
The Group does not have material intercompany revenue across its segments. The Group has a diverse customer base in all of its reportable segments and has no individual material customers. The Group's non-financial non-current assets are broken down over its country of domicile and regions as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Belgium | 926,256 | 22.3% | 53,954 | 1.4% |
| Rest of EMEA | 747,945 | 18.0% | 1,528,151 | 38.6% |
| EMEA | 1,674,201 | 40.3% | 1,582,105 | 40.0% |
| Americas | 1,853,980 | 44.6% | 1,787,248 | 45.2% |
| Asia Pacific | 628,307 | 15.1% | 585,942 | 14.8% |
| \u00a0 | 4,156,488 | 100.0% | 3,955,295 | 100.0% |
The Group completed the below acquisitions during the 2024 financial year:
On January 31, 2024, Azelis acquired 100% of the shares of Agspec Pty Ltd (Agspec), a leading distributor of crop nutrition, crop protection and specialty agricultural products in Australia. Agspec's portfolio of crop protection and crop nutrition products complements Azelis\u2019 existing offering, enabling it to offer a wider and more diversified range of products and services to its customers in the agricultural and horticultural markets.
On February 1, 2024, Azelis acquired 100% of the shares of Localpack SA (Localpack), a specialty chemical distributor active in both the life sciences and industrial chemicals segments in Colombia. Localpack is one of the leading specialty chemical distributors in the domestic market. Localpack\u2019s long-standing relationships with global and regional principals, and the technical product expertise that it has built over the years, expand Azelis\u2019 lateral value chain across Latin America.
On March 1, 2024, Azelis acquired 100% of the shares of Oktrade Kimya Sanayi ve Ticaret Anonim \u015eirketi (Oktrade), a distributor of specialty personal care ingredients based in Istanbul, T\u00fcrkiye. Already active in the Turkish personal care market, Azelis enhances its offering by strengthening its lateral value chain with this acquisition, enabling it to become a leader in this fast-growing market.
On June 1, 2024, Azelis acquired control over the distribution business of DBH Osthandelsgesellschaft mbH (DBH), a specialty chemicals distributor focused on AM&A (Advanced Materials & Additives) in Germany and Central & Eastern Europe (CEE). Azelis enhances its lateral value chain by leveraging DBH's diverse product portfolio, its expertise in the German rubber and plastic additives market and its long-standing partnerships with blue-chip principals.
On August 12, 2024, Azelis acquired 100% of the shares of PT Marga Dwi Kencana Ltd (MDK), one of the leading distributors serving the personal care market in Indonesia. MDK\u2019s product portfolio strategically complements Azelis\u2019 lateral value chain, expanding the Group\u2019s platform to serve the high-growth personal care market, and reinforces its footprint in the broader life sciences market in the country.
On October 1, 2024, Azelis acquired 100% of the shares of CPS Chemicals (Coatings) Pty Ltd (CPS) in South Africa, a specialty chemicals distributor to the paint, ink, resins, paper, plastics, and rubber industries. The acquisition expands the Group\u2019s footprint in South Africa, complementing Azelis\u2019 lateral value chain in the CASE segment.
On November 29, 2024, Azelis acquired 100% of the shares of Hortimex Sp. z o.o. (Hortimex), a specialty chemicals distributor active in the food ingredients and nutraceuticals segments serving the Polish market. The acquisition expands the Group\u2019s footprint in Poland, complementing Azelis\u2019 lateral value chain in the Food & Nutrition segment.
On December 31, 2024, Azelis acquired 100% of the shares of Haarla Oy, a specialty distributor of food ingredients and industrial chemicals based in Finland. Its product portfolio strategically enhances Azelis\u2019 lateral value chain, reinforcing its footprint in Life Sciences and Industrial Chemicals in the Nordics.
These aforementioned acquisitions together generate over \u20ac140 million of revenue annually. In 2024, these acquisitions together added \u20ac58.6 million of revenue, \u20ac11.2 million of Adjusted EBITA and \u20ac5.4 million of net profit to the Group's net result.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Assets acquired and liabilities assumed | \u00a0 | \u00a0 |
| Distribution rights | 72,957 | 247,748 |
| Other intangible assets | 178 | 6,336 |
| Property, plant and equipment | 857 | 16,901 |
| Right-of-use assets | 981 | 17,907 |
| Deferred tax assets | 1,566 | 6,511 |
| Other non-current financial assets | 10 | 56 |
| Inventories | 14,349 | 82,050 |
| Trade and other receivables | 20,314 | 96,885 |
| Cash and cash equivalents | 6,809 | 23,616 |
| Loans and borrowings non current | -188 | -9,182 |
| Lease liabilities non current | -197 | -14,510 |
| Deferred tax liabilities | -15,576 | -68,395 |
| Trade and other payables | -18,440 | -52,417 |
| Bank overdrafts | -173 | -3,300 |
| Loans and borrowings current | -1,867 | -53,316 |
| Lease liabilities current | -784 | -3,396 |
| Provisions | -799 | -906 |
| Employee benefit obligations | -234 | -872 |
| Total fair value identified assets acquired and liabilities assumed | 79,764 | 291,716 |
| Non-controlling interests | -390 | -18,945 |
| Estimated earnout liabilities | 7,570 | 33,701 |
| Deferred payments | 4,587 | 6,565 |
| Consideration paid in cash | 143,174 | 488,211 |
| Total consideration | 155,332 | 528,478 |
| Goodwill | 75,958 | 255,705 |
The fair values of the acquired identifiable assets and liabilities, and the value of the consideration paid are accounted for on a provisional basis. Based on currently available information, Azelis does not foresee significant adjustments to these provisional amounts. The purchase price allocations will be finalized at a later stage and may result in adjustments to provisional values as a result of completing the initial accounting from the acquisition date. The fair values of the acquired net assets, based on a provisional assessment, are summarized in the table above. No significant indemnification assets or contingent liabilities had to be recognized in the business combinations.
The considerations are primarily paid for in cash and, depending on the acquisition, also consist of deferred payments and/or accruals for estimated earnout. For 2024 acquisitions, deferred payments and initial earnout liabilities, recognized as part of the consideration paid, total \u20ac12.2 million (2023: \u20ac40.3 million). Earnout payments are all contingent on the profitability of the acquired company at a future point in time and have been estimated based on the business plan of the acquired company.
Total goodwill of Azelis has increased by \u20ac127.6 million in 2024, of which \u20ac76.0 million is attributable to the abovementioned acquisitions in 2024. The remainder is mainly attributable to currency translation and reflected in other comprehensive income, and to adjustments for hyperinflation.
Acquisitions are accounted for using the acquisition method. Goodwill represents the excess of acquisition cost over the fair values of identified acquired assets and liabilities, and mainly represents the business knowledge and the qualified staff. Goodwill is generally not deductible for tax purposes. The trademark and the distribution rights have been valued based upon the expected return being generated through strategic mandates. The trade and other receivables include an amount of \u20ac2.2 million for expected credit loss provisions. Certain transactions relating to key employees\u2019 compensation plans are considered as separate transactions and are not included in the business combination accounting in accordance with IFRS 3.
If the above acquisitions would have occurred at the start of 2024, management estimates that, for 2024, the consolidated revenue would have been \u20ac4,312.5 million, the consolidated Adjusted EBITA would have been \u20ac481.3 million and the consolidated net result for the year would have been \u20ac198.6 million.
During 2024, the Group incurred acquisition-related expenses of \u20ac3.2 million (2023: \u20ac5.6 million) in total, in connection with the costs of external advisors, due diligence, and fees paid to the institutions involved. These expenses are recognized in the consolidated income statement as part of external services and are considered as part of adjustments to determine Adjusted EBITA of the period.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Revenue from sales, net of discounts | 4,197,242 | 4,133,899 |
| Revenue from commercial services | 1,970 | 2,270 |
| \u00a0 | 4,199,212 | 4,136,169 |
| Commissions received | 14,802 | 16,056 |
| \u00a0 | 4,214,014 | 4,152,225 |
The Group's revenues are broken down over product group as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Life Sciences | 2,653,493 | 63.0% | 2,565,485 | 61.8% |
| Industrial Chemicals | 1,560,521 | 37.0% | 1,586,740 | 38.2% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
The Group's revenues are broken down over its country of domicile and regions as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Belgium | 99,509 | 2.4% | 120,729 | 2.9% |
| Rest of EMEA | 1,693,207 | 40.2% | 1,673,128 | 40.3% |
| EMEA | 1,792,716 | 42.5% | 1,793,857 | 43.2% |
| Americas | 1,536,223 | 36.5% | 1,454,320 | 35.0% |
| Asia Pacific | 885,076 | 21.0% | 904,047 | 21.8% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Recharge of expenses to customers | 15,637 | 8,689 |
| Other income | 8,319 | 14,759 |
| \u00a0 | 23,956 | 23,448 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Purchase of goods including change in inventory | 3,128,291 | 3,122,521 |
| Freight and additional charges on purchases | 78,633 | 69,032 |
| \u00a0 | 3,206,924 | 3,191,553 |
Wages and salaries include managers\u2019 fees and current service costs from employee benefits.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Wages and salaries and other personnel related expenses | 275,263 | 269,003 |
| Social charges | 39,289 | 34,790 |
| \u00a0 | 314,552 | 303,793 |
The number of employees (FTE, including contingent workers) located in the regions is set out below:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| EMEA | 1,978 | 1,884 |
| Americas | 1,153 | 1,111 |
| Asia Pacific | 1,013 | 1,031 |
| Holdings | 177 | 180 |
| \u00a0 | 4,321 | 4,206 |
In 2024, the workforce has increased by 160 employees due to acquisitions completed during the year.
The Group is subject to the following defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| German companies | 606 | 640 |
| Belgian companies | 5,376 | 4,849 |
| French companies | 1,971 | 1,945 |
| Italian companies | 1,875 | 1,950 |
| UK companies | 4,850 | 5,653 |
| Other companies | 1,917 | 1,460 |
| Total present value of obligations | 16,594 | 16,497 |
| Fair value of plan assets | -10,727 | -12,795 |
| Amounts not recognized as asset due to asset ceiling | 410 | 2,345 |
| Recognized liability for defined benefit obligations | 6,277 | 6,047 |
| Liability for long-service leave and other employees' benefits | 7,605 | 7,590 |
| Total employee benefits recognized in the balance sheet | 13,882 | 13,637 |
The Group has defined benefit plans in place in Belgium (partly funded), France (unfunded), Italy (unfunded), United Kingdom (wholly funded), Germany (partly funded), Thailand (unfunded), Indonesia (unfunded), and the Philippines (unfunded).
The Group's net defined benefit obligation is based on the difference between the present values of the defined benefit obligations and the plan assets.
Both defined benefit plans and defined contribution plans are in place. Charges for defined contribution schemes amount to \u20ac3.8 million (2023: \u20ac4.2 million). Expenses for all plans are included in 'Wages, salaries and other personnel related expenses'.
The pension plans in place in Belgium are all legally structured as defined contribution plans but qualify as defined benefit plans due to their guaranteed minimum return, which exposes the employer to a financial risk; there is a legal obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
In the United Kingdom, the defined benefit pension plan is financed through the accumulation of plan assets held separately from those of the Group in an independently administered fund.
The actuarial calculations of the present value of defined benefit obligations were based on the following main assumptions:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| Discount rate | 2.84% - 7.1% | 3.2% - 6.3% |
| Inflation | 3.2% - 10.1% | 2.5% - 4.47% |
| Future pension increases | 0% - 6% | 0% - 6% |
| Future salary increases | 0% - 10% | 0% - 6% |
In the event that the discount rate would increase or decrease by 0.5%, the defined benefit obligation would decrease by \u20ac0.6 million or increase by \u20ac0.6 million, respectively.
The following table shows the changes in the present value of the defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Liability for defined benefit obligations at the beginning of period | 16,497 | 15,703 |
| Current service costs and interest | 1,966 | 809 |
| Benefits paid | -1,123 | 13 |
| Remeasurement arising from changes in demographic assumptions | 79 | -496 |
| Remeasurement arising from changes in financial assumptions | -359 | 228 |
| Remeasurement arising from experience | -593 | 202 |
| Business combination | 118 | 72 |
| Exchange rate differences | 9 | -34 |
| Liability for defined benefit obligations at 31 December | 16,594 | 16,497 |
The following table shows the changes in the plan assets:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Fair value of plan assets at the beginning of the period | 12,795 | 12,625 |
| Contributions paid into the plan | 501 | 822 |
| Benefits paid by the plan | -647 | -273 |
| Expected return on plan assets | 585 | -63 |
| Return on assets excluding amounts in net interests | -2,336 | -361 |
| Exchange rate differences | -171 | 45 |
| Fair value of plan assets at 31 December | 10,727 | 12,795 |
At year-end, the plan assets consisted mainly of equity instruments.
The net periodic cost for defined benefit obligations recognized in the income statement is shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Current service costs | -1,340 | -1,680 |
| Interest on obligation | -520 | -230 |
| Interest on assets | 585 | -63 |
| \u00a0 | -1,275 | -1,973 |
The changes in actuarial gains and losses from defined benefit obligations and plan assets recognized in other comprehensive income are shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Return on assets, excluding amounts in net interests | -2,336 | -361 |
| Actuarial gains and losses on benefit obligations | 872 | 66 |
| Effect of changes in asset ceiling | 1,935 | 153 |
| Exchange rate differences | 188 | -36 |
| \u00a0 | 659 | -178 |
The Group has long-term incentive plans (LTIPs) in place, granting share awards to certain directors, employees, and self-employed managers of the Group. The granting of share awards is subject to a three-year performance period (starting January 1) and takes into account the following metrics and weightings: 50% relative total shareholders' return (market condition), 35% Adjusted EBITA (non-market condition), and 15% carbon emissions reduction (non-market condition). The awards are subject to a vesting period of three years starting from the grant date and are dependent on the Remuneration and Nomination Committee determining whether performance targets have been met. Based on performance delivered, the number of performance shares awarded will be vested and become unconditionally owned by the participant.
The movement in number of performance shares outstanding and the related weighted average fair value per share are as follows:
| \u00a0 | 2024 | 2023 | ||
|---|---|---|---|---|
| (in number of shares and \u20ac) | Number of shares | Weighted average fair value | Number of shares | Weighted average fair value |
| Outstanding as of 1 January | 246,632 | 21.75 | 165,605 | 19.19 |
| Granted during the year | 228,770 | 16.91 | 172,817 | 24.07 |
| Forfeited during the year | - 29,977 | N/A | - 91,790 | N/A |
| Performance adjustment | - 202,315 | N/A | - | N/A |
| Outstanding as of 31 December | 243,110 | 22.71 | 246,632 | 21.75 |
The fair value of the performance shares was measured on the basis of Azelis' share price on the grant date and has been discounted with the sum of the expected dividend yield for the performance period. The expected dividend yield has been determined based on target pay-out ratio and consensus figures for net profit, divided by market capitalization. The market condition of total shareholders return was embedded in the fair value based on a Monte Carlo simulation incorporating a number of assumptions (volatility, expected dividend yield, and the correlation coefficients between the share price returns of the peer companies).
In 2024, above changes in outstanding performance shares resulted in an expense of \u20ac1.3 million (2023: \u20ac1.4 million), which is recognized in the consolidated income statement as part of employee benefits expenses.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Distribution | 95,033 | 86,534 |
| Utilities, communication, insurance and administrative expenses | 50,400 | 51,356 |
| Commercial expenses | 11,616 | 10,489 |
| Professional service fees | 29,535 | 28,880 |
| Lease expenses | 1,833 | 449 |
| Other expenses | 27,229 | 14,618 |
| \u00a0 | 215,646 | 192,325 |
The professional services & other expenses of 2024 include \u20ac3.2 million (2023: \u20ac5.8 million) mainly regarding M&A activities.
Audit fees included under professional service fees in the below table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Audit fees | \u00a0 | \u00a0 |
| Total fees for the audit of the annual accounts | 2,693 | 2,098 |
| Total fees for audit by non-PWC companies | 703 | 645 |
| Non-audit fees paid to group auditor network | \u00a0 | \u00a0 |
| Total fees for other attestation | 453 | 512 |
| Total fees for other non-audit services (incl. tax) | 64 | 56 |
| \u00a0 | 3,914 | 3,311 |
In 2024, audit fees increased mainly due to audit requirements for the sustainability statement under CSRD.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
The income tax expenses consist of:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Current period tax expense (-) / income | -78,110 | -78,013 |
| Adjustments to prior years income tax expense (-) / income | 257 | -1,419 |
| Provisions for tax risks | -45 | -38 |
| \u00a0 | -77,898 | -79,470 |
| Deferred tax income / loss (-) | 11,258 | 21,544 |
| Total income tax income / expense (-) | -66,640 | -57,926 |
Income tax expense consists primarily of income taxes for the current period and prior period of Group companies.
The differences between the taxable income related to the Belgian tax rate and the effective tax rate are reconciled as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Profit/loss (-) before tax | 256,108 | \u00a0 | 247,238 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income tax using the domestic corporation tax rate | -63,617 | -25% | -61,810 | -25% |
| Impact of tax in different jurisdictions with difference to domestic rate | 1,763 | 1% | 1,013 | 0% |
| Tax effect of income not subject to tax | 11,026 | 4% | 9,381 | 4% |
| Tax effect of expenses not deductible for tax purposes | -12,272 | -5% | -16,482 | -7% |
| Utilization of previously unrecognized tax losses | 109 | 0% | 1,622 | 1% |
| Tax effect of unrecognized current tax losses | -3,164 | -1% | -2,706 | -1% |
| Deferred tax assets on previously unrecognized tax losses | 4,330 | 2% | 15,707 | 6% |
| Adjustments on applicable tax rate | -819 | 0% | -2,505 | -1% |
| Adjustments to prior year income tax expense (income) | 257 | 0% | -2,739 | -1% |
| Pillar Two | -1,115 | 0% | 0 | 0% |
| Other | -3,138 | -1% | 593 | 0% |
| Total income tax income / expense (-) in income statement | -66,640 | -26.0% | -57,926 | -23.4% |
The effective tax rate 2024 has mainly been affected by:
Non-deductible expenses mainly driven by monetary loss on hyperinflation
Fair value adjustment on financial liabilities regarding acquisition-related earnout liabilities and put options on non-controlling interests
Recognition of deferred tax assets on previously unrecognized tax losses, based on the projection of future tax profits
Deferred tax assets and liabilities are attributable to the following:
| (in thousands of \u20ac) | 1 January | Business combinations | Income statement | OCI | Other | Translation differences | December 31 |
|---|---|---|---|---|---|---|---|
| Property, plant and equipment | -35,699 | -2,237 | 13,954 | - | - | 192 | -23,790 |
| Intangible assets | -255,071 | -14,097 | -385 | - | 65,234 | -4,390 | -208,708 |
| Inventories | 10,323 | 749 | -3,738 | - | -6,857 | -48 | 429 |
| Trade receivables | 5,636 | 589 | -1,454 | - | -2,985 | -92 | 1,694 |
| Loans and borrowings | 37,657 | 233 | -4,670 | 6,508 | -34,094 | -100 | 5,535 |
| Employee benefits | 6,343 | 54 | 489 | -165 | -5,510 | 144 | 1,355 |
| Provisions, derivatives and other items | 2,212 | - | 5,122 | - | -3,617 | 131 | 3,848 |
| Untaxed reserves | 76 | - | 32 | - | -38 | -3 | 67 |
| Tax value of loss carry-forwards | 25,910 | - | 1,908 | - | -12,133 | 82 | 15,766 |
| \u00a0 | -202,613 | -14,709 | 11,258 | 6,343 | - | -4,084 | -203,804 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Deferred Tax liability | -218,306 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -225,904 |
| Deferred Tax assets | 15,693 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 22,100 |
| \u00a0 | -202,613 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -203,804 |
Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible for the Group companies, management believes it is probable that the Group will realize the benefits of these deductible differences.
| (in thousands of \u20ac) | 1 January | Business combinations | Income statement | OCI | Other | Translation differences | December 31 |
|---|---|---|---|---|---|---|---|
| Property, plant and equipment | -2,640 | -6,123 | -2,787 | - | -27,305 | 3,156 | -35,699 |
| Intangible assets | -190,198 | -66,188 | -3,719 | - | 3,908 | 1,126 | -255,071 |
| Inventories | 9,589 | 5,445 | -4,432 | - | - | -279 | 10,323 |
| Trade receivables | 3,835 | 1,863 | 10 | - | - | -72 | 5,636 |
| Loans and borrowings | 1,792 | 5,133 | 6,486 | - | 27,305 | -3,059 | 37,657 |
| Employee benefits | 1,492 | 402 | 4,626 | -17 | - | -160 | 6,343 |
| Provisions, derivatives and other items | 714 | 123 | 1,473 | - | - | -98 | 2,212 |
| Untaxed reserves | 8,344 | - | -8,142 | - | - | -126 | 76 |
| Tax value of loss carry-forwards | -3,078 | 125 | 28,029 | - | - | 834 | 25,910 |
| \u00a0 | -170,150 | -59,220 | 21,544 | -17 | 3,908 | 1,322 | -202,613 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Deferred Tax liability | -190,755 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -218,306 |
| Deferred Tax assets | 20,605 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 15,693 |
| \u00a0 | -170,150 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -202,613 |
The following deferred tax assets related to compensable losses of Group companies have not been recognized:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Gross | Tax | Gross | Tax | |
| Tax losses | 41,324 | 10,331 | 75,321 | 18,830 |
Unrecognized carry forward losses of \u20ac37.0 million (2023: \u20ac69.8 million) can be used unlimited in time, and \u20ac4.3 million (2023: \u20ac5.6 million for period 2023-2037) need to be used until 2031.
No deferred tax assets have been recognized on these carry forward losses, due to the fact that they do not meet the recognition criteria for a deferred tax asset.
The Group may have unrecognized tax liabilities in respect of taxable temporary differences relating to the non-distributed reserves of one of its subsidiaries that would be taxed when distributed. No deferred tax liability has been recognized because the Group controls whether the liability will be incurred, and management is satisfied that the liability will not be incurred in the foreseeable future.
The Group is within the scope of the OECD Pillar Two model rules. In Belgium, the jurisdiction in which Azelis Group NV is incorporated, Pillar Two legislation has come into effect from January 1, 2024. Under the legislation, the parent company is liable to pay a top-up tax for the difference between the GloBE effective tax rate per jurisdiction and the 15% minimum rate for its subsidiaries that are taxed at a GloBE effective tax rate of less than 15%. The Group has a limited number of jurisdictions with an effective tax rate lower than 15%. As at December 31, 2024, \u20ac15.7 million of the Group\u2019s GloBE income is taxed at an average effective tax rate of 8.2% and is subject to the top-up tax. As of December 31, 2024, the Group has recognized in its corporate income tax expense a Pillar Two top-up tax expense for \u20ac1.1 million.
| (in thousands of \u20ac) | Goodwill | Trademarks | Distribution rights | Concessions and licenses | Development costs | Customer lists | Other | Intangibles in progress | Total |
|---|---|---|---|---|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,174,256 | 317,378 | 964,516 | 8,159 | 7,738 | 5,670 | 26,372 | 5,371 | 3,509,462 |
| Accumulated amortization and impairment | - | - | -137,552 | -4,702 | -3,904 | -1,663 | -13,789 | -3,106 | -164,720 |
| \u00a0 | 2,174,256 | 317,378 | 826,964 | 3,456 | 3,834 | 4,007 | 12,583 | 2,265 | 3,344,742 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 256,106 | - | 246,125 | 30 | 35 | - | 6,271 | - | 508,567 |
| Additions | - | - | 1,086 | 73 | 1,284 | 567 | 1,667 | 5,490 | 10,166 |
| Amortization | - | - | -57,319 | -395 | -1,434 | -937 | -4,372 | - | -64,458 |
| Impairment charge | - | - | -1,662 | - | - | - | - | - | -1,662 |
| Disposals | - | - | - | - | - | 13 | -383 | 12 | -358 |
| Reclassifications | - | - | - | -15 | -4 | 508 | 911 | -1,224 | 177 |
| Hyperinflation | 19,627 | - | 12,419 | 2 | - | - | 36 | - | 32,083 |
| Translation differences | -40,738 | - | -29,657 | -90 | 1 | -370 | 68 | -87 | -70,873 |
| Changes in the Period | 234,995 | - | 170,993 | -395 | -118 | -220 | 4,198 | 4,191 | 413,642 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,409,251 | 317,378 | 1,194,490 | 8,159 | 9,054 | 6,387 | 34,942 | 9,562 | 3,989,224 |
| Accumulated amortization and impairment | - | - | -196,534 | -5,097 | -5,338 | -2,600 | -18,162 | -3,106 | -230,840 |
| \u00a0 | 2,409,251 | 317,378 | 997,956 | 3,061 | 3,716 | 3,786 | 16,780 | 6,456 | 3,758,384 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 73,560 | - | 76,613 | 178 | - | - | - | - | 150,350 |
| Additions | - | - | 1,094 | 42 | 1,269 | 17 | 435 | 6,612 | 9,469 |
| Amortization | - | - | -62,791 | -819 | -1,660 | -691 | -5,205 | - | -71,166 |
| Impairment charge | - | - | -1,567 | - | - | - | - | - | -1,567 |
| Disposals | 21 | - | - | -96 | -10 | - | 36 | -82 | -132 |
| Reclassifications | - | - | - | 2,011 | 4,139 | -1 | 6,038 | -11,683 | 505 |
| Hyperinflation | 23,036 | - | 13,276 | 1 | - | - | 30 | - | 36,344 |
| Translation differences | 30,976 | - | 14,905 | 160 | 139 | 77 | 104 | 77 | 46,438 |
| Changes in the Period | 127,593 | - | 41,528 | 1,476 | 3,878 | -598 | 1,439 | -5,076 | 170,241 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,536,844 | 317,378 | 1,300,377 | 10,453 | 14,592 | 6,480 | 41,586 | 4,486 | 4,232,198 |
| Accumulated amortization and impairment | - | - | -260,893 | -5,916 | -6,998 | -3,292 | -23,366 | -3,106 | -303,573 |
| \u00a0 | 2,536,844 | 317,378 | 1,039,484 | 4,538 | 7,594 | 3,189 | 18,219 | 1,380 | 3,928,625 |
The reclassifications relate mainly to internal project costs, which are recognized at year-end as intangibles.
The trademark relates to the Azelis name. Azelis uses its name globally, and its trade name is considered to be a key asset of its distribution activities given its status as a major distributor in the specialty chemicals sector. The name both supports the Group in onboarding principals and customers, and in acquiring companies that want to become part of the Group as they know that their business will grow being part of it. The Azelis trademark is estimated to have an indefinite economic life for amortization purposes; therefore, effectively no amortization expenses are being booked through Azelis' income statement. The total value of \u20ac317.4 million on December 31, 2024, originates entirely from the EQT/PSP acquisition in November 2018 and remained unchanged since that date.
The translation differences of \u20ac46.4 million gain (2023: \u20ac70.9 million loss) are recognized in other comprehensive income and accumulated in the translation reserve within equity. Reference is made to note 21.4.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purpose of impairment testing, goodwill is allocated to the following CGUs:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| EMEA | 843,470 | 782,687 |
| Americas | 1,295,037 | 1,251,715 |
| Asia Pacific | 398,337 | 374,849 |
| Total goodwill | 2,536,844 | 2,409,251 |
All goodwill acquired in the business combinations was allocated to a CGU at the end of the reporting period. Goodwill is allocated on a regional level as it is the Group's regions that are expected to benefit from the business combinations, and as goodwill is also monitored internally at regional level. The Group expects synergies to be realized in the region of acquisition.
Trademarks with a book value of \u20ac317.4 million (2023: \u20ac317.4 million) have an indefinite life. These do not generate cash inflows independently and qualify as corporate assets. As their carrying amount cannot be allocated to the CGUs on a reasonable and consistent basis, the corporate assets are allocated to the Group as a whole, and the impairment test is performed in two stages.
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
| (in thousands of \u20ac) | Land and buildings | Plant and equipment | Other | Total |
|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 32,491 | 15,193 | 30,403 | 78,086 |
| Accumulated depreciation and impairment | -4,144 | -4,877 | -11,182 | -20,203 |
| \u00a0 | 28,347 | 10,316 | 19,221 | 57,884 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 840 | 3,398 | 11,909 | 16,148 |
| Additions | 431 | 1,605 | 6,463 | 8,499 |
| Depreciation | -1,143 | -2,278 | -5,345 | -8,765 |
| Reversal of impairment | 3,311 | - | - | 3,311 |
| Disposals | -2,136 | -353 | 82 | -2,407 |
| Reclassifications | 47 | 65 | -223 | -111 |
| Hyperinflation | - | 2 | 129 | 131 |
| Translation differences | -752 | -9 | -351 | -1,112 |
| Changes in the Period | 598 | 2,430 | 12,664 | 15,693 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 30,921 | 19,901 | 48,412 | 99,234 |
| Accumulated depreciation and impairment | -1,976 | -7,154 | -16,526 | -25,657 |
| \u00a0 | 28,945 | 12,747 | 31,886 | 73,577 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 353 | 265 | 239 | 857 |
| Additions | 90 | 1,198 | 7,833 | 9,121 |
| Depreciation | -1,189 | -2,347 | -5,827 | -9,363 |
| Impairment | -284 | - | -30 | -314 |
| Disposals | -3,850 | -684 | -612 | -5,147 |
| Reclassifications | 27 | 1 | -889 | -861 |
| Hyperinflation | - | 9 | 36 | 46 |
| Translation differences | -265 | 56 | -1,644 | -1,853 |
| Changes in the Period | -5,118 | -1,502 | -894 | -7,514 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 27,276 | 20,746 | 53,375 | 101,397 |
| Accumulated depreciation and impairment | -3,449 | -9,501 | -22,383 | -35,334 |
| \u00a0 | 23,827 | 11,245 | 30,992 | 66,063 |
The category 'Other' mainly relates to leasehold improvements, comprising also an insignificant amount of assets under construction.
On December 31, 2024, the Group had not pledged any land and buildings, or plant and equipment as security for the bank loans (2023: zero). Other restrictions are mainly related to leasehold improvements and leased machinery.
The right of use assets mainly relates to rental agreements for offices, warehouses, and cars.
| (in thousands of \u20ac) | Land and buildings | Other | Total |
|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 130,385 | 27,642 | 158,027 |
| Accumulated depreciation and impairment | -42,829 | -18,215 | -61,045 |
| \u00a0 | 87,555 | 9,426 | 96,982 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 16,174 | 1,796 | 17,971 |
| Additions | 19,432 | 9,776 | 29,209 |
| Depreciation | -19,357 | -5,950 | -25,307 |
| Disposals | -1,309 | -98 | -1,407 |
| Remeasurements | 6,212 | 1,273 | 7,485 |
| Hyperinflation | 3,566 | -188 | 3,378 |
| Translation differences | -4,775 | -487 | -5,262 |
| Changes in the Period | 19,945 | 6,122 | 26,066 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 169,686 | 39,714 | 209,399 |
| Accumulated depreciation and impairment | -62,186 | -24,166 | -86,352 |
| \u00a0 | 107,500 | 15,548 | 123,048 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 817 | 164 | 981 |
| Additions | 56,851 | 10,543 | 67,394 |
| Depreciation | -24,958 | -7,134 | -32,092 |
| Remeasurements | 8,743 | 417 | 9,159 |
| Hyperinflation | 3,011 | 257 | 3,268 |
| Translation differences | -621 | -93 | -714 |
| Changes in the Period | 34,799 | 3,699 | 38,498 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 229,443 | 50,547 | 279,990 |
| Accumulated depreciation and impairment | -87,144 | -31,300 | -118,444 |
| \u00a0 | 142,299 | 19,247 | 161,546 |
Remeasurements mainly relate to the prolongation of the lease period of existing contracts.
The Group has lease contracts that have not yet commenced as of December 31, 2024 with future lease payments of around \u20ac4.4 million (2023: \u20ac82.2 million).
Azelis holds a 50% investment in Chemlog S.A.S. (refer to note 26.4). Chemlog's aggregated figures are presented as follows:
| (in thousands of \u20ac) | Assets | Liabilities | Equity | Revenue | Net result for the period |
|---|---|---|---|---|---|
| 31 December 2024 | 949 | 441 | 508 | 1,881 | 28 |
| 31 December 2023 | 974 | 393 | 581 | 1,925 | 111 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Inventories | 714,574 | 619,636 |
| Valuation allowance/write downs | -36,629 | -56,845 |
| Net carrying amount of inventories | 677,945 | 562,790 |
Azelis' inventories mainly consist of finished goods.
Usage of inventories is recorded under 'Costs for goods and consumables' in the consolidated income statement. In 2024, write-downs of inventory of \u20ac15.6 million (2023: \u20ac10.3 million) are included under 'Costs for goods and consumables'.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade receivables | 496,379 | 444,863 |
| Other receivables | 92,653 | 77,033 |
| \u00a0 | 589,031 | 521,896 |
See note 4.1.1 for aging and allowance of these receivables. Other receivables relate mainly to prepayments.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Bank balances and cash on hand | 303,945 | 484,874 |
| Bank overdrafts (-) | -19,146 | -18,286 |
| Cash and cash equivalents (net) in the cash flow statement | 284,799 | 466,588 |
Interest rates payable for bank overdrafts used have a variable interest rate based on Euribor plus a margin.
Per Belgian regulations and the Company's Articles of Association, Azelis Group NV must allocate to legal reserve a minimum of 5% of the standalone net profit, until such reserve reaches 10% of the share capital. As of December 31, 2024, the legal reserve (as included in other reserves) amounts to \u20ac488.2 thousand (2023: \u20ac26.0 thousand).
The basic earnings per share and diluted earnings per share are calculated as follows:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| Net group profit/loss (-) attributable to shareholders (in thousands of \u20ac) | 180,693 | 177,704 |
| Average number of shares (in thousand shares) | 243,536 | 239,856 |
| Basic earnings per share | 0.74 | 0.74 |
| Dilution adjusted average number of shares (in thousand shares) | 243,779 | 240,102 |
| Diluted earnings per share | 0.74 | 0.74 |
The average number of shares are calculated as:
| (in thousands) | 2024 | 2023 |
|---|---|---|
| Ordinary shares issued (entitled to dividend) | 243,922 | 233,846 |
| Weighted effect of treasury shares | -386 | -246 |
| Weighted effect of new ordinary shares issued | 0 | 6,256 |
| Average number of shares for basic EPS | 243,536 | 239,856 |
| Weighted effect of share-based payment | 243 | 247 |
| Average number of shares for diluted EPS | 243,779 | 240,102 |
On May 19, 2023, Azelis increased its share capital by (rounded) \u20ac200\u00a0million, following the issuance of 10,075,566 new shares, at a price of \u20ac19.85 per share and with the same rights as the existing shares of the Company. After this capital increase, the capital of the Company amounted to \u20ac5,879,999,963.10, represented by 243,921,719 equal shares. There were no changes in the share capital during 2024.
Other reserves are part of the Reserves in the consolidated statement of financial position. These include the equity effect of the capital reorganization under common control in 2021 mainly due to the cancellation of the historical share capital and share premium, the initial recognition of written put options on non-controlling interests, transactions with treasury shares, and other adjustments to equity.
As of December 31, 2024, the Group has recognized within other reserves, the initial recognition of put options for a total amount of \u20ac86.0 million mainly related to the minority stakes in Ashapura (India) and Vogler Ingredients (Brazil). In 2023, other reserves included the initial recognition of put options for a total amount of \u20ac148.4 million.
In 2024, the Group purchased 130,000 treasury shares on Euronext Brussels for a total amount of \u20ac2.5\u00a0million to fund its long-term incentive plan (2023: 150,000 treasury shares for a total amount of \u20ac3.4 million).
Translation reserve is part of the Reserves in the consolidated statement of financial position.
Exchange differences arising on translation of the foreign controlled entities are recognized in other comprehensive income and accumulated in the translation reserve within equity.
The majority of the intangible assets on Azelis' statement of financial position relate to the EQT/PSP acquisition in November 2018. The respective amounts have been allocated to Azelis' three operating segments and, per IFRS, also on the basis of the underlying foreign currencies in Azelis' respective jurisdictions (of which a major part relates to Azelis' activities in the United States). Exchange differences arising on translation of the intangible assets are recognized in other comprehensive income and accumulated in the translation reserve within equity.
In 2024 the translation reserve has increased by \u20ac57.2 million (2023: decrease by \u20ac99.3 million), mainly originating from the translation to EUR of the financial positions of subsidiaries having their local currency in USD, TRL and COP.
Retained earnings includes the unappropriated result of previous years.
Reserves available for distribution is part of the Reserves in the consolidated statement of financial position.
In September 2021, and in connection with Azelis' IPO, the Group reduced its share capital by \u20ac400 million against reserves available for distribution, in order to create funds for distribution to the shareholders. No capital contributions were repaid to the shareholders in the context of this capital reduction.
At the Annual General Meeting of the Company held on June 13, 2024, the shareholders approved the payment of a total dividend amount of \u20ac53.3 million regarding the 2023 financial year, i.e. a gross dividend of (rounded) \u20ac0.22 per share outstanding at the moment of the dividend payout. The total amount of \u20ac53.3 million was paid to the shareholders in 2024.
On March 4, 2025, a dividend of \u20ac54.9 million, implying \u20ac0.23 dividend per share1, was proposed by the Board of Directors. The dividend will be paid out to the shareholders upon approval by the Shareholders' Meeting on May 8, 2025.
Non-controlling interests reflect the share of equity ownership in the Group's subsidiaries that is not owned by the Group, even though those subsidiaries are consolidated in the Group's consolidated financial statements. Ashapura Aromas (India), Vogler Ingredients (Brazil) and Azelis South Africa (South Africa) are the main contributors for the non-controlling interests. Refer also to note 26.4.
In 2024, the Group acquired the full non-controlling interests in Catalite (Thailand), MKVN Chemicals (Vietnam), Viet Chemicals Trading (Vietnam), Asia Primera Kimika (Philippines), Phil-Asiatic Supply & Services (Philippines) and part of the non-controlling interest in Vogler Ingredients (Brazil) by settling the related put option redemption liabilities.
The Group\u2019s debt finance consists mainly of the following financial instruments:
| (in thousands of \u20ac) | Interest rate (base) | Interest rate (margin) | Expiration | Notional amount | Carrying amount |
|---|---|---|---|---|---|
| EUR term loan | 3.20% | 1.90% | 2029 | 600,000 | 592,664 |
| Revolving Credit Facility | N/A1 | 1.65% | 2029 | 0 | 0 |
| Bond 2023 | 5.75% | N/A | 2028 | 400,000 | 395,083 |
| Bond 2024 | 4.75% | N/A | 2029 | 600,000 | 595,663 |
| Schuldschein | 2,64% (variable) & 4.74% (fixed) | 2.55% | 2027 & 2029 | 30,000 | 29,949 |
| Other bank loans | 1,00% - 14,56% | N/A | 2026 | 23,698 | 23,698 |
| Accrued interest | \u00a0 | \u00a0 | \u00a0 | 24,032 | 24,032 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,677,730 | 1,661,091 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 1,630,555 | 1,613,916 |
| Current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 47,175 | 47,175 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,677,730 | 1,661,091 |
| (in thousands of \u20ac) | Interest rate (base) | Interest rate (margin) | Expiration | Notional amount | Carrying amount |
|---|---|---|---|---|---|
| First lien \u20ac | 4.07% | 1.90% | 2026 | 900,000 | 896,911 |
| First lien GBP | 5.26% | 2.15% | 2026 | 148,196 | 147,623 |
| Revolving Credit Facility | N/A1 | 1.65% | 2028 | 0 | 0 |
| Bond 2023 | 5.75% | N/A | 2028 | 400,000 | 392,478 |
| Schuldschein | 2.64%-3.92% (variable & fixed) | 1.9%-2.5% | 2025-2029 | 108,500 | 108,439 |
| Other bank loans | 0,50% - 17,62% | N/A | 2026 | 59,215 | 59,215 |
| Accrued interest | \u00a0 | \u00a0 | \u00a0 | 26,528 | 26,528 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,642,439 | 1,631,194 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 1,561,879 | 1,550,634 |
| Current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 80,560 | 80,560 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,642,439 | 1,631,194 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| As of January 1 | 1,631,195 | 1,303,717 |
| Cash flows from loans and borrowings | 42,293 | 252,274 |
| Transaction costs paid | -13,072 | -8,117 |
| Changes arising from business combinations | 2,054 | 62,497 |
| Capitalized transactions cost amortized | 7,745 | 3,113 |
| Changes in interest accruals | -2,496 | 14,904 |
| Currency translation differences | -6,628 | 2,806 |
| As of the end of the period | 1,661,091 | 1,631,195 |
In September 2024, the Group concluded a \u20ac600 million Term Loan Facility (maturing in 2029) and additionally issued a new bond totaling to \u20ac600 million (due in 2029), to refinance its existing EUR and GBP Term Loans (maturing in 2026) as well as the portion of the outstanding Schuldschein loans due in 2025. At the same time, the Group has refinanced and increased its Revolving Credit Facility to maturity in 2029 (with 2 one-year extension possibilities) and \u20ac500 million, respectively.
Related to these refinancing transactions, a total of \u20ac13.1 million transaction costs were capitalized in 2024 and are amortized over the lending period of the underlying instruments. The remaining capitalized transaction costs paid in relation to the refinanced EUR and GBP Term Loans were amortized in 2024.
In December 2024, a portion of \u20ac78.5 million of the outstanding Schuldschein loan due in 2027 was repaid as well.
As at December 31, 2024, the Group holds bank borrowings at variable interest rates from a lender's syndicate in the form of a Term Loan Facility of \u20ac600 million (2023: \u20ac900 million and GBP 128.8 million) and a Revolving Credit Facility of \u20ac500 million (2023: \u20ac350 million). The Revolving Credit Facility is fully undrawn as of December 31, 2024 (2023: facility of \u20ac350 million fully unused).
The variable interest rates are based on EURIBOR (capped at a floor of 0%), and a margin based on the Group's total net leverage. The margin is capped at 2.40% for the \u20ac\u00a0Term Loan Facility (1.90% until March 26, 2025), and 2.15% (1.65% until March 26, 2025) for the Revolving Credit Facility. At the latest in September 2025, the Group may incorporate an adjustment to the margin linked to its new Impact 2030 sustainability targets.
In addition to the Term Loan Facility and Revolving Credit Facility, the Group also holds different Schuldschein agreements, of which \u20ac30.0 million was used as of December 31, 2024 (2023: \u20ac108.5 million). The Schuldschein is a semi-private bond type of financing, with maturity dates of the outstanding tranches in 2027 and 2029. Interest charges are partly fixed at 4.74% and partly variable (6m Euribor plus margin 2.55%). The Schuldschein agreements can be repaid in advance under certain conditions.
In March 2023, Azelis Group issued a \u20ac400\u00a0million bond at a fixed interest rate of 5.75%, which is due in 2028. In September 2024, the Company issued a \u20ac600 million bond at a fixed interest rate of 4.75%, which is due in 2029.
In accordance with its policy on managing the risk related to interest rates (refer to the Risk Management section), Azelis has interest rate cap agreements for a total loan amount of \u20ac700 million, expiring March 31, 2025, providing the Group with an interest rate cap of 3% on EURIBOR until that date.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| As of January 1 | 126,619 | 101,558 |
| Business combination | 981 | 17,907 |
| New contracts | 67,114 | 29,863 |
| Remeasurements | 6,836 | 6,096 |
| Cash out | -38,073 | -28,704 |
| Currency translation differences | 277 | -101 |
| As of the end of the period | 163,753 | 126,619 |
For disclosure on the Group's right-of-use assets, refer to note 16.2.
The carrying amount of loans and borrowings and bank overdrafts concluded under supplier finance arrangements are \u20ac26.2 million as of December 31, 2024 (as of December 31, 2023: \u20ac35.3 million), of which suppliers fully received the payment from the financial institution. The non-cash flows of trade payables substituted by loans and borrowings under the Group's supplier finance arrangements during 2024 amount to \u20ac70.7 million (2023: \u20ac156.3\u00a0million). The extended period provided under supplier financing arrangements increased from 31-60 days to 90-180 days in average.
The financing arrangements of Azelis Group NV and its subsidiaries contain, since September 2021, a financial maintenance covenant, being the total net leverage ratio, which needs to be less than 4.50: 1.00 and is tested twice annually.
As of December 31, 2024, the total net leverage ratio is 2.9: 1.0 (2023: 2.5: 1.0), therefore the Group has complied with the financial covenants. The Group monitors compliance with all covenants on the basis of the monthly reporting process and the continuous cash flow forecasts.
| (in thousands of \u20ac) | Tax Claims | Other provisions | Total |
|---|---|---|---|
| As of January 1 2023 | 2,997 | 5,144 | 8,141 |
| Business combination | 626 | 280 | 906 |
| Provisions made | 648 | 506 | 1,154 |
| Provisions used | -73 | -1,055 | -1,128 |
| Provisions released | -588 | -1,394 | -1,982 |
| Translation differences | -208 | -55 | -263 |
| As of December 31, 2023 | 3,402 | 3,426 | 6,828 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current | 2,226 | 932 | 3,158 |
| Current | 1,176 | 2,494 | 3,670 |
| Total provisions | 3,402 | 3,426 | 6,828 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of January 1 2024 | 3,402 | 3,426 | 6,828 |
| Business combination | 799 | - | 799 |
| Provisions made during the period | 237 | 1,011 | 1,248 |
| Provisions used during the period | -548 | -959 | -1,507 |
| Provisions released during the period | -1,311 | -799 | -2,110 |
| Translation differences | -216 | -40 | -256 |
| As of December 31, 2024 | 2,363 | 2,639 | 5,002 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current | 1,640 | 877 | 2,517 |
| Current | 723 | 1,764 | 2,487 |
| Total provisions | 2,363 | 2,641 | 5,004 |
The provisions relate to tax risks, administrative fines, labor, and commercial matters including claims and litigations, concerning the past and current activities of the Group companies.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade payables | 486,804 | 434,085 |
| Other taxes | 12,199 | 13,032 |
| Employee and social security payables | 69,191 | 71,409 |
| Derivatives | 112 | 3,921 |
| Other payables | 132,261 | 277,023 |
| Total current payables | 700,567 | 799,470 |
| \u00a0 | \u00a0 | \u00a0 |
| Other payables | 33,166 | 69,816 |
| Other non-current liabilities | 33,166 | 69,816 |
The other current and non-current payables mainly consist of put options over non-controlling interests totaling \u20ac81.6 million (2023: \u20ac171.1 million), and earnouts and deferred payments in connection with acquisitions. The decrease in 2024 is mainly attributable to settlement of put option liabilities (Note 21.7).
There are no tax and other contingencies as of December 31, 2024 (for 2023: none). The Group monitors the possible risks and potential implications closely.
The Group has a related party relationship with certain of its subsidiaries, shareholders, managers, executive officers, and associates. The Group has one minor investment in associates, see note 17.
As of December 31, 2024 (and 2023), there are no significant outstanding loans to or from related parties.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Board members (non-executive) | 367 | 350 |
| Other members of key management personnel | \u00a0 | \u00a0 |
| Fixed remuneration | 2,811 | 2,818 |
| Variable remuneration | 1,670 | 1,340 |
| \u00a0 | 4,848 | 4,508 |
Post-employment benefits: Details of the transactions between the Group and its pension plans are disclosed in Note 11.
The following table lists the Group\u2019s subsidiaries:
| Name | Country of incorporation | Type | % of interest 2024 | % of interest 2023 |
|---|---|---|---|---|
| Consolidated companies | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Group NV | Belgium | Non-operating | Parent company | Parent company |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Direct Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Finance NV | Belgium | Non-operating | 100 | 100 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Orkila Alg\u00e9rie spa | Algeria | Operating | 100 | 100 |
| Agspec Australia Pty Ltd | Australia | Operating | 100 | 0 |
| Azelis Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Chemcolour Industries Australia Pty Ltd | Australia | Operating | 100 | 100 |
| TimTechChem Australia Pty Ltd | Australia | Operating | 100 | 100 |
| EB1 Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Specialties Pty Limited | Australia | Operating | 100 | 100 |
| Elle Bee Exports Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Pty Ltd | Australia | Operating | 100 | 100 |
| Chemiplas Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Azelis Austria GmbH | Austria | Operating | 100 | 100 |
| Azelis Benelux N.V. | Belgium | Operating | 100 | 100 |
| Azelis EMEA Hub NV | Belgium | Operating | 100 | 100 |
| Azelis Products International SA | Belgium | Operating | 100 | 100 |
| Azelis Brasil Ltda | Brazil | Operating | 100 | 100 |
| Viveiruz Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 40 | 20 |
| Ybiap\u00ea Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 100 | 100 |
| Vogler Ingredientes Ltda. | Brazil | Operating | 70 | 60 |
| Azelis Bulgaria EAD | Bulgaria | Operating | 100 | 100 |
| Azelis Canada Inc. | Canada | Operating | 100 | 100 |
| Azelis China Ltd | China | Operating | 100 | 100 |
| Azelis (Shanghai) Co. Ltd. | China | Operating | 100 | 100 |
| Azelis (Shanghai) International Trading Co., Ltd | China | Operating | 100 | 100 |
| Azelis Hong Kong Ltd | China | Operating | 100 | 100 |
| CosBond China Ltd | China | Operating | 100 | 100 |
| CosBond (Shanghai) International Trading Co. Ltd | China | Operating | 100 | 100 |
| Azelis Trading Ltd | China | Operating | 100 | 100 |
| Danxia Trading (Shanghai) Co, Ltd | China | Operating | 100 | 100 |
| Guangzhou Danxia Trading Co, Ltd | China | Operating | 100 | 100 |
| Azelis Industrial Chemical Ltd | China | Operating | 100 | 100 |
| Azelis Chemical (Guangzhou) Co. Ltd | China | Operating | 100 | 100 |
| Danxia Tianjin Co. Ltd | China | Operating | 100 | 100 |
| Danxia Shanghai Co. Ltd | China | Operating | Dissolved | 100 |
| Rocsa Colombia S.A. | Colombia | Operating | 100 | 63 |
| CI Inproquim Exports SAS | Colombia | Operating | Dissolved | 63 |
| Localpack S.A. | Colombia | Operating | 100 | 0 |
| Rocsa DCR SA | Costa Rica | Operating | 100 | 63 |
| Soluciones en Innovacion Famaceutica S A S | Colombia | Operating | 100 | 0 |
| Azelis Croatia D.O.O. | Croatia | Operating | 100 | 100 |
| Azelis CEE Holding A.S. | Czech Republic | Operating | 100 | 100 |
| Azelis Czech Republic S.R.O. | Czech Republic | Operating | 100 | 100 |
| Azelis Denmark A/S | Denmark | Operating | 100 | 100 |
| Rocsa RD SA | Dominican Republic | Operating | 100 | 63 |
| Orkila Egypt Chemicals SAE | Egypt | Operating | 99 | 99 |
| Orchem for Import and Export LLC | Egypt | Operating | 49 | 49 |
| Azelis Finland OY | Finland | Operating | 100 | 100 |
| Haarla Oy | Finland | Operating | 100 | 0 |
| Azelis France S.A.S | France | Operating | 100 | 100 |
| Azelis France Holding S.A.S | France | Operating | 100 | 100 |
| BLH SAS | France | Operating | 100 | 100 |
| NATSOE SAS | France | Operating | Merged | 100 |
| Azelis Deutschland GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Holding GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Immobilien GmbH1 | Germany | Operating | Merged | 100 |
| Azelis Deutschland Kosmetik GmbH1 | Germany | Operating | 90 | 90 |
| Azelis Chemicals Ghana Ltd | Ghana | Operating | 100 | 100 |
| Azelis Greece Single Member SA | Greece | Operating | 100 | 100 |
| Rocsa GT SA | Guatemala | Operating | 100 | 63 |
| Azelis Hungary Kft. | Hungary | Operating | 100 | 100 |
| Azelis India Private Ltd | India | Operating | 100 | 100 |
| Ashapura Aromas Private Limited | India | Operating | 70 | 70 |
| PT Azelis Indonesia Distribusi | Indonesia | Operating | 100 | 100 |
| PT Marga Dwi Kencana | Indonesia | Operating | 100 | 0 |
| Azelis Ireland Ltd. | Ireland | Operating | 100 | 100 |
| Azelis Israel Distribution Ltd | Israel | Operating | 100 | 100 |
| Lidorr Elements Ltd; | Israel | Operating | 100 | 100 |
| ProAgro Ltd; | Israel | Operating | 100 | 100 |
| Liad Agro Ltd; | Israel | Operating | 100 | 100 |
| Darbal Ltd. | Israel | Operating | 100 | 100 |
| Azelis Italia Logistica S.r.L | Italy | Operating | 100 | 100 |
| Azelis Italia S.r.L | Italy | Operating | 100 | 100 |
| Eurotrading SpA | Italy | Operating | 100 | 100 |
| Azelis C\u00f4te d'Ivoire S.A. | Ivory Coast | Operating | 100 | 100 |
| Azelis Japan K.K. | Japan | Operating | 100 | 100 |
| Azelis Jordan LLC | Jordan | Operating | 50 | 50 |
| Azelis Kenya Ltd | Kenya | Operating | 100 | 100 |
| Azelis Korea Co. Ltd | Korea | Operating | 100 | 100 |
| Azelis Middle East Africa Holding SAL | Lebanon | Operating | 100 | 100 |
| Azelis Lebanon SAL | Lebanon | Operating | 100 | 100 |
| Azelis International (Offshore) SAL | Lebanon | Operating | 100 | 100 |
| Chempart Polymers SAL Offshore | Lebanon | Operating | 100 | 100 |
| Chemical Partners Middle East SAL | Lebanon | Operating | 100 | 100 |
| Akita Topco S.\u00e0 r.l. | Luxembourg | Non-operating | 100 | 100 |
| Azelis S.A. | Luxembourg | Non-operating | 100 | 100 |
| Azelis Malaysia Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Chemical Solutions Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Azelis Mexico SA de CV | Mexico | Operating | 100 | 100 |
| Azelis Morocco Sarl | Morocco | Operating | 100 | 100 |
| Orkila Invest SA | Morocco | Operating | 100 | 100 |
| Azelis Netherlands B.V. | Netherlands | Operating | 100 | 100 |
| Sirius International Detergents B.V. | Netherlands | Operating | Merged | 100 |
| Sirius International Water Treatment B.V. | Netherlands | Operating | Merged | 100 |
| Azelis Nigeria Specialty Chemicals Ltd | Nigeria | Operating | 100 | 100 |
| Azelis Norway AS | Norway | Operating | 100 | 100 |
| Azelis New Zealand Ltd | New Zealand | Operating | 100 | 100 |
| Chemiplas Agencies Ltd | New Zealand | Operating | Merged | 100 |
| Chemiplas (N.Z.) Ltd | New Zealand | Operating | Merged | 100 |
| Element Trading SAC | Peru | Operating | 100 | 63 |
| Asia Primera Kimika Inc. | Philippines | Operating | 100 | 51 |
| Phil-Asiatic Supply & Services Inc. | Philippines | Operating | 100 | 51 |
| Azelis Poland SP Z.o.o | Poland | Operating | 100 | 100 |
| Hortimex Sp. Z.o.o. | Poland | Operating | 100 | 0 |
| Azelis Romania SRL | Romania | Operating | 100 | 100 |
| Azelis Rus LLC | Russia | Operating | 100 | 100 |
| Azelis Arabia LLC | Saudi Arabia | Operating | 75 | 75 |
| Azelis Senegal SA | Senegal | Operating | 100 | 100 |
| Azelis d.o.o Beograd | Serbia | Operating | 100 | 100 |
| Azelis Singapore Pte. Ltd | Singapore | Operating | 100 | 100 |
| Bellekimia Singapore Pte. Ltd. | Singapore | Operating | 100 | 51 |
| Azelis Slovakia S.R.O. | Slovakia | Operating | 100 | 100 |
| Azelis South Africa Holding (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Azelis South Africa (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Orbichem Petrochemicals (Pty) Ltd | South Africa | Operating | 85 | 85 |
| CPS Chemical (Coatings) (Pty) Ltd | South Africa | Operating | 85 | 0 |
| Azelis Espa\u00f1a S.A. | Spain | Operating | 100 | 100 |
| Azelis Iberica Holding SL. | Spain | Operating | 100 | 100 |
| Azelis Espana Holding SL | Spain | Operating | 100 | 100 |
| Azelis Sweden AB | Sweden | Operating | 100 | 100 |
| Azelis Switzerland AG | Switzerland | Operating | 100 | 100 |
| Azelis Thailand Ltd | Thailand | Operating | 100 | 100 |
| Catalite Co. Ltd | Thailand | Operating | 100 | 51 |
| Azelis Tunisie Sarl | Tunisia | Operating | 100 | 100 |
| Azelis TR Kimya End. Ur.Ith.Ihr.Tic ve San A.S. | Turkey | Operating | 100 | 100 |
| Oktrade Kimya Sanayi ve Ticaret Anonim \u015eirketi | Turkey | Operating | Merged | 0 |
| Da\u011falt\u0131 Kau\u00e7uk ve K\u0130myev\u0130 Maddeler Sanay\u0130 T\u0130caret Anon\u0130m \u015e\u0130rket\u0130 | Turkey | Operating | Merged | 100 |
| Azelis Ukraine LLC | Ukraine | Operating | 100 | 100 |
| Orkila FZE | United Arabic Emirates | Operating | 100 | 100 |
| Azelis UK Holdings Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Finance Ltd | United Kingdom | Operating | 100 | 100 |
| Whitfield Chemical Group Ltd | United Kingdom | Operating | Dissolved | 100 |
| Whitfield Chemical Holdings Ltd | United Kingdom | Operating | Dissolved | 100 |
| WhitChem Ltd | United Kingdom | Operating | Dissolved | 100 |
| ADAPCO LLC | United States | Operating | 100 | 100 |
| Azelis Americas LLC | United States | Operating | 100 | 100 |
| Azelis US Holding Inc. | United States | Operating | 100 | 100 |
| Dewolf Chemical LLC | United States | Operating | 100 | 100 |
| Glenn LLC | United States | Operating | 100 | 100 |
| P.T. Hutchins Company LLC | United States | Operating | 100 | 100 |
| Marcor Development LLC | United States | Operating | 100 | 100 |
| Monson Companies LLC | United States | Operating | 100 | 100 |
| Precision Control Technology LLC | United States | Operating | 100 | 100 |
| Azelis Americas Case LLC | United States | Operating | 100 | 100 |
| Red River Specialties LLC | United States | Operating | 100 | 100 |
| C.L. Zimmerman Co. of Delaware LLC | United States | Operating | 100 | 100 |
| Ross Organic Specialty Sales Inc. | United States | Operating | 100 | 100 |
| Vigon International LLC | United States | Operating | 100 | 100 |
| Gillco Products, LCC | United States | Operating | 100 | 100 |
| Azelis Vietnam Company Ltd | Vietnam | Operating | 100 | 100 |
| MKVN Chemicals Co, Ltd | Vietnam | Operating | 100 | 51 |
| Viet Chemicals Trading and Service Company Limited | Vietnam | Operating | 100 | 51 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Companies accounted for using the equity method | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Chemlog S.A.S. | France | N/A | 50 | 50 |
Part of the growth trajectory of the Group is expansion through strategic acquisitions, complementary to the corporate strategy of organic growth. As of December 31, 2024, the following transaction was not closed, but is expected to close in 2025:
In January 2025, Azelis signed an agreement to acquire assets of a Performance Chemical distributor in Asia Pacific, that will allow the Group to become an intermediate supplier to certain leading suppliers of active pharmaceutical ingredients.
This acquisition is expected to be funded from the Group\u2019s current existing liquidity.
No material subsequent events after December 31, 2024, have been identified that may have had a material or significant effect on the 2024 consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNotesAndOtherExplanatoryInformationExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4956-2": { "value": "Azelis Group NV (the 'Company') is a publicly traded company listed on Euronext Brussels (ticker: AZE) and part of the BEL20 and BEL\u00ae ESG Index. The Company has its registered office and principal place of business at Posthofbrug 12 box 6, 2600 Antwerp, Belgium. Azelis Group NV is registered in Belgium under number 0769.555.240.
The Company acts as the parent company of the Azelis Group, a global group based in Belgium primarily involved in the distribution of specialty chemical products used in the Life Sciences (Personal Care, Home Care & Industrial Cleaning, Pharmaceuticals & Healthcare, Food & Nutrition, Animal Nutrition, and Agricultural & Environmental Solutions, and Flavors & Fragrances) and Industrial Chemicals industry (CASE, Advanced Materials & Additives, Lubricants & Metalworking Fluids, Electronics, Essentials and Fine Chemicals, and Textiles, Leather & Paper).
The consolidated financial statements of the Company for the period January 1, 2024 to December 31, 2024 cover the Company and its subsidiaries (together referred to as the 'Group' or as 'Azelis', being the trade name of the group) and the Group\u2019s interest in associates.
Azelis is well positioned to face challenges across the globe, on the basis of its diversified specialty chemicals portfolio, but also based on its asset-light business model. Azelis' cost base, other than payroll and some other predominantly fixed costs, is mostly variable. Azelis has multiple cost levers that can be activated to mitigate the impact of downturns, which enables it to react rapidly to slumps or economic crises and furthers the Group's resilience.
Due to its global footprint, Azelis is sensitive to economic and geopolitical uncertainty. The Group monitors closely the political events in Russia and Ukraine, Israel, Palestina and neighboring countries and supports its employees throughout the affected regions with a focus on employee safety.
The financial period is the calendar year starting January 1, 2024 and ending December 31, 2024 (hereinafter '2024').
The comparative period is reflecting the financial performance of the Group starting January 1, 2023 and ending December 31, 2023 (hereinafter '2023').
The consolidated financial statements are presented in euros, which is the Group\u2019s presentation currency. The Group companies determine their functional currency based on the primary economic environment in which they operate. The main indicators to determine the functional currency is the currency of the sales, expenses and financing activities.
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Due to its global footprint, Azelis is sensitive to economic and geopolitical uncertainty. The Group monitors closely the political events in Russia and Ukraine, Israel, Palestina and neighboring countries and supports its employees throughout the affected regions with a focus on employee safety.
The consolidated financial statements for the period ended December 31, 2024, were authorized for issue by the Board of Directors on March 4, 2025, and will be submitted for approval to the Shareholders' Meeting to be held on May 8, 2025.
The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted in the European Union (IFRS). The Group has consistently applied the accounting policies as set out below to all periods presented in these consolidated financial statements. Changes to the accounting policies in the current year are limited to the changes in IFRS below and are applied starting on January 1, 2024.
The following standards and amendments to standards are mandatory for the first time in the financial year beginning January 1, 2024, and have been endorsed by the European Union:
Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current liabilities with covenants
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier Finance Arrangements
Amendments to IFRS 16 Leases - Lease Liability in Sale and Leaseback
Their adoption has not had any material impact on the amounts reported in these financial statements. The adoption of the amendments to IAS 7 and IFRS 7 resulted in increased disclosures for liabilities under supplier financing arrangements as well as the associated cash flows in the consolidated financial statements for the year ending December 31, 2024.
Certain new standards and amendments have been published but are not mandatory for reporting periods ended December 31, 2024, and have not yet been adopted by the Group. These standards and amendments are not expected to have a material impact on the financial statements of the Group in future reporting periods, except for the adoption of IFRS 18.
IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after January 1, 2027) will replace IAS 1 Presentation of Financial Statements, introducing new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of financial performance and providing management-defined performance measures within the financial statements. Management is currently assessing the implications of applying the new standard on the Group\u2019s consolidated financial statements.
This Integrated Report is required to be published in the European Single Electronic Format, as determined by and according to the requirements set out in the Commission Delegated Regulation (EU) 2019/815 of December 17, 2018, supplementing Directive 2004/109/EC. The PDF version of the Integrated Report is not ESEF-compliant and has been solely prepared for ease of use of readers. The Group's official reporting package in ESEF can be found on the Group's website.
With its application and formulating labs, the Company is well positioned to support its customers with many new formulations that are necessitated as a result of changing conditions. Azelis is helping its customers and its principals to respond to climate-changes, and to achieve their sustainability goals by, for example, promoting sustainable products and product development, encouraging sustainable formulation creation in its labs, and assessing its principals and implementing corporate social responsibility due diligence procedures when selecting and onboarding principals. Over the recent years, the Company has rapidly increased its percentage of revenue covered with ESG assessed suppliers.
Alongside sustainability, innovation and digitalization form the pillars of Azelis\u2019 strategy for creating value: investments in innovation centers, application and formulating labs, e-Labs, principal portals and customer portals are helping to accelerate the supply of sustainable products.
As a specialty chemicals distributor, the Company has an asset-light business model, outsourcing to the extent possible capital-intensive aspects such as logistics and warehouse operations. Next to outsourcing, it has a focus on leasing warehouses and offices and, as such, has a limited number of owned properties. Having limited impact capacity, the Company does undertake initiatives to reduce its climate impact where possible: reduction of carbon emissions (eg. electrification of company car fleet and warehouse fleet), reduction of energy consumption (eg. installation of solar panels, switching to LED light bulbs), reduction of water consumption, reduction of waste, etc.
As from December 2023, the Company has been included in Euronext\u2019s BEL\u00aeESG Index as one of the 20 listed companies in Belgium that demonstrate the best ESG practices. This recognizes Azelis\u2019 commitment to a sustainable future and is a testament to its leadership in sustainability. The BEL\u00aeESG Index identifies and tracks the 20 highest-ranking companies in Belgium that demonstrate the lowest environmental, social and governance (ESG) risks. It also serves investors as a reference to better identify those companies that focus on a more sustainable future by combining economic results with sustainability goals. Also, Morningstar Sustainalytics \u2013 a global leader in ESG research and data - grants Azelis the top industry ESG ranking.
In addition to the above, and supported by its asset-light business model, Azelis\u2019 revenue mix is very diversified across its end markets and geographies, across the number of principals and customers, and across its products. Therefore, there is limited concentration risk, also regarding any related climate risks. In 2024 the Company has finalized its physical climate risk assessment, concluding that the potential business consequence of this risk is limited as sufficient mitigation measures are in place. Refer to section E1 climate change in the sustainability statements for further detail on the Company's climate risk assessment.
In preparation of its consolidated financial statements, the Company has considered the impact of climate change mainly for the following areas where climate change generally is expected to have the largest impact:
Significant judgments, major sources of estimation uncertainty & accounting policies (refer to note 3): Climate change does not substantially impact the significant judgments made by the Company, nor its major sources of estimation uncertainty, specifically taking into account the Company\u2019s asset-light business model and its diversified revenue mix across markets, geographies, products, principals and customers.
Impairment of non-financial assets: In assessing the recoverable amounts to assess both the impairment of non-financial assets such as property, plant and equipment, right-of-use assets, intangible assets, as well as goodwill, the Company did not identify climate change related matters to have a significant impact, also driven by its portfolio diversification.
Useful lives of tangible and intangible assets: Any impact from climate change or climate-related initiatives undertaken by the Company does not have a significant impact on the useful lives of its assets. As an example, the Company is electrifying its company car and warehouse fleets but approaches this from a phase-out scenario for its fossil fuel vehicles.
Provisions: The Company is not significantly exposed to provisions or contingent liabilities arising from potential litigation, regulatory requirements to remediate environmental damage, additional levies or penalties related to environmental requirements as well as contracts that may become onerous, or restructurings to achieve climate-related targets, based on its asset-light business model and its diversification of supplier portfolio combined with the continuously increasing percentage of revenues covered by ESG assessed suppliers.
Sustainable finance: For the Term and Revolving Facilities agreement concluded in September 2024, sustainability adjustments may be included at the latest as from September 2025. For the progress of the Company's sustainability KPIs, refer to the Sustainability review of this Integrated Report.
Share-based payments: As described in note 11.3, one of the share-based payment plans' performance conditions relates to the Company\u2019s reduction of carbon emissions to be assessed over the vesting period of three years.
The financial period is the calendar year starting January 1, 2024 and ending December 31, 2024 (hereinafter '2024').
The comparative period is reflecting the financial performance of the Group starting January 1, 2023 and ending December 31, 2023 (hereinafter '2023').
The consolidated financial statements incorporate the financial statements of the Company and all entities controlled by the Company as at December 31, 2024. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
Subsidiaries are entities controlled by the Company. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has:
Power over the investee (i.e. existing rights to direct relevant activities)
Exposure, or rights, to variable returns from its involvement in the investee
The ability to use its power to affect the investee\u2019s returns
Generally, there is a presumption that having a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee.
Non-controlling interests in subsidiaries are identified separately from the Group\u2019s equity therein. The interests of non-controlling shareholders may be initially measured at fair value or at the non-controlling interests\u2019 proportionate share of the fair value of the acquiree\u2019s identifiable net assets. A choice of measurement is made on an acquisition-by-acquisition basis. For its current non-controlling interests in subsidiaries, the Group has opted to measure at the proportionate share of the acquiree's identifiable net assets. After acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction between shareholders.
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred for each acquisition is measured at the aggregate of the fair values on the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments.
The acquiree\u2019s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition on the balance sheet are recognized at their fair value on the acquisition date, except for deferred tax assets or liabilities, and liabilities and assets related to employee benefit arrangements.
The difference between the fair value of the consideration transferred and the fair value of the identified assets, liabilities and contingent consideration is recorded as goodwill. If the fair value of the net assets acquired exceeds the aggregate consideration transferred, this purchase bargain is included in the profit or loss, after the Group has re-assessed whether it has correctly identified all of the assets acquired and all of the liabilities assumed. Acquisition-related costs are recognized in profit or loss as incurred.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed on the acquisition date that, if known, would have affected the amounts recognized on that date. The measurement period to finalize the valuations is subject to a maximum of one year after the acquisition date.
Associates are entities over which the Group has significant influence, but no control. Significant influence is the power to participate in the financial and operating policy decisions of the investee.
Associates are accounted for under the equity method and are recognized initially at cost as adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate. The Group\u2019s investment includes goodwill on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group\u2019s share of the income and expense and the equity movements of the investments accounted within equity, after aligning the accounting policies to those of the Group, from the day significant influence commences until the day significant influence ceases. When the Group\u2019s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to zero, and no further losses are recognized except for losses arising from the Group\u2019s obligation or payments on behalf of the investee.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in other reserves within equity attributable to owners.
When the Group ceases to consolidate or equity-account for an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
The consolidated financial statements are presented in euros, which is the Group\u2019s presentation currency. The Group companies determine their functional currency based on the primary economic environment in which they operate. The main indicators to determine the functional currency is the currency of the sales, expenses and financing activities.
The Group operates in different currency environments, but mainly in EUR and USD. Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates on the date of the transaction. Monetary assets and liabilities denominated in foreign currency on the reporting date are translated to the functional currency of the entity at the exchange rate that date. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated to the functional currency of the entity at the exchange rate on the date that the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Foreign currency differences arising from this operational translation are recognized in the income statement.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from acquisition, are translated to euros at exchange rates on the reporting date. The income and expenses of foreign operations are translated to euros at average exchange rates.
Foreign currency differences are recognized in other comprehensive income and accumulated in equity. These differences have been recognized in the translation reserve. When the Group loses control over a foreign operation, the accumulated foreign translation amount of the subsidiary is transferred from equity to the profit or loss.
Foreign exchange gains and losses arising from a monetary item to be received from or paid to a foreign operation for which the settlement is neither planned nor likely to occur in the foreseeable future are included in the value of net investment in a foreign operation and recognized directly in equity in the translation reserve.
Non-monetary assets and liabilities, equity and the income statement of subsidiaries operating in hyperinflationary economies are restated for changes in the general purchasing power of the local currency applying a general price index. These re-measured amounts are used for conversion into the Group reporting currency at the period closing exchange rate. As a result, the balance sheet and net results of subsidiaries operating in hyperinflation economies are stated in terms of the measuring unit current at the end of the reporting period. In accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates, multinational companies that have subsidiaries with the hyperinflationary currency as their functional currency are not required to restate comparative amounts as those were presented previously in a stable currency.
Since 2022, the Group has applied hyperinflation accounting for its subsidiaries having their functional currency in Turkish lira. The relevant price index used for the restatement of the financial statements of Azelis' Turkish subsidiaries is the consumer price index (CPI) based on data of the Turkish Statistical Institute. The consumer price index and the exchange rate between euros and the Turkish lira have changed in 2023 and 2024 as follows:
| Year (31st December) | Turkey CPI | Change (%) | EUR/TRL exchange rate |
| 2023 | 18.59 | 64.77% | 32.69 |
| 2024 | 26.85 | 44.38% | 36.74 |
The carrying amounts of the Group\u2019s non-current non-financial assets are reviewed on each reporting date to determine whether there is any indication of impairment. If any such indication exists, the Group performs an impairment test. For goodwill and intangible assets with indefinite lives, an impairment test is performed every year.
The recoverable amount of an asset or cash-generating unit is the higher of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future pre-tax 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. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the 'cash-generating unit'). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to (groups of) cash-generating units that are expected to benefit from the synergies of the combination.
Corporate assets are assets that do not generate cash inflows independently, and their carrying amounts need to be allocated to the cash-generating units on a reasonable and consistent basis. If a corporate asset cannot be allocated to cash-generating units on a reasonable and consistent basis, the Group performs the goodwill impairment test in two stages: first on the level of the cash-generating units, and secondly on the level of the smallest group of cash-generating units to which the corporate asset can be allocated on a reasonable and consistent basis.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in the income statement. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis.
An impairment loss in respect of goodwill will not be reversed afterwards. In respect of other assets, impairment losses recognized in prior periods are assessed on each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. 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 or amortization, if no impairment loss had been recognized.
Goodwill is initially measured at cost, the excess of the aggregate of the consideration transferred and the amount recognized for the assets acquired and liabilities assumed in a business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. In the event of disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Research activity expenses, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in the income statement when incurred.
Development expenses for which the Group has the technical feasibility, intention and means to complete the intangible assets and the economic future benefits of the assets will flow to the Group are capitalized at cost.
Other intangible assets with finite useful lives are measured at cost, less accumulated amortization and accumulated impairment losses. Amortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date when the asset is ready for use. The estimated useful lives of intangible assets and their residual value (if applicable) are reviewed every year.
The estimated useful lives for the current and comparative period are as follows:
| Intangible assets | Economic lifetime |
|---|---|
| Trademarks and brands | Indefinite |
| Customer lists | 5 to 10 years |
| Distribution rights | 20 years |
| Other intangible assets | 3 to 7 years |
Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Components of property, plant and equipment with separate useful lives are accounted for as separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the net proceeds from disposal with the carrying amount of property, plant and equipment and are recognized in other income or other expenses in the income statement.
Depreciation is recognized in the income statement on a straight-line basis over the estimated useful lives of each component of property, plant and equipment to their residual values. Leasehold improvements are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.
The estimated useful lives for the current and comparative period are as follows:
| Property, plant and equipment | Economic lifetime |
|---|---|
| Buildings | 20 to 33 years |
| Plant and equipment | 5 to 10 years |
| Other property, plant and equipment | 5 to 10 years |
Depreciation methods, useful lives and residual values are reviewed on each reporting date.
Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease liabilities include the net present value of the following lease payments:
fixed payments, less any lease incentives receivable
variable lease payment that are based on an index or a rate, initially measured using the index or rate on the commencement date
amounts expected to be payable by the Group under residual value guarantees
the exercise price of a purchase option if the Group is reasonably certain to exercise that option
payments of penalties for terminating the lease, if the term reflects the Group exercising that option
The Group elects to not to separate non-lease components from lease components, and instead accounts for each lease component and any associated non-lease components as a single lease component.\u00a0
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period, so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost, comprising the following:
the amount of the initial measurement of lease liability
any lease payments made on or before the commencement date, less any lease incentives received
any initial direct costs
restoration costs
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercising a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate on the effective date of the modification
Financial assets and liabilities are classified into three categories: measured at amortized cost, at fair value through other comprehensive income (FVTOCI) and at fair value through profit and loss (FVTPL).
The Group recognizes financial instruments when it enters into a contract. Financial instruments are derecognized when the contractual rights to the cash flows of the asset expire, or the rights to receive the contractual cash flows on the financial asset are transferred in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. With regard to its trade receivables, the Group engages in non-recourse factoring programs. Receivables are derecognized when the factor pays the Group, which also triggers a fee to be paid for the credit risk assumed by the factor. Factoring fees are recognized in the Group's financial expenses.
Initially, financial instruments are recognized at their fair value. Transaction costs directly attributable to the acquisition or issue of financial instruments are recognized on the initial measurement date, except for financial instruments measured at FVTPL. Transaction costs related to FVTPL financial instruments are recorded in the profit or loss at initial recognition.
The classification of financial assets is based on two criteria: the objective of the Company's business model for managing the assets, and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' on the principal amount outstanding (known as the 'SPPI-test').
Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components, when they are recognized at fair value. The Group holds trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method. Other receivables are initially measured at fair value and subsequently measured at amortized cost.
Trade and other payables are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. Loans and borrowings are initially recognized at fair value, net of transaction costs incurred. Loans and borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
An exchange between an existing borrower and lender of financial liabilities with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.
The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. However, costs or fees that are incremental and directly related to the issue of the new debt instrument are treated as transaction costs of the new liability, and hence are spread forward by adjusting the effective interest rate.
The Group uses derivative financial instruments such as forward exchange contracts, interest rate swaps to hedge its foreign currency risk and interest rate risk, and interest rate cap to hedge its interest rate risks associated with floating-rate borrowings under the Group\u2019s credit facilities.
Derivatives are initially recognized as other financial assets at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value through profit and loss at the end of each reporting period. The derivative is only used for economic hedging purposes and not as a speculative investment.\u00a0 The Group does not apply hedge accounting. Therefore, changes in the fair value of the Group\u2019s derivative financial instrument are recognized immediately in the consolidated statement of profit or loss and are included in finance costs.
The Group has granted put options for remaining non-controlling interests in acquired companies, giving the holders the right to sell to the Group their investments in these subsidiaries. These financial liabilities do not bear interest. In accordance with IAS 32, the Group recognizes a redemption liability corresponding to the present value of the estimated exercise price of the option. The redemption liability is included in other current and non-current liabilities, and the counterpart is a reduction from the Group's equity. At the end of each reporting period, the liability is adjusted to reflect changes in the estimated exercise price. These subsequent changes are accounted for in the income statement.
If the Group has also obtained a call option on the same remaining non-controlling interests of the acquired companies, this option is taken into account for the control assessment in respect of the business combination.
The cash outflow for acquisition of non-controlling interest due to call/put option settlement is included in the financing activities of the consolidated statement of cash flows.
The Group classifies financial liabilities that arise from supplier finance arrangements within loans and borrowings and bank overdrafts in the statement of financial position if they have a similar nature and function to bank loans and bank overdrafts. This is the case if the supplier finance arrangement is part of the financing used in the Group\u2019s normal operating cycle, the level of security provided is similar to bank loans and the terms of the liabilities of the supplier finance arrangement are extended compared to trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in loans and borrowings in the consolidated statement of financial position are included in financing activities in the consolidated statement of cash flows.
The Group recognizes an allowance for expected credit losses (ECLs) for all financial assets that are not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
The impairment methodology applied depends on whether there has been a significant increase in credit risk; if so, the loss allowance is measured as the lifetime expected credit loss. If not, the allowance is measured as the 12-month expected credit loss. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the receivables (see note 4.1 for further details). While cash and cash equivalents and other loan receivables are also subject to the impairment requirements of IFRS 9, no impairment loss was identified as these assets are considered as low-credit risk.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses of financial assets are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
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.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the income statement unless it relates to items recognized in other comprehensive income, in which case it is recognized in other comprehensive income.
Current tax is the expected tax payable (receivable) on the taxable income (loss) for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
The Group applies the first-in, first-out (FIFO) method to represent inventory movements. Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises direct materials, direct labor and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Impairments of inventories to net realizable value are recognized in the profit or loss as part of \u2018cost for goods and consumables\u2019. If the value of impaired inventories increases, the impairment will be reversed to the lowest of the increased net realizable value and the original cost.
Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary shares and share options are recognized in equity net of tax.
The share premium consists of additional paid-in capital exceeding the par value of outstanding shares.
Treasury share purchases are recognized as a deduction from equity (section other reserves). No gain or loss is recognized on the purchase, sale, issue or cancellation of treasury shares. Consideration paid or received is recognized directly in equity.
The Group operates several defined benefit pension plans.
The liability or asset recognized in the balance sheet of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period, less the fair value of plan assets. The defined benefit obligation is calculated annually by independent qualified actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows, using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in finance expense in the income statement. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the income statement as past service costs.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
The cost of all short-term employee benefits, such as salaries, holiday pay, bonuses, medical aid and other contributions, are recognized during the period in which the employee renders the related service. The Group recognizes those costs only when it has a present legal or constructive obligation to make such payment and a reliable estimate of the liability can be made.
The Group\u2019s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Other long-term employee benefits are calculated using the projected unit credit method. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.
The Group has performance share plans for key management, qualifying as equity-settled share-based payment plans. Equity-settled share-based payment transactions are transactions in which the entity receives goods or services in exchange for its own equity instruments (e.g. shares, options).
Goods or services received in equity-settled share-based payment transactions are measured at their fair value, unless they cannot be estimated reliably, in which case they are determined in accordance with the fair value of the equity instruments granted. The fair value is determined on the grant date, and the value incorporates market conditions using a Monte Carlo calculation. This value remains unchanged over the vesting period. Service conditions and non-market conditions do not affect the fair value of the instruments granted, but are taken into account by adjusting the number of equity instruments included in the measurement of the transaction, an estimate which is revised on each reporting date until the vesting period has lapsed. Azelis accounts for the equity-settled share-based payment transaction in the other reserves section of the equity, and its initial recognition and subsequent changes are accounted for in employee expenses.
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 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 the risks specific to the liability. Unwinding of the discount of provisions is recorded as financial expenses.
Revenue from product sales is recognized when the performance obligation is satisfied, i.e. when the customer obtains control over the promised goods. For the Group, control transfer is generally driven by the agreed upon incoterm. Revenue is measured at the fair value of the consideration received, net of returns, trade discounts and volume rebates. Revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur.
When the outcome of a commission transaction can be estimated reliably, revenue associated with the transaction is recognized by reference to the stage of completion of the transaction at the end of the reporting period. When the Group acts in the capacity of an agent rather than as a principal in a transaction, the revenue recognized is the net amount of commission made by the Group. The Group acts as an agent when it does not take title and is not exposed to risks of the goods, when the risks are borne by the supplier and when the selling prices are set by the suppliers.
An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group\u2019s other components. The segmentation used by the Group is based on geography, organization and management structure, and commercial interdependencies.
Segment results that are reported to the CEO include items directly attributable to a segment, as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly head office expenses and income tax assets and liabilities, and are presented in a separate reporting unit \u2018Group holding & other\u2019.
The reporting segments used are defined as follows:
EMEA: all operating companies in Europe, Middle East and Africa
Americas: all operating companies in the United States of America, Canada, Mexico and South America (mainly Colombia and Brazil)
Asia Pacific: all operating companies in Asia, South-East Asia and the Pacific region
Group holding & other: all non-operating companies, including the corporate service center and headquarters in Belgium
Government grants are recognized in profit or loss on a systematic basis over the periods in which the entity recognizes as expenses the related expenses for which the grants are intended to compensate. Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.
The consolidated statement of cash flows is prepared using the indirect method. Cash is defined as cash and cash equivalents, less bank overdrafts. Cash flows are presented separately in the statement of cash flows as cash flows from operating activities, investing activities and financing activities.
A number of the Group\u2019s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
The fair value of property, plant and equipment recognized as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm\u2019s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
The fair value of trademarks and distribution rights acquired in business combinations are measured using the income approach (relief from royalty and multi-period excess earning method, respectively). The fair value of other intangible assets is mainly based on the cost approach.
The fair value of inventories is determined based on their estimated selling price in the ordinary course of business, less the estimated costs of completion and sale.
The fair value of financial assets at FVTPL and FVTOCI financial assets is determined by reference to their quoted bid price on the reporting date. If no market prices are available, the instruments are measured using the present value of the expected future cash flows, discounted at the market rate of interest on the measurement date.
The fair value of trade and other receivables is determined as the present value of future cash flows, discounted at the market rate of interest on the measurement date.
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract, using a risk-free interest rate increased by an appropriate additional spread related to the credit risk of the Group and the risk of the counterparty.
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at measurement date, including the Group\u2019s credit risk.
The fair value of contingent consideration qualifying as earnout, recognized in relation to business combinations, is calculated based on a forecast of the underlying performance measure (generally EBIT(D)A) and is discounted at the market rate of interest on the measurement date. The fair value of contingent consideration constituting a mere fixed deferred payment is determined as the present value of future cash flows and discounted at the market rate of interest on the measurement date.
The redemption value of put options on non-controlling interests, recognized in relation to business combinations, is calculated based on specific contractual specifications, consisting mostly of a combination of a multiple on a future performance measure and the balance of certain net working capital items upon exercise of the option.
Assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: valuation techniques for which all inputs which have a significant effect on the recorded fair value are observable for the asset or liability, either directly or indirectly
Level 3: valuation techniques for which all inputs which have a significant effect on the recorded fair value are not based on observable market data
In the process of applying accounting policies and preparing the consolidated financial statements, the Group has made certain judgments (other than those involving estimates) that affect the reported amounts of assets and liabilities, income and expenses.
In addition, the Group is required to make certain estimates and assumptions that affect the measurement and presentation of reported figures. Estimates are based on past experience and on additional knowledge obtained on transactions to be reported, and are reviewed on an ongoing basis. Actual amounts may differ from these estimates. The most critical accounting judgments and estimates related to uncertainties with significant risk of causing material adjustment and applied in the consolidated financial statements are described below:
The Group has judged that the Azelis trademark has an indefinite useful life. As a consequence, the trademark is not amortized. On each reporting date, the Group reviews this judgment and assesses whether the circumstances continue to support the indefinite useful life. The trademark is part of the yearly impairment test. (See note 15).
In assessing the realization of deferred tax assets, management considers the extent to which it is probable that the deferred tax asset will be realized (note 14). The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profit during the periods in which those temporary differences and tax loss carry forwards are available. Management considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. (See note 14.2)
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended. (See note 16.2)
Under supplier finance arrangements, trade payables are transferred by the Group to a financial institution who assumes its creditor obligations. Following this transfer, the Group will no longer be to offset any of the transferred payables against credit notes received from the supplier.
For the purpose of the consolidated statement of cash flows, management considers that the finance provider settles the invoices as a payment agent on behalf of the entity. The payments made by the finance provider are therefore presented as operating cash outflows and financing cash inflows in equal but opposite amounts at the point when the finance provider pays the supplier. When the Group subsequently pays the amount outstanding to the finance provider, this is presented as a financing cash outflow.
In a business combination, the acquired assets and liabilities are measured at fair value. The Group uses assumptions and non-observable information to prepare fair value of the assessed, where no observable information is available. The actual market performance can subsequently differ from the assumptions. The most important assumptions are disclosed in the note for business combinations. (See note 7).
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash-generating unit (CGU) is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period, incorporating estimates for sales growth and margin growth. Cash flows beyond the five-year period are extrapolated using the estimated growth rates. These growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates. (See note 15.2).
", "dimensions": { "concept": "ifrs-full:DisclosureOfMaterialAccountingPolicyInformationExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i4965-1": { "value": "The consolidated financial statements for the period ended December 31, 2024, were authorized for issue by the Board of Directors on March 4, 2025, and will be submitted for approval to the Shareholders' Meeting to be held on May 8, 2025.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAuthorisationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i4965-2": { "value": "The consolidated financial statements for the period ended December 31, 2024, were authorized for issue by the Board of Directors on March 4, 2025, and will be submitted for approval to the Shareholders' Meeting to be held on May 8, 2025.
Part of the growth trajectory of the Group is expansion through strategic acquisitions, complementary to the corporate strategy of organic growth. As of December 31, 2024, the following transaction was not closed, but is expected to close in 2025:
In January 2025, Azelis signed an agreement to acquire assets of a Performance Chemical distributor in Asia Pacific, that will allow the Group to become an intermediate supplier to certain leading suppliers of active pharmaceutical ingredients.
This acquisition is expected to be funded from the Group\u2019s current existing liquidity.
No material subsequent events after December 31, 2024, have been identified that may have had a material or significant effect on the 2024 consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEventsAfterReportingPeriodExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i4966-1": { "value": "The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted in the European Union (IFRS). The Group has consistently applied the accounting policies as set out below to all periods presented in these consolidated financial statements. Changes to the accounting policies in the current year are limited to the changes in IFRS below and are applied starting on January 1, 2024.
The following standards and amendments to standards are mandatory for the first time in the financial year beginning January 1, 2024, and have been endorsed by the European Union:
Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current liabilities with covenants
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier Finance Arrangements
Amendments to IFRS 16 Leases - Lease Liability in Sale and Leaseback
Their adoption has not had any material impact on the amounts reported in these financial statements. The adoption of the amendments to IAS 7 and IFRS 7 resulted in increased disclosures for liabilities under supplier financing arrangements as well as the associated cash flows in the consolidated financial statements for the year ending December 31, 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfPreparationOfFinancialStatementsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i4966-2": { "value": "The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted in the European Union (IFRS). The Group has consistently applied the accounting policies as set out below to all periods presented in these consolidated financial statements. Changes to the accounting policies in the current year are limited to the changes in IFRS below and are applied starting on January 1, 2024.
The following standards and amendments to standards are mandatory for the first time in the financial year beginning January 1, 2024, and have been endorsed by the European Union:
Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current liabilities with covenants
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier Finance Arrangements
Amendments to IFRS 16 Leases - Lease Liability in Sale and Leaseback
Their adoption has not had any material impact on the amounts reported in these financial statements. The adoption of the amendments to IAS 7 and IFRS 7 resulted in increased disclosures for liabilities under supplier financing arrangements as well as the associated cash flows in the consolidated financial statements for the year ending December 31, 2024.
Certain new standards and amendments have been published but are not mandatory for reporting periods ended December 31, 2024, and have not yet been adopted by the Group. These standards and amendments are not expected to have a material impact on the financial statements of the Group in future reporting periods, except for the adoption of IFRS 18.
IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after January 1, 2027) will replace IAS 1 Presentation of Financial Statements, introducing new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of financial performance and providing management-defined performance measures within the financial statements. Management is currently assessing the implications of applying the new standard on the Group\u2019s consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i4966-3": { "value": "The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted in the European Union (IFRS). The Group has consistently applied the accounting policies as set out below to all periods presented in these consolidated financial statements. Changes to the accounting policies in the current year are limited to the changes in IFRS below and are applied starting on January 1, 2024.
The following standards and amendments to standards are mandatory for the first time in the financial year beginning January 1, 2024, and have been endorsed by the European Union:
Amendments to IAS 1 Presentation of Financial Statements - Classification of Liabilities as Current or Non-current and Non-current liabilities with covenants
Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures - Supplier Finance Arrangements
Amendments to IFRS 16 Leases - Lease Liability in Sale and Leaseback
Their adoption has not had any material impact on the amounts reported in these financial statements. The adoption of the amendments to IAS 7 and IFRS 7 resulted in increased disclosures for liabilities under supplier financing arrangements as well as the associated cash flows in the consolidated financial statements for the year ending December 31, 2024.
Certain new standards and amendments have been published but are not mandatory for reporting periods ended December 31, 2024, and have not yet been adopted by the Group. These standards and amendments are not expected to have a material impact on the financial statements of the Group in future reporting periods, except for the adoption of IFRS 18.
IFRS 18 Presentation and Disclosure in Financial Statements (effective for annual periods beginning on or after January 1, 2027) will replace IAS 1 Presentation of Financial Statements, introducing new requirements that will help to achieve comparability of the financial performance of similar entities and provide more relevant information and transparency to users. Even though IFRS 18 will not impact the recognition or measurement of items in the financial statements, its impacts on presentation and disclosure are expected to be pervasive, in particular those related to the statement of financial performance and providing management-defined performance measures within the financial statements. Management is currently assessing the implications of applying the new standard on the Group\u2019s consolidated financial statements.
", "dimensions": { "concept": "ifrs-full:DisclosureOfChangesInAccountingPoliciesAccountingEstimatesAndErrorsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i4966-4": { "value": "The consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as adopted in the European Union (IFRS). The Group has consistently applied the accounting policies as set out below to all periods presented in these consolidated financial statements. Changes to the accounting policies in the current year are limited to the changes in IFRS below and are applied starting on January 1, 2024.
", "dimensions": { "concept": "ifrs-full:StatementOfIFRSCompliance", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4974-1": { "value": "The consolidated financial statements incorporate the financial statements of the Company and all entities controlled by the Company as at December 31, 2024. All intra-Group transactions, balances, income and expenses are eliminated on consolidation.
Subsidiaries are entities controlled by the Company. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has:
Power over the investee (i.e. existing rights to direct relevant activities)
Exposure, or rights, to variable returns from its involvement in the investee
The ability to use its power to affect the investee\u2019s returns
Generally, there is a presumption that having a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee.
Non-controlling interests in subsidiaries are identified separately from the Group\u2019s equity therein. The interests of non-controlling shareholders may be initially measured at fair value or at the non-controlling interests\u2019 proportionate share of the fair value of the acquiree\u2019s identifiable net assets. A choice of measurement is made on an acquisition-by-acquisition basis. For its current non-controlling interests in subsidiaries, the Group has opted to measure at the proportionate share of the acquiree's identifiable net assets. After acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction between shareholders.
Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred for each acquisition is measured at the aggregate of the fair values on the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments.
The acquiree\u2019s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition on the balance sheet are recognized at their fair value on the acquisition date, except for deferred tax assets or liabilities, and liabilities and assets related to employee benefit arrangements.
The difference between the fair value of the consideration transferred and the fair value of the identified assets, liabilities and contingent consideration is recorded as goodwill. If the fair value of the net assets acquired exceeds the aggregate consideration transferred, this purchase bargain is included in the profit or loss, after the Group has re-assessed whether it has correctly identified all of the assets acquired and all of the liabilities assumed. Acquisition-related costs are recognized in profit or loss as incurred.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed on the acquisition date that, if known, would have affected the amounts recognized on that date. The measurement period to finalize the valuations is subject to a maximum of one year after the acquisition date.
Associates are entities over which the Group has significant influence, but no control. Significant influence is the power to participate in the financial and operating policy decisions of the investee.
Associates are accounted for under the equity method and are recognized initially at cost as adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate. The Group\u2019s investment includes goodwill on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group\u2019s share of the income and expense and the equity movements of the investments accounted within equity, after aligning the accounting policies to those of the Group, from the day significant influence commences until the day significant influence ceases. When the Group\u2019s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to zero, and no further losses are recognized except for losses arising from the Group\u2019s obligation or payments on behalf of the investee.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in other reserves within equity attributable to owners.
When the Group ceases to consolidate or equity-account for an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBasisOfConsolidationExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4975-1": { "value": "Subsidiaries are entities controlled by the Company. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has:
Power over the investee (i.e. existing rights to direct relevant activities)
Exposure, or rights, to variable returns from its involvement in the investee
The ability to use its power to affect the investee\u2019s returns
Generally, there is a presumption that having a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSubsidiariesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4975-2": { "value": "Subsidiaries are entities controlled by the Company. Control is achieved when the Company is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns through its power over the investee. Specifically, the Company controls an investee if, and only if, the Company has:
Power over the investee (i.e. existing rights to direct relevant activities)
Exposure, or rights, to variable returns from its involvement in the investee
The ability to use its power to affect the investee\u2019s returns
Generally, there is a presumption that having a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee.
Associates are entities over which the Group has significant influence, but no control. Significant influence is the power to participate in the financial and operating policy decisions of the investee.
Associates are accounted for under the equity method and are recognized initially at cost as adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate. The Group\u2019s investment includes goodwill on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group\u2019s share of the income and expense and the equity movements of the investments accounted within equity, after aligning the accounting policies to those of the Group, from the day significant influence commences until the day significant influence ceases. When the Group\u2019s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to zero, and no further losses are recognized except for losses arising from the Group\u2019s obligation or payments on behalf of the investee.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithRelatedPartiesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4976-1": { "value": "Non-controlling interests in subsidiaries are identified separately from the Group\u2019s equity therein. The interests of non-controlling shareholders may be initially measured at fair value or at the non-controlling interests\u2019 proportionate share of the fair value of the acquiree\u2019s identifiable net assets. A choice of measurement is made on an acquisition-by-acquisition basis. For its current non-controlling interests in subsidiaries, the Group has opted to measure at the proportionate share of the acquiree's identifiable net assets. After acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial recognition plus the non-controlling interests\u2019 share of subsequent changes in equity. Total comprehensive income is attributed to non-controlling interests even if this results in the non-controlling interests having a deficit balance.
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction between shareholders.
The Group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the Group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in other reserves within equity attributable to owners.
When the Group ceases to consolidate or equity-account for an investment because of a loss of control, joint control or significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to profit or loss.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTransactionsWithNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4977-1": { "value": "Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred for each acquisition is measured at the aggregate of the fair values on the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments.
The acquiree\u2019s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition on the balance sheet are recognized at their fair value on the acquisition date, except for deferred tax assets or liabilities, and liabilities and assets related to employee benefit arrangements.
The difference between the fair value of the consideration transferred and the fair value of the identified assets, liabilities and contingent consideration is recorded as goodwill. If the fair value of the net assets acquired exceeds the aggregate consideration transferred, this purchase bargain is included in the profit or loss, after the Group has re-assessed whether it has correctly identified all of the assets acquired and all of the liabilities assumed. Acquisition-related costs are recognized in profit or loss as incurred.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed on the acquisition date that, if known, would have affected the amounts recognized on that date. The measurement period to finalize the valuations is subject to a maximum of one year after the acquisition date.
The Group has granted put options for remaining non-controlling interests in acquired companies, giving the holders the right to sell to the Group their investments in these subsidiaries. These financial liabilities do not bear interest. In accordance with IAS 32, the Group recognizes a redemption liability corresponding to the present value of the estimated exercise price of the option. The redemption liability is included in other current and non-current liabilities, and the counterpart is a reduction from the Group's equity. At the end of each reporting period, the liability is adjusted to reflect changes in the estimated exercise price. These subsequent changes are accounted for in the income statement.
If the Group has also obtained a call option on the same remaining non-controlling interests of the acquired companies, this option is taken into account for the control assessment in respect of the business combination.
The cash outflow for acquisition of non-controlling interest due to call/put option settlement is included in the financing activities of the consolidated statement of cash flows.
In a business combination, the acquired assets and liabilities are measured at fair value. The Group uses assumptions and non-observable information to prepare fair value of the assessed, where no observable information is available. The actual market performance can subsequently differ from the assumptions. The most important assumptions are disclosed in the note for business combinations. (See note 7).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4977-2": { "value": "Acquisitions of subsidiaries and businesses are accounted for using the acquisition method. The consideration transferred for each acquisition is measured at the aggregate of the fair values on the date of exchange of assets given, liabilities incurred or assumed, and equity instruments issued by the Group in exchange for control of the acquiree. Where applicable, the consideration for the acquisition includes any asset or liability resulting from a contingent consideration arrangement, measured at its acquisition-date fair value. Subsequent changes in such fair values are adjusted against the cost of acquisition where they qualify as measurement period adjustments.
The acquiree\u2019s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition on the balance sheet are recognized at their fair value on the acquisition date, except for deferred tax assets or liabilities, and liabilities and assets related to employee benefit arrangements.
The difference between the fair value of the consideration transferred and the fair value of the identified assets, liabilities and contingent consideration is recorded as goodwill. If the fair value of the net assets acquired exceeds the aggregate consideration transferred, this purchase bargain is included in the profit or loss, after the Group has re-assessed whether it has correctly identified all of the assets acquired and all of the liabilities assumed. Acquisition-related costs are recognized in profit or loss as incurred.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information obtained about facts and circumstances that existed on the acquisition date that, if known, would have affected the amounts recognized on that date. The measurement period to finalize the valuations is subject to a maximum of one year after the acquisition date.
Goodwill is initially measured at cost, the excess of the aggregate of the consideration transferred and the amount recognized for the assets acquired and liabilities assumed in a business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. In the event of disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
The Group has granted put options for remaining non-controlling interests in acquired companies, giving the holders the right to sell to the Group their investments in these subsidiaries. These financial liabilities do not bear interest. In accordance with IAS 32, the Group recognizes a redemption liability corresponding to the present value of the estimated exercise price of the option. The redemption liability is included in other current and non-current liabilities, and the counterpart is a reduction from the Group's equity. At the end of each reporting period, the liability is adjusted to reflect changes in the estimated exercise price. These subsequent changes are accounted for in the income statement.
In a business combination, the acquired assets and liabilities are measured at fair value. The Group uses assumptions and non-observable information to prepare fair value of the assessed, where no observable information is available. The actual market performance can subsequently differ from the assumptions. The most important assumptions are disclosed in the note for business combinations. (See note 7).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBusinessCombinationsAndGoodwillExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i4978-1": { "value": "The difference between the fair value of the consideration transferred and the fair value of the identified assets, liabilities and contingent consideration is recorded as goodwill. If the fair value of the net assets acquired exceeds the aggregate consideration transferred, this purchase bargain is included in the profit or loss, after the Group has re-assessed whether it has correctly identified all of the assets acquired and all of the liabilities assumed. Acquisition-related costs are recognized in profit or loss as incurred.
Goodwill is initially measured at cost, the excess of the aggregate of the consideration transferred and the amount recognized for the assets acquired and liabilities assumed in a business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. In the event of disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGoodwillExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i4978-2": { "value": "The difference between the fair value of the consideration transferred and the fair value of the identified assets, liabilities and contingent consideration is recorded as goodwill. If the fair value of the net assets acquired exceeds the aggregate consideration transferred, this purchase bargain is included in the profit or loss, after the Group has re-assessed whether it has correctly identified all of the assets acquired and all of the liabilities assumed. Acquisition-related costs are recognized in profit or loss as incurred.
Goodwill is initially measured at cost, the excess of the aggregate of the consideration transferred and the amount recognized for the assets acquired and liabilities assumed in a business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. In the event of disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Research activity expenses, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in the income statement when incurred.
Development expenses for which the Group has the technical feasibility, intention and means to complete the intangible assets and the economic future benefits of the assets will flow to the Group are capitalized at cost.
Other intangible assets with finite useful lives are measured at cost, less accumulated amortization and accumulated impairment losses. Amortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date when the asset is ready for use. The estimated useful lives of intangible assets and their residual value (if applicable) are reviewed every year.
The estimated useful lives for the current and comparative period are as follows:
| Intangible assets | Economic lifetime |
|---|---|
| Trademarks and brands | Indefinite |
| Customer lists | 5 to 10 years |
| Distribution rights | 20 years |
| Other intangible assets | 3 to 7 years |
The Group has judged that the Azelis trademark has an indefinite useful life. As a consequence, the trademark is not amortized. On each reporting date, the Group reviews this judgment and assesses whether the circumstances continue to support the indefinite useful life. The trademark is part of the yearly impairment test. (See note 15).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4979-1": { "value": "Associates are entities over which the Group has significant influence, but no control. Significant influence is the power to participate in the financial and operating policy decisions of the investee.
Associates are accounted for under the equity method and are recognized initially at cost as adjusted for post-acquisition changes in the Group\u2019s share of the net assets of the associate. The Group\u2019s investment includes goodwill on acquisition, net of any accumulated impairment losses. The consolidated financial statements include the Group\u2019s share of the income and expense and the equity movements of the investments accounted within equity, after aligning the accounting policies to those of the Group, from the day significant influence commences until the day significant influence ceases. When the Group\u2019s share of losses exceeds its interest in an equity accounted investee, the carrying amount of that interest (including any long-term investments) is reduced to zero, and no further losses are recognized except for losses arising from the Group\u2019s obligation or payments on behalf of the investee.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForInvestmentInAssociates", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4981-1": { "value": "The consolidated financial statements are presented in euros, which is the Group\u2019s presentation currency. The Group companies determine their functional currency based on the primary economic environment in which they operate. The main indicators to determine the functional currency is the currency of the sales, expenses and financing activities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFunctionalCurrencyExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4982-1": { "value": "The Group operates in different currency environments, but mainly in EUR and USD. Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates on the date of the transaction. Monetary assets and liabilities denominated in foreign currency on the reporting date are translated to the functional currency of the entity at the exchange rate that date. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated to the functional currency of the entity at the exchange rate on the date that the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Foreign currency differences arising from this operational translation are recognized in the income statement.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from acquisition, are translated to euros at exchange rates on the reporting date. The income and expenses of foreign operations are translated to euros at average exchange rates.
Foreign currency differences are recognized in other comprehensive income and accumulated in equity. These differences have been recognized in the translation reserve. When the Group loses control over a foreign operation, the accumulated foreign translation amount of the subsidiary is transferred from equity to the profit or loss.
Foreign exchange gains and losses arising from a monetary item to be received from or paid to a foreign operation for which the settlement is neither planned nor likely to occur in the foreseeable future are included in the value of net investment in a foreign operation and recognized directly in equity in the translation reserve.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForForeignCurrencyTranslationExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4982-2": { "value": "The Group operates in different currency environments, but mainly in EUR and USD. Transactions in foreign currencies are translated to the respective functional currencies of the Group entities at exchange rates on the date of the transaction. Monetary assets and liabilities denominated in foreign currency on the reporting date are translated to the functional currency of the entity at the exchange rate that date. Non-monetary assets and liabilities denominated in foreign currency and measured at fair value are translated to the functional currency of the entity at the exchange rate on the date that the fair value was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are not retranslated. Foreign currency differences arising from this operational translation are recognized in the income statement.
The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from acquisition, are translated to euros at exchange rates on the reporting date. The income and expenses of foreign operations are translated to euros at average exchange rates.
Foreign currency differences are recognized in other comprehensive income and accumulated in equity. These differences have been recognized in the translation reserve. When the Group loses control over a foreign operation, the accumulated foreign translation amount of the subsidiary is transferred from equity to the profit or loss.
Foreign exchange gains and losses arising from a monetary item to be received from or paid to a foreign operation for which the settlement is neither planned nor likely to occur in the foreseeable future are included in the value of net investment in a foreign operation and recognized directly in equity in the translation reserve.
Translation reserve is part of the Reserves in the consolidated statement of financial position.
Exchange differences arising on translation of the foreign controlled entities are recognized in other comprehensive income and accumulated in the translation reserve within equity.
The majority of the intangible assets on Azelis' statement of financial position relate to the EQT/PSP acquisition in November 2018. The respective amounts have been allocated to Azelis' three operating segments and, per IFRS, also on the basis of the underlying foreign currencies in Azelis' respective jurisdictions (of which a major part relates to Azelis' activities in the United States). Exchange differences arising on translation of the intangible assets are recognized in other comprehensive income and accumulated in the translation reserve within equity.
In 2024 the translation reserve has increased by \u20ac57.2 million (2023: decrease by \u20ac99.3 million), mainly originating from the translation to EUR of the financial positions of subsidiaries having their local currency in USD, TRL and COP.
", "dimensions": { "concept": "ifrs-full:DisclosureOfEffectOfChangesInForeignExchangeRatesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4983-3": { "value": "The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising from acquisition, are translated to euros at exchange rates on the reporting date. The income and expenses of foreign operations are translated to euros at average exchange rates.
Foreign currency differences are recognized in other comprehensive income and accumulated in equity. These differences have been recognized in the translation reserve. When the Group loses control over a foreign operation, the accumulated foreign translation amount of the subsidiary is transferred from equity to the profit or loss.
Foreign exchange gains and losses arising from a monetary item to be received from or paid to a foreign operation for which the settlement is neither planned nor likely to occur in the foreseeable future are included in the value of net investment in a foreign operation and recognized directly in equity in the translation reserve.
The carrying amounts of the Group\u2019s non-current non-financial assets are reviewed on each reporting date to determine whether there is any indication of impairment. If any such indication exists, the Group performs an impairment test. For goodwill and intangible assets with indefinite lives, an impairment test is performed every year.
The recoverable amount of an asset or cash-generating unit is the higher of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future pre-tax 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. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the 'cash-generating unit'). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to (groups of) cash-generating units that are expected to benefit from the synergies of the combination.
Corporate assets are assets that do not generate cash inflows independently, and their carrying amounts need to be allocated to the cash-generating units on a reasonable and consistent basis. If a corporate asset cannot be allocated to cash-generating units on a reasonable and consistent basis, the Group performs the goodwill impairment test in two stages: first on the level of the cash-generating units, and secondly on the level of the smallest group of cash-generating units to which the corporate asset can be allocated on a reasonable and consistent basis.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in the income statement. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis.
An impairment loss in respect of goodwill will not be reversed afterwards. In respect of other assets, impairment losses recognized in prior periods are assessed on each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. 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 or amortization, if no impairment loss had been recognized.
Goodwill is initially measured at cost, the excess of the aggregate of the consideration transferred and the amount recognized for the assets acquired and liabilities assumed in a business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. In the event of disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Research activity expenses, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in the income statement when incurred.
Development expenses for which the Group has the technical feasibility, intention and means to complete the intangible assets and the economic future benefits of the assets will flow to the Group are capitalized at cost.
Other intangible assets with finite useful lives are measured at cost, less accumulated amortization and accumulated impairment losses. Amortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date when the asset is ready for use. The estimated useful lives of intangible assets and their residual value (if applicable) are reviewed every year.
The estimated useful lives for the current and comparative period are as follows:
| Intangible assets | Economic lifetime |
|---|---|
| Trademarks and brands | Indefinite |
| Customer lists | 5 to 10 years |
| Distribution rights | 20 years |
| Other intangible assets | 3 to 7 years |
Depreciation is recognized in the income statement on a straight-line basis over the estimated useful lives of each component of property, plant and equipment to their residual values. Leasehold improvements are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.
The estimated useful lives for the current and comparative period are as follows:
| Property, plant and equipment | Economic lifetime |
|---|---|
| Buildings | 20 to 33 years |
| Plant and equipment | 5 to 10 years |
| Other property, plant and equipment | 5 to 10 years |
Depreciation methods, useful lives and residual values are reviewed on each reporting date.
The Group recognizes an allowance for expected credit losses (ECLs) for all financial assets that are not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
The impairment methodology applied depends on whether there has been a significant increase in credit risk; if so, the loss allowance is measured as the lifetime expected credit loss. If not, the allowance is measured as the 12-month expected credit loss. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the receivables (see note 4.1 for further details). While cash and cash equivalents and other loan receivables are also subject to the impairment requirements of IFRS 9, no impairment loss was identified as these assets are considered as low-credit risk.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses of financial assets are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the income statement unless it relates to items recognized in other comprehensive income, in which case it is recognized in other comprehensive income.
Current tax is the expected tax payable (receivable) on the taxable income (loss) for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
The Group applies the first-in, first-out (FIFO) method to represent inventory movements. Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises direct materials, direct labor and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Impairments of inventories to net realizable value are recognized in the profit or loss as part of \u2018cost for goods and consumables\u2019. If the value of impaired inventories increases, the impairment will be reversed to the lowest of the increased net realizable value and the original cost.
The Group operates several defined benefit pension plans.
The liability or asset recognized in the balance sheet of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period, less the fair value of plan assets. The defined benefit obligation is calculated annually by independent qualified actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows, using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in finance expense in the income statement. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the income statement as past service costs.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
The cost of all short-term employee benefits, such as salaries, holiday pay, bonuses, medical aid and other contributions, are recognized during the period in which the employee renders the related service. The Group recognizes those costs only when it has a present legal or constructive obligation to make such payment and a reliable estimate of the liability can be made.
The Group\u2019s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Other long-term employee benefits are calculated using the projected unit credit method. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.
The Group has performance share plans for key management, qualifying as equity-settled share-based payment plans. Equity-settled share-based payment transactions are transactions in which the entity receives goods or services in exchange for its own equity instruments (e.g. shares, options).
Goods or services received in equity-settled share-based payment transactions are measured at their fair value, unless they cannot be estimated reliably, in which case they are determined in accordance with the fair value of the equity instruments granted. The fair value is determined on the grant date, and the value incorporates market conditions using a Monte Carlo calculation. This value remains unchanged over the vesting period. Service conditions and non-market conditions do not affect the fair value of the instruments granted, but are taken into account by adjusting the number of equity instruments included in the measurement of the transaction, an estimate which is revised on each reporting date until the vesting period has lapsed. Azelis accounts for the equity-settled share-based payment transaction in the other reserves section of the equity, and its initial recognition and subsequent changes are accounted for in employee expenses.
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 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 the risks specific to the liability. Unwinding of the discount of provisions is recorded as financial expenses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForExpensesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i4984-1": { "value": "Non-monetary assets and liabilities, equity and the income statement of subsidiaries operating in hyperinflationary economies are restated for changes in the general purchasing power of the local currency applying a general price index. These re-measured amounts are used for conversion into the Group reporting currency at the period closing exchange rate. As a result, the balance sheet and net results of subsidiaries operating in hyperinflation economies are stated in terms of the measuring unit current at the end of the reporting period. In accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates, multinational companies that have subsidiaries with the hyperinflationary currency as their functional currency are not required to restate comparative amounts as those were presented previously in a stable currency.
Since 2022, the Group has applied hyperinflation accounting for its subsidiaries having their functional currency in Turkish lira. The relevant price index used for the restatement of the financial statements of Azelis' Turkish subsidiaries is the consumer price index (CPI) based on data of the Turkish Statistical Institute. The consumer price index and the exchange rate between euros and the Turkish lira have changed in 2023 and 2024 as follows:
| Year (31st December) | Turkey CPI | Change (%) | EUR/TRL exchange rate |
| 2023 | 18.59 | 64.77% | 32.69 |
| 2024 | 26.85 | 44.38% | 36.74 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
", "dimensions": { "concept": "ifrs-full:DisclosureOfHyperinflationaryReportingExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5005-1": { "value": "The carrying amounts of the Group\u2019s non-current non-financial assets are reviewed on each reporting date to determine whether there is any indication of impairment. If any such indication exists, the Group performs an impairment test. For goodwill and intangible assets with indefinite lives, an impairment test is performed every year.
The recoverable amount of an asset or cash-generating unit is the higher of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future pre-tax 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. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the 'cash-generating unit'). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to (groups of) cash-generating units that are expected to benefit from the synergies of the combination.
Corporate assets are assets that do not generate cash inflows independently, and their carrying amounts need to be allocated to the cash-generating units on a reasonable and consistent basis. If a corporate asset cannot be allocated to cash-generating units on a reasonable and consistent basis, the Group performs the goodwill impairment test in two stages: first on the level of the cash-generating units, and secondly on the level of the smallest group of cash-generating units to which the corporate asset can be allocated on a reasonable and consistent basis.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in the income statement. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis.
An impairment loss in respect of goodwill will not be reversed afterwards. In respect of other assets, impairment losses recognized in prior periods are assessed on each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. 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 or amortization, if no impairment loss had been recognized.
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash-generating unit (CGU) is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period, incorporating estimates for sales growth and margin growth. Cash flows beyond the five-year period are extrapolated using the estimated growth rates. These growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates. (See note 15.2).
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfNonfinancialAssetsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5005-2": { "value": "The carrying amounts of the Group\u2019s non-current non-financial assets are reviewed on each reporting date to determine whether there is any indication of impairment. If any such indication exists, the Group performs an impairment test. For goodwill and intangible assets with indefinite lives, an impairment test is performed every year.
The recoverable amount of an asset or cash-generating unit is the higher of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future pre-tax 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. For the purpose of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets (the 'cash-generating unit'). The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to (groups of) cash-generating units that are expected to benefit from the synergies of the combination.
Corporate assets are assets that do not generate cash inflows independently, and their carrying amounts need to be allocated to the cash-generating units on a reasonable and consistent basis. If a corporate asset cannot be allocated to cash-generating units on a reasonable and consistent basis, the Group performs the goodwill impairment test in two stages: first on the level of the cash-generating units, and secondly on the level of the smallest group of cash-generating units to which the corporate asset can be allocated on a reasonable and consistent basis.
An impairment loss is recognized if the carrying amount of an asset or its cash-generating unit exceeds its estimated recoverable amount. Impairment losses are recognized in the income statement. Impairment losses recognized in respect of cash-generating units are allocated first to reduce the carrying amount of goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (or group of units) on a pro rata basis.
An impairment loss in respect of goodwill will not be reversed afterwards. In respect of other assets, impairment losses recognized in prior periods are assessed on each reporting date for any indications that the loss has decreased or no longer exists. An impairment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. 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 or amortization, if no impairment loss had been recognized.
The Group recognizes an allowance for expected credit losses (ECLs) for all financial assets that are not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
The impairment methodology applied depends on whether there has been a significant increase in credit risk; if so, the loss allowance is measured as the lifetime expected credit loss. If not, the allowance is measured as the 12-month expected credit loss. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the receivables (see note 4.1 for further details). While cash and cash equivalents and other loan receivables are also subject to the impairment requirements of IFRS 9, no impairment loss was identified as these assets are considered as low-credit risk.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses of financial assets are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash-generating unit (CGU) is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period, incorporating estimates for sales growth and margin growth. Cash flows beyond the five-year period are extrapolated using the estimated growth rates. These growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates. (See note 15.2).
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5006-3": { "value": "Goodwill is initially measured at cost, the excess of the aggregate of the consideration transferred and the amount recognized for the assets acquired and liabilities assumed in a business combination. After initial recognition, goodwill is measured at cost, less any accumulated impairment losses. In the event of disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of the profit or loss on disposal.
Research activity expenses, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in the income statement when incurred.
Development expenses for which the Group has the technical feasibility, intention and means to complete the intangible assets and the economic future benefits of the assets will flow to the Group are capitalized at cost.
Other intangible assets with finite useful lives are measured at cost, less accumulated amortization and accumulated impairment losses. Amortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date when the asset is ready for use. The estimated useful lives of intangible assets and their residual value (if applicable) are reviewed every year.
The estimated useful lives for the current and comparative period are as follows:
| Intangible assets | Economic lifetime |
|---|---|
| Trademarks and brands | Indefinite |
| Customer lists | 5 to 10 years |
| Distribution rights | 20 years |
| Other intangible assets | 3 to 7 years |
| (in thousands of \u20ac) | Goodwill | Trademarks | Distribution rights | Concessions and licenses | Development costs | Customer lists | Other | Intangibles in progress | Total |
|---|---|---|---|---|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,174,256 | 317,378 | 964,516 | 8,159 | 7,738 | 5,670 | 26,372 | 5,371 | 3,509,462 |
| Accumulated amortization and impairment | - | - | -137,552 | -4,702 | -3,904 | -1,663 | -13,789 | -3,106 | -164,720 |
| \u00a0 | 2,174,256 | 317,378 | 826,964 | 3,456 | 3,834 | 4,007 | 12,583 | 2,265 | 3,344,742 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 256,106 | - | 246,125 | 30 | 35 | - | 6,271 | - | 508,567 |
| Additions | - | - | 1,086 | 73 | 1,284 | 567 | 1,667 | 5,490 | 10,166 |
| Amortization | - | - | -57,319 | -395 | -1,434 | -937 | -4,372 | - | -64,458 |
| Impairment charge | - | - | -1,662 | - | - | - | - | - | -1,662 |
| Disposals | - | - | - | - | - | 13 | -383 | 12 | -358 |
| Reclassifications | - | - | - | -15 | -4 | 508 | 911 | -1,224 | 177 |
| Hyperinflation | 19,627 | - | 12,419 | 2 | - | - | 36 | - | 32,083 |
| Translation differences | -40,738 | - | -29,657 | -90 | 1 | -370 | 68 | -87 | -70,873 |
| Changes in the Period | 234,995 | - | 170,993 | -395 | -118 | -220 | 4,198 | 4,191 | 413,642 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,409,251 | 317,378 | 1,194,490 | 8,159 | 9,054 | 6,387 | 34,942 | 9,562 | 3,989,224 |
| Accumulated amortization and impairment | - | - | -196,534 | -5,097 | -5,338 | -2,600 | -18,162 | -3,106 | -230,840 |
| \u00a0 | 2,409,251 | 317,378 | 997,956 | 3,061 | 3,716 | 3,786 | 16,780 | 6,456 | 3,758,384 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 73,560 | - | 76,613 | 178 | - | - | - | - | 150,350 |
| Additions | - | - | 1,094 | 42 | 1,269 | 17 | 435 | 6,612 | 9,469 |
| Amortization | - | - | -62,791 | -819 | -1,660 | -691 | -5,205 | - | -71,166 |
| Impairment charge | - | - | -1,567 | - | - | - | - | - | -1,567 |
| Disposals | 21 | - | - | -96 | -10 | - | 36 | -82 | -132 |
| Reclassifications | - | - | - | 2,011 | 4,139 | -1 | 6,038 | -11,683 | 505 |
| Hyperinflation | 23,036 | - | 13,276 | 1 | - | - | 30 | - | 36,344 |
| Translation differences | 30,976 | - | 14,905 | 160 | 139 | 77 | 104 | 77 | 46,438 |
| Changes in the Period | 127,593 | - | 41,528 | 1,476 | 3,878 | -598 | 1,439 | -5,076 | 170,241 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,536,844 | 317,378 | 1,300,377 | 10,453 | 14,592 | 6,480 | 41,586 | 4,486 | 4,232,198 |
| Accumulated amortization and impairment | - | - | -260,893 | -5,916 | -6,998 | -3,292 | -23,366 | -3,106 | -303,573 |
| \u00a0 | 2,536,844 | 317,378 | 1,039,484 | 4,538 | 7,594 | 3,189 | 18,219 | 1,380 | 3,928,625 |
The reclassifications relate mainly to internal project costs, which are recognized at year-end as intangibles.
The trademark relates to the Azelis name. Azelis uses its name globally, and its trade name is considered to be a key asset of its distribution activities given its status as a major distributor in the specialty chemicals sector. The name both supports the Group in onboarding principals and customers, and in acquiring companies that want to become part of the Group as they know that their business will grow being part of it. The Azelis trademark is estimated to have an indefinite economic life for amortization purposes; therefore, effectively no amortization expenses are being booked through Azelis' income statement. The total value of \u20ac317.4 million on December 31, 2024, originates entirely from the EQT/PSP acquisition in November 2018 and remained unchanged since that date.
The translation differences of \u20ac46.4 million gain (2023: \u20ac70.9 million loss) are recognized in other comprehensive income and accumulated in the translation reserve within equity. Reference is made to note 21.4.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purpose of impairment testing, goodwill is allocated to the following CGUs:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| EMEA | 843,470 | 782,687 |
| Americas | 1,295,037 | 1,251,715 |
| Asia Pacific | 398,337 | 374,849 |
| Total goodwill | 2,536,844 | 2,409,251 |
All goodwill acquired in the business combinations was allocated to a CGU at the end of the reporting period. Goodwill is allocated on a regional level as it is the Group's regions that are expected to benefit from the business combinations, and as goodwill is also monitored internally at regional level. The Group expects synergies to be realized in the region of acquisition.
Trademarks with a book value of \u20ac317.4 million (2023: \u20ac317.4 million) have an indefinite life. These do not generate cash inflows independently and qualify as corporate assets. As their carrying amount cannot be allocated to the CGUs on a reasonable and consistent basis, the corporate assets are allocated to the Group as a whole, and the impairment test is performed in two stages.
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "h3-blocktag-i5009-1": { "value": "Research activity expenses, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in the income statement when incurred.
Development expenses for which the Group has the technical feasibility, intention and means to complete the intangible assets and the economic future benefits of the assets will flow to the Group are capitalized at cost.
Other intangible assets with finite useful lives are measured at cost, less accumulated amortization and accumulated impairment losses. Amortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date when the asset is ready for use. The estimated useful lives of intangible assets and their residual value (if applicable) are reviewed every year.
The estimated useful lives for the current and comparative period are as follows:
| Intangible assets | Economic lifetime |
|---|---|
| Trademarks and brands | Indefinite |
| Customer lists | 5 to 10 years |
| Distribution rights | 20 years |
| Other intangible assets | 3 to 7 years |
The Group has judged that the Azelis trademark has an indefinite useful life. As a consequence, the trademark is not amortized. On each reporting date, the Group reviews this judgment and assesses whether the circumstances continue to support the indefinite useful life. The trademark is part of the yearly impairment test. (See note 15).
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIntangibleAssetsOtherThanGoodwillExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "h3-blocktag-i5009-2": { "value": "Research activity expenses, undertaken with the prospect of gaining new scientific or technical knowledge and understanding, are recognized in the income statement when incurred.
Development expenses for which the Group has the technical feasibility, intention and means to complete the intangible assets and the economic future benefits of the assets will flow to the Group are capitalized at cost.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForResearchAndDevelopmentExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5013-1": { "value": "Other intangible assets with finite useful lives are measured at cost, less accumulated amortization and accumulated impairment losses. Amortization is recognized in the income statement on a straight-line basis over the estimated useful lives of intangible assets, other than goodwill, from the date when the asset is ready for use. The estimated useful lives of intangible assets and their residual value (if applicable) are reviewed every year.
Depreciation is recognized in the income statement on a straight-line basis over the estimated useful lives of each component of property, plant and equipment to their residual values. Leasehold improvements are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.
The estimated useful lives for the current and comparative period are as follows:
| Property, plant and equipment | Economic lifetime |
|---|---|
| Buildings | 20 to 33 years |
| Plant and equipment | 5 to 10 years |
| Other property, plant and equipment | 5 to 10 years |
Depreciation methods, useful lives and residual values are reviewed on each reporting date.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDepreciationExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5014-2": { "value": "The estimated useful lives for the current and comparative period are as follows:
| Intangible assets | Economic lifetime |
|---|---|
| Trademarks and brands | Indefinite |
| Customer lists | 5 to 10 years |
| Distribution rights | 20 years |
| Other intangible assets | 3 to 7 years |
The estimated useful lives for the current and comparative period are as follows:
| Property, plant and equipment | Economic lifetime |
|---|---|
| Buildings | 20 to 33 years |
| Plant and equipment | 5 to 10 years |
| Other property, plant and equipment | 5 to 10 years |
In the process of applying accounting policies and preparing the consolidated financial statements, the Group has made certain judgments (other than those involving estimates) that affect the reported amounts of assets and liabilities, income and expenses.
In addition, the Group is required to make certain estimates and assumptions that affect the measurement and presentation of reported figures. Estimates are based on past experience and on additional knowledge obtained on transactions to be reported, and are reviewed on an ongoing basis. Actual amounts may differ from these estimates. The most critical accounting judgments and estimates related to uncertainties with significant risk of causing material adjustment and applied in the consolidated financial statements are described below:
The Group has judged that the Azelis trademark has an indefinite useful life. As a consequence, the trademark is not amortized. On each reporting date, the Group reviews this judgment and assesses whether the circumstances continue to support the indefinite useful life. The trademark is part of the yearly impairment test. (See note 15).
In assessing the realization of deferred tax assets, management considers the extent to which it is probable that the deferred tax asset will be realized (note 14). The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profit during the periods in which those temporary differences and tax loss carry forwards are available. Management considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. (See note 14.2)
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended. (See note 16.2)
Under supplier finance arrangements, trade payables are transferred by the Group to a financial institution who assumes its creditor obligations. Following this transfer, the Group will no longer be to offset any of the transferred payables against credit notes received from the supplier.
For the purpose of the consolidated statement of cash flows, management considers that the finance provider settles the invoices as a payment agent on behalf of the entity. The payments made by the finance provider are therefore presented as operating cash outflows and financing cash inflows in equal but opposite amounts at the point when the finance provider pays the supplier. When the Group subsequently pays the amount outstanding to the finance provider, this is presented as a financing cash outflow.
In a business combination, the acquired assets and liabilities are measured at fair value. The Group uses assumptions and non-observable information to prepare fair value of the assessed, where no observable information is available. The actual market performance can subsequently differ from the assumptions. The most important assumptions are disclosed in the note for business combinations. (See note 7).
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash-generating unit (CGU) is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period, incorporating estimates for sales growth and margin growth. Cash flows beyond the five-year period are extrapolated using the estimated growth rates. These growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates. (See note 15.2).
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAccountingJudgementsAndEstimatesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5034-1": { "value": "Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Components of property, plant and equipment with separate useful lives are accounted for as separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the net proceeds from disposal with the carrying amount of property, plant and equipment and are recognized in other income or other expenses in the income statement.
Depreciation is recognized in the income statement on a straight-line basis over the estimated useful lives of each component of property, plant and equipment to their residual values. Leasehold improvements are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.
The estimated useful lives for the current and comparative period are as follows:
| Property, plant and equipment | Economic lifetime |
|---|---|
| Buildings | 20 to 33 years |
| Plant and equipment | 5 to 10 years |
| Other property, plant and equipment | 5 to 10 years |
Depreciation methods, useful lives and residual values are reviewed on each reporting date.
Assets and liabilities arising from a lease are initially measured on a present value basis.
Right-of-use assets are measured at cost, comprising the following:
the amount of the initial measurement of lease liability
any lease payments made on or before the commencement date, less any lease incentives received
any initial direct costs
restoration costs
Items of property, plant and equipment are measured at cost, less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the asset. Components of property, plant and equipment with separate useful lives are accounted for as separate items (major components) of property, plant and equipment.
Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the net proceeds from disposal with the carrying amount of property, plant and equipment and are recognized in other income or other expenses in the income statement.
Depreciation is recognized in the income statement on a straight-line basis over the estimated useful lives of each component of property, plant and equipment to their residual values. Leasehold improvements are depreciated over the shorter of the lease term and their useful lives. Land is not depreciated.
The estimated useful lives for the current and comparative period are as follows:
| Property, plant and equipment | Economic lifetime |
|---|---|
| Buildings | 20 to 33 years |
| Plant and equipment | 5 to 10 years |
| Other property, plant and equipment | 5 to 10 years |
Depreciation methods, useful lives and residual values are reviewed on each reporting date.
Right-of-use assets are measured at cost, comprising the following:
the amount of the initial measurement of lease liability
any lease payments made on or before the commencement date, less any lease incentives received
any initial direct costs
restoration costs
| (in thousands of \u20ac) | Land and buildings | Plant and equipment | Other | Total |
|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 32,491 | 15,193 | 30,403 | 78,086 |
| Accumulated depreciation and impairment | -4,144 | -4,877 | -11,182 | -20,203 |
| \u00a0 | 28,347 | 10,316 | 19,221 | 57,884 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 840 | 3,398 | 11,909 | 16,148 |
| Additions | 431 | 1,605 | 6,463 | 8,499 |
| Depreciation | -1,143 | -2,278 | -5,345 | -8,765 |
| Reversal of impairment | 3,311 | - | - | 3,311 |
| Disposals | -2,136 | -353 | 82 | -2,407 |
| Reclassifications | 47 | 65 | -223 | -111 |
| Hyperinflation | - | 2 | 129 | 131 |
| Translation differences | -752 | -9 | -351 | -1,112 |
| Changes in the Period | 598 | 2,430 | 12,664 | 15,693 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 30,921 | 19,901 | 48,412 | 99,234 |
| Accumulated depreciation and impairment | -1,976 | -7,154 | -16,526 | -25,657 |
| \u00a0 | 28,945 | 12,747 | 31,886 | 73,577 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 353 | 265 | 239 | 857 |
| Additions | 90 | 1,198 | 7,833 | 9,121 |
| Depreciation | -1,189 | -2,347 | -5,827 | -9,363 |
| Impairment | -284 | - | -30 | -314 |
| Disposals | -3,850 | -684 | -612 | -5,147 |
| Reclassifications | 27 | 1 | -889 | -861 |
| Hyperinflation | - | 9 | 36 | 46 |
| Translation differences | -265 | 56 | -1,644 | -1,853 |
| Changes in the Period | -5,118 | -1,502 | -894 | -7,514 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 27,276 | 20,746 | 53,375 | 101,397 |
| Accumulated depreciation and impairment | -3,449 | -9,501 | -22,383 | -35,334 |
| \u00a0 | 23,827 | 11,245 | 30,992 | 66,063 |
The category 'Other' mainly relates to leasehold improvements, comprising also an insignificant amount of assets under construction.
On December 31, 2024, the Group had not pledged any land and buildings, or plant and equipment as security for the bank loans (2023: zero). Other restrictions are mainly related to leasehold improvements and leased machinery.
The right of use assets mainly relates to rental agreements for offices, warehouses, and cars.
| (in thousands of \u20ac) | Land and buildings | Other | Total |
|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 130,385 | 27,642 | 158,027 |
| Accumulated depreciation and impairment | -42,829 | -18,215 | -61,045 |
| \u00a0 | 87,555 | 9,426 | 96,982 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 16,174 | 1,796 | 17,971 |
| Additions | 19,432 | 9,776 | 29,209 |
| Depreciation | -19,357 | -5,950 | -25,307 |
| Disposals | -1,309 | -98 | -1,407 |
| Remeasurements | 6,212 | 1,273 | 7,485 |
| Hyperinflation | 3,566 | -188 | 3,378 |
| Translation differences | -4,775 | -487 | -5,262 |
| Changes in the Period | 19,945 | 6,122 | 26,066 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 169,686 | 39,714 | 209,399 |
| Accumulated depreciation and impairment | -62,186 | -24,166 | -86,352 |
| \u00a0 | 107,500 | 15,548 | 123,048 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 817 | 164 | 981 |
| Additions | 56,851 | 10,543 | 67,394 |
| Depreciation | -24,958 | -7,134 | -32,092 |
| Remeasurements | 8,743 | 417 | 9,159 |
| Hyperinflation | 3,011 | 257 | 3,268 |
| Translation differences | -621 | -93 | -714 |
| Changes in the Period | 34,799 | 3,699 | 38,498 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 229,443 | 50,547 | 279,990 |
| Accumulated depreciation and impairment | -87,144 | -31,300 | -118,444 |
| \u00a0 | 142,299 | 19,247 | 161,546 |
Remeasurements mainly relate to the prolongation of the lease period of existing contracts.
The Group has lease contracts that have not yet commenced as of December 31, 2024 with future lease payments of around \u20ac4.4 million (2023: \u20ac82.2 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfPropertyPlantAndEquipmentExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5053-1": { "value": "Assets and liabilities arising from a lease are initially measured on a present value basis.
Lease liabilities include the net present value of the following lease payments:
fixed payments, less any lease incentives receivable
variable lease payment that are based on an index or a rate, initially measured using the index or rate on the commencement date
amounts expected to be payable by the Group under residual value guarantees
the exercise price of a purchase option if the Group is reasonably certain to exercise that option
payments of penalties for terminating the lease, if the term reflects the Group exercising that option
The Group elects to not to separate non-lease components from lease components, and instead accounts for each lease component and any associated non-lease components as a single lease component.\u00a0
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period, so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost, comprising the following:
the amount of the initial measurement of lease liability
any lease payments made on or before the commencement date, less any lease incentives received
any initial direct costs
restoration costs
Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT equipment and small items of office furniture.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercising a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate on the effective date of the modification
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended. (See note 16.2)
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForLeasesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5055-1": { "value": "Lease liabilities include the net present value of the following lease payments:
fixed payments, less any lease incentives receivable
variable lease payment that are based on an index or a rate, initially measured using the index or rate on the commencement date
amounts expected to be payable by the Group under residual value guarantees
the exercise price of a purchase option if the Group is reasonably certain to exercise that option
payments of penalties for terminating the lease, if the term reflects the Group exercising that option
The Group elects to not to separate non-lease components from lease components, and instead accounts for each lease component and any associated non-lease components as a single lease component.\u00a0
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period, so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercising a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate on the effective date of the modification
Financial assets and liabilities are classified into three categories: measured at amortized cost, at fair value through other comprehensive income (FVTOCI) and at fair value through profit and loss (FVTPL).
The Group recognizes financial instruments when it enters into a contract. Financial instruments are derecognized when the contractual rights to the cash flows of the asset expire, or the rights to receive the contractual cash flows on the financial asset are transferred in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. With regard to its trade receivables, the Group engages in non-recourse factoring programs. Receivables are derecognized when the factor pays the Group, which also triggers a fee to be paid for the credit risk assumed by the factor. Factoring fees are recognized in the Group's financial expenses.
Initially, financial instruments are recognized at their fair value. Transaction costs directly attributable to the acquisition or issue of financial instruments are recognized on the initial measurement date, except for financial instruments measured at FVTPL. Transaction costs related to FVTPL financial instruments are recorded in the profit or loss at initial recognition.
The classification of financial assets is based on two criteria: the objective of the Company's business model for managing the assets, and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' on the principal amount outstanding (known as the 'SPPI-test').
Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components, when they are recognized at fair value. The Group holds trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method. Other receivables are initially measured at fair value and subsequently measured at amortized cost.
Trade and other payables are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. Loans and borrowings are initially recognized at fair value, net of transaction costs incurred. Loans and borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
An exchange between an existing borrower and lender of financial liabilities with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.
The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. However, costs or fees that are incremental and directly related to the issue of the new debt instrument are treated as transaction costs of the new liability, and hence are spread forward by adjusting the effective interest rate.
The Group uses derivative financial instruments such as forward exchange contracts, interest rate swaps to hedge its foreign currency risk and interest rate risk, and interest rate cap to hedge its interest rate risks associated with floating-rate borrowings under the Group\u2019s credit facilities.
Derivatives are initially recognized as other financial assets at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value through profit and loss at the end of each reporting period. The derivative is only used for economic hedging purposes and not as a speculative investment.\u00a0 The Group does not apply hedge accounting. Therefore, changes in the fair value of the Group\u2019s derivative financial instrument are recognized immediately in the consolidated statement of profit or loss and are included in finance costs.
The Group has granted put options for remaining non-controlling interests in acquired companies, giving the holders the right to sell to the Group their investments in these subsidiaries. These financial liabilities do not bear interest. In accordance with IAS 32, the Group recognizes a redemption liability corresponding to the present value of the estimated exercise price of the option. The redemption liability is included in other current and non-current liabilities, and the counterpart is a reduction from the Group's equity. At the end of each reporting period, the liability is adjusted to reflect changes in the estimated exercise price. These subsequent changes are accounted for in the income statement.
If the Group has also obtained a call option on the same remaining non-controlling interests of the acquired companies, this option is taken into account for the control assessment in respect of the business combination.
The cash outflow for acquisition of non-controlling interest due to call/put option settlement is included in the financing activities of the consolidated statement of cash flows.
The Group classifies financial liabilities that arise from supplier finance arrangements within loans and borrowings and bank overdrafts in the statement of financial position if they have a similar nature and function to bank loans and bank overdrafts. This is the case if the supplier finance arrangement is part of the financing used in the Group\u2019s normal operating cycle, the level of security provided is similar to bank loans and the terms of the liabilities of the supplier finance arrangement are extended compared to trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in loans and borrowings in the consolidated statement of financial position are included in financing activities in the consolidated statement of cash flows.
The Group recognizes an allowance for expected credit losses (ECLs) for all financial assets that are not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
The impairment methodology applied depends on whether there has been a significant increase in credit risk; if so, the loss allowance is measured as the lifetime expected credit loss. If not, the allowance is measured as the 12-month expected credit loss. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the receivables (see note 4.1 for further details). While cash and cash equivalents and other loan receivables are also subject to the impairment requirements of IFRS 9, no impairment loss was identified as these assets are considered as low-credit risk.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses of financial assets are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
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.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5055-2": { "value": "Lease liabilities include the net present value of the following lease payments:
fixed payments, less any lease incentives receivable
variable lease payment that are based on an index or a rate, initially measured using the index or rate on the commencement date
amounts expected to be payable by the Group under residual value guarantees
the exercise price of a purchase option if the Group is reasonably certain to exercise that option
payments of penalties for terminating the lease, if the term reflects the Group exercising that option
The Group elects to not to separate non-lease components from lease components, and instead accounts for each lease component and any associated non-lease components as a single lease component.\u00a0
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for leases in the Group, the lessee's incremental borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic environment with similar terms, security and conditions.
The Group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease period, so as to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use asset) whenever:
The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of exercising a purchase option, in which case the lease liability is remeasured by discounting the revised lease payments using a revised discount rate
The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate
A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate on the effective date of the modification
Trade and other payables are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. Loans and borrowings are initially recognized at fair value, net of transaction costs incurred. Loans and borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
An exchange between an existing borrower and lender of financial liabilities with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.
The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. However, costs or fees that are incremental and directly related to the issue of the new debt instrument are treated as transaction costs of the new liability, and hence are spread forward by adjusting the effective interest rate.
The Group classifies financial liabilities that arise from supplier finance arrangements within loans and borrowings and bank overdrafts in the statement of financial position if they have a similar nature and function to bank loans and bank overdrafts. This is the case if the supplier finance arrangement is part of the financing used in the Group\u2019s normal operating cycle, the level of security provided is similar to bank loans and the terms of the liabilities of the supplier finance arrangement are extended compared to trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in loans and borrowings in the consolidated statement of financial position are included in financing activities in the consolidated statement of cash flows.
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.
Under supplier finance arrangements, trade payables are transferred by the Group to a financial institution who assumes its creditor obligations. Following this transfer, the Group will no longer be to offset any of the transferred payables against credit notes received from the supplier.
For the purpose of the consolidated statement of cash flows, management considers that the finance provider settles the invoices as a payment agent on behalf of the entity. The payments made by the finance provider are therefore presented as operating cash outflows and financing cash inflows in equal but opposite amounts at the point when the finance provider pays the supplier. When the Group subsequently pays the amount outstanding to the finance provider, this is presented as a financing cash outflow.
Financial assets and liabilities are classified into three categories: measured at amortized cost, at fair value through other comprehensive income (FVTOCI) and at fair value through profit and loss (FVTPL).
The Group recognizes financial instruments when it enters into a contract. Financial instruments are derecognized when the contractual rights to the cash flows of the asset expire, or the rights to receive the contractual cash flows on the financial asset are transferred in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. With regard to its trade receivables, the Group engages in non-recourse factoring programs. Receivables are derecognized when the factor pays the Group, which also triggers a fee to be paid for the credit risk assumed by the factor. Factoring fees are recognized in the Group's financial expenses.
Initially, financial instruments are recognized at their fair value. Transaction costs directly attributable to the acquisition or issue of financial instruments are recognized on the initial measurement date, except for financial instruments measured at FVTPL. Transaction costs related to FVTPL financial instruments are recorded in the profit or loss at initial recognition.
The classification of financial assets is based on two criteria: the objective of the Company's business model for managing the assets, and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' on the principal amount outstanding (known as the 'SPPI-test').
Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components, when they are recognized at fair value. The Group holds trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method. Other receivables are initially measured at fair value and subsequently measured at amortized cost.
Trade and other payables are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. Loans and borrowings are initially recognized at fair value, net of transaction costs incurred. Loans and borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
An exchange between an existing borrower and lender of financial liabilities with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.
The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. However, costs or fees that are incremental and directly related to the issue of the new debt instrument are treated as transaction costs of the new liability, and hence are spread forward by adjusting the effective interest rate.
The Group uses derivative financial instruments such as forward exchange contracts, interest rate swaps to hedge its foreign currency risk and interest rate risk, and interest rate cap to hedge its interest rate risks associated with floating-rate borrowings under the Group\u2019s credit facilities.
Derivatives are initially recognized as other financial assets at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value through profit and loss at the end of each reporting period. The derivative is only used for economic hedging purposes and not as a speculative investment.\u00a0 The Group does not apply hedge accounting. Therefore, changes in the fair value of the Group\u2019s derivative financial instrument are recognized immediately in the consolidated statement of profit or loss and are included in finance costs.
The Group has granted put options for remaining non-controlling interests in acquired companies, giving the holders the right to sell to the Group their investments in these subsidiaries. These financial liabilities do not bear interest. In accordance with IAS 32, the Group recognizes a redemption liability corresponding to the present value of the estimated exercise price of the option. The redemption liability is included in other current and non-current liabilities, and the counterpart is a reduction from the Group's equity. At the end of each reporting period, the liability is adjusted to reflect changes in the estimated exercise price. These subsequent changes are accounted for in the income statement.
If the Group has also obtained a call option on the same remaining non-controlling interests of the acquired companies, this option is taken into account for the control assessment in respect of the business combination.
The cash outflow for acquisition of non-controlling interest due to call/put option settlement is included in the financing activities of the consolidated statement of cash flows.
The Group classifies financial liabilities that arise from supplier finance arrangements within loans and borrowings and bank overdrafts in the statement of financial position if they have a similar nature and function to bank loans and bank overdrafts. This is the case if the supplier finance arrangement is part of the financing used in the Group\u2019s normal operating cycle, the level of security provided is similar to bank loans and the terms of the liabilities of the supplier finance arrangement are extended compared to trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in loans and borrowings in the consolidated statement of financial position are included in financing activities in the consolidated statement of cash flows.
The Group recognizes an allowance for expected credit losses (ECLs) for all financial assets that are not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
The impairment methodology applied depends on whether there has been a significant increase in credit risk; if so, the loss allowance is measured as the lifetime expected credit loss. If not, the allowance is measured as the 12-month expected credit loss. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the receivables (see note 4.1 for further details). While cash and cash equivalents and other loan receivables are also subject to the impairment requirements of IFRS 9, no impairment loss was identified as these assets are considered as low-credit risk.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses of financial assets are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
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.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
Azelis is exposed to several financial and other risks, including:
Credit risks
Liquidity risks
Market risks
Operational risks
Azelis has a risk management framework in place to mitigate those risks. The Board of Directors oversees how management monitors compliance with the Group\u2019s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group\u2019s receivables from customers.
As of December 31, the main credit risk can be summarized as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade and other receivables | 589,031 | 521,896 |
| Cash and cash equivalents | 303,945 | 484,874 |
| Other financial assets | 1,992 | 7,809 |
| \u00a0 | 894,969 | 1,014,578 |
The Group applies the IFRS 9 simplified approach (refer to note 2.7.2).
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. The Group has no significant concentration of credit risk.
The Group has a credit policy under which each new customer is analyzed individually for creditworthiness before the Group\u2019s standard payment and delivery terms and conditions are offered. The Group\u2019s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer.
Customers that fail to meet the Group\u2019s benchmark creditworthiness may transact with the Group only on a prepayment basis. The Group\u2019s credit policy includes suspension of further deliveries if customers fail to pay their debts on time. Moreover, the Group engages in non-recourse factoring for the majority of its revenue in the EMEA region, which is used as an efficiency program in its credit collection processes. No other credit insurance programs are deemed to be necessary.
A significant portion of the Group\u2019s customers have been transacting with the Group companies for many years and losses have occurred infrequently. The Group does not require collateral in respect of trade and other receivables.
The Group establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets, adjusted for forward-looking information through an assessment of both the current and projected direction of economic conditions at the reporting date.
At year-end, the aging of the trade receivables after the deduction of the factoring received is constituted as follows:
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 384,209 | 73.0% | 1,256 | 0.3% |
| Between 0 and 2 months | 94,618 | 18.0% | 2,421 | 2.6% |
| Between 2 and 12 months | 35,411 | 6.7% | 14,221 | 40.2% |
| More than 12 months | 11,999 | 2.3% | 11,960 | 99.7% |
| \u00a0 | 526,237 | 100.0% | 29,858 | 5.7% |
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 340,390 | 71.8% | 2,483 | 0.7% |
| Between 0 and 2 months | 93,354 | 19.7% | 5,636 | 6.0% |
| Between 2 and 12 months | 31,000 | 6.5% | 12,068 | 38.9% |
| More than 12 months | 9,507 | 2.0% | 9,200 | 96.8% |
| \u00a0 | 474,250 | 100.0% | 29,387 | 6.2% |
The loss allowances for trade receivables on December 31 reconcile to the opening loss allowances as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Balance at 1 January | 29,387 | 38,912 |
| Business combination | 2,176 | 3,203 |
| Provisions made in the year | 11,912 | 5,168 |
| Decrease on impairment losses | -13,566 | -16,881 |
| Exchange rate differences | -51 | -1,015 |
| Balance at December 31 | 29,858 | 29,387 |
The Group\u2019s exposure to credit risk is insignificant as the Group deals with highly rated banks for its cash deposits.
The Group\u2019s policy is to provide financial guarantees only in favor of wholly owned subsidiaries. On the balance sheet date, no other material guarantees were outstanding.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group\u2019s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses.
The Group ensures that it has sufficient cash on hand and unused credit facilities to meet expected operational expenses for the respective planning horizon, including the servicing of financial obligations.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of any netting agreements at year-end:
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,661,091 | 2,039,722 | 130,843 | 1,908,879 | 0 |
| Lease obligation (IFRS16) | 163,753 | 216,759 | 36,056 | 88,091 | 92,612 |
| Derivatives | 112 | 112 | 112 | 0 | 0 |
| Trade and other payables | 733,622 | 739,437 | 702,269 | 37,169 | 0 |
| Bank Overdrafts | 19,146 | 19,146 | 19,146 | 0 | 0 |
| \u00a0 | 2,577,724 | 3,015,176 | 888,425 | 2,034,139 | 92,612 |
Loans and borrowings are primarily to be repaid in 2029 (December 31, 2023: in 2026).
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,631,194 | 1,942,106 | 176,219 | 1,749,928 | 15,959 |
| Lease obligation (IFRS16) | 126,619 | 141,658 | 28,213 | 79,863 | 33,582 |
| Derivatives | 3,921 | 3,921 | 3,921 | 0 | 0 |
| Trade and other payables | 865,365 | 872,078 | 797,363 | 74,715 | 0 |
| Bank overdrafts | 18,286 | 18,286 | 18,286 | 0 | 0 |
| \u00a0 | 2,645,385 | 2,978,048 | 1,024,002 | 1,904,506 | 49,541 |
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group\u2019s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Group buys and sells derivatives in order to manage its market risks.
The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in various currencies. The main currencies are euros (\u20ac), pound sterling (GBP) and US dollars (USD).
At any point in time, the Group hedges a significant part of its foreign currency exposure in respect of sales and purchases orders via natural hedges within its operational portfolio. The Group uses mainly forward exchange contracts to hedge its remaining currency risk, all with a maturity of less than one year from the reporting date. When necessary, forward exchange contracts are rolled over at maturity. The Group has not applied hedge accounting.
Interest on borrowings is denominated in currencies that predominantly match the cash flows generated by the underlying operations of the Group, primarily euros (\u20ac), pound sterling (GBP) and US dollars (USD). This provides an economic hedge without derivatives being entered into and therefore the Group has not applied hedge accounting.
The Group\u2019s investments in foreign non-euro subsidiaries are considered to be long-term operations of the Group and are therefore not hedged. Currency translation differences on these long-term operations are reported in the translation reserve in equity.
The exposure to foreign currency risk in current assets and current liabilities is mainly related to balances denominated in USD and GBP, for which the notional amounts (stated in \u20ac) amount to:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| \u00a0 | USD | GBP | USD | GBP |
| Financial assets except for cash and cash equivalents | 210,778 | 3,086 | 158,478 | 3,240 |
| Cash and cash equivalents | 70,961 | 448 | 66,774 | 37,186 |
| Financial liabilities | -284,785 | -17,291 | -173,622 | -151,927 |
| Gross balance sheet exposure | -3,045 | -13,757 | 51,630 | -111,501 |
A 10% strengthening of the euro against the USD and GBP at year-end would have increased (decreased) equity and the income statement by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| \u00a0 | Profit or loss | Equity | Profit or loss | Equity |
| USD | 277 | 277 | -4,694 | -4,694 |
| GBP | 1,251 | 1,251 | 10,136 | 10,136 |
A 10% weakening of the euro against the USD and GBP at year-end would have had the equal but opposite effect in euros to the amounts shown above, on the basis that all other variables remain constant.
The Group adopts a policy of carefully managing its interest rate risk. On a regular basis, the Board of Directors assesses the Group's interest rates versus external benchmarks, ensuring that management will affect financial transactions resulting in fixed borrowing interest rates in case limits are exceeded. As of the reporting date, the external bank borrowings are on a floating interest rate basis.
The Group\u2019s main interest rate risk arises from a long-term borrowing with variable rate (EURIBOR), which exposes the Group to cash flow interest rate risk. The cash flow risk is mitigated through the usage of an interest rate cap.\u00a0
On the reporting date, the interest rate profile of the Group\u2019s interest-bearing financial instruments expressed in their carrying amounts was:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Fixed rate instruments | \u00a0 | \u00a0 |
| Financial liabilities | -1,005,746 | -407,478 |
| \u00a0 | -1,005,746 | -407,478 |
| Variable rate instruments | \u00a0 | \u00a0 |
| Financial assets | 303,945 | 484,874 |
| Financial liabilities | -838,244 | -1,368,621 |
| \u00a0 | -534,299 | -883,747 |
An increase (decrease) of 100 basis points in interest rates on the reporting date would have decreased (increased) equity and the income statement (not considering income tax impact) by the annual amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates and the potential mitigating effect of the interest rate cap, remain constant.
| (in thousands of \u20ac) | Profit or loss - 2024 | Equity - 2024 | ||
|---|---|---|---|---|
| \u00a0 | 100 bp | 100 bp | 100 bp | 100 bp |
| \u00a0 | Increase | Decrease | Increase | Decrease |
| Variable rate instruments | -8,382 | 8,382 | -8,382 | 8,382 |
| Cash flow sensitivity (net) | -8,382 | 8,382 | -8,382 | 8,382 |
| (in thousands of \u20ac) | Profit or loss - 2023 | Equity - 2023 | ||
|---|---|---|---|---|
| \u00a0 | 100 bp | 100 bp | 100 bp | 100 bp |
| \u00a0 | Increase | Decrease | Increase | Decrease |
| Variable rate instruments | -13,686 | 13,686 | -13,686 | 13,686 |
| Cash flow sensitivity (net) | -13,686 | 13,686 | -13,686 | 13,686 |
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group's processes, personnel, technology, and infrastructure, and from external factors other than credit, market, and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behavior. Operational risks arise from all of the Group's operations. The Group's objective is to manage operational risks so as to balance the avoidance of financial losses and damage to the Group's reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.
On a selective basis, the Group has outstanding foreign exchange swap contracts to manage the exposure to foreign currency risk on outstanding foreign currency receivables/payables, as well as an interest rate cap relating to its variable rate interest risk.
To limit its interest rate risk exposure, the Group entered into interest rate cap agreements (interest rate cap) in May 2022, that will expire on March 31, 2025. The interest rate cap modifies the Company\u2019s exposure to interest rate risk by converting a portion of the Company\u2019s variable-rate debt to a fixed-rate basis, thereby reducing the impact of interest rate changes on interest expense. The Group recognizes fair value gains and losses within the financial result.
In connection with business combinations, the Group has outstanding liabilities for contingent consideration and for put options on non-controlling interests. The Group\u2019s financial instruments per category are shown below including the fair value and hierarchy information.
The interest rate cap qualifies for the level 2 category in the fair value hierarchy due to the fact that it is not traded in an active market and the fair value is\u00a0determined using valuation techniques (option pricing model) which maximize the use of observable market data. Since\u00a0all significant inputs required to fair-value the instrument are observable, the instrument is classified as level 2. All derivatives related to forward exchange contracts are classified as level 2. Contingent consideration qualifying as earnout and put options on non-controlling interests are classified as level 3. For the calculation basis of fair values, see also note 2.17.
The carrying amount of the other financial assets and liabilities approximates their fair value.
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 370 | 370 | \u00a0 | 370 | \u00a0 | 370 |
| Derivatives | 4 | - | \u00a0 | - | \u00a0 | 0 | \u00a0 | - |
| Other investments | 4 | 10 | 1,258 | 1,268 | \u00a0 | 1,268 | \u00a0 | 1,268 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 496,379 | 496,379 | \u00a0 | 496,379 | \u00a0 | 496,379 |
| Other receivables | 19 | 16,816 | 75,837 | 92,653 | \u00a0 | 92,653 | \u00a0 | 92,653 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 600 | \u00a0 | 600 | \u00a0 | 600 | \u00a0 | 600 |
| Cash and cash equivalents | 20 | \u00a0 | 303,945 | 303,945 | \u00a0 | 303,945 | \u00a0 | 303,945 |
| Total financial assets | \u00a0 | 17,426 | 877,793 | 895,219 | 0 | 895,219 | 0 | 895,219 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,748,391 | 1,748,391 | \u00a0 | 1,748,391 | \u00a0 | 1,748,391 |
| Other financial liabilities | \u00a0 | 26,707 | 6,459 | 33,166 | \u00a0 | 6,459 | 26,707 | 33,166 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 76,453 | 76,453 | \u00a0 | 76,453 | \u00a0 | 76,453 |
| Bank overdraft | 20 | \u00a0 | 19,146 | 19,146 | \u00a0 | 19,146 | \u00a0 | 19,146 |
| Trade payables | 24 | \u00a0 | 486,804 | 486,804 | \u00a0 | 486,804 | \u00a0 | 486,804 |
| Other current liabilities excl derivatives | 24 | 77,624 | 136,028 | 213,651 | \u00a0 | 136,028 | 77,624 | 213,651 |
| Derivatives | 24 | 112 | \u00a0 | 112 | \u00a0 | 112 | \u00a0 | 112 |
| Total financial liabilities | \u00a0 | 104,443 | 2,473,281 | 2,577,724 | 0 | 2,473,393 | 104,331 | 2,577,724 |
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 726 | 726 | \u00a0 | 726 | \u00a0 | 726 |
| Derivatives | 4 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 |
| Other investments | 4 | 0 | 1,178 | 1,178 | \u00a0 | 1,178 | \u00a0 | 1,178 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 444,863 | 444,863 | \u00a0 | 444,863 | \u00a0 | 444,863 |
| Other receivables | 19 | 11,591 | 65,442 | 77,033 | \u00a0 | 77,033 | \u00a0 | 77,033 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 57 | \u00a0 | 57 | \u00a0 | 57 | \u00a0 | 57 |
| Cash and cash equivalents | 20 | \u00a0 | 484,874 | 484,874 | \u00a0 | 484,874 | \u00a0 | 484,874 |
| Total financial assets | \u00a0 | 17,778 | 997,086 | 1,014,864 | 0 | 1,014,864 | 0 | 1,014,864 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,650,982 | 1,650,982 | \u00a0 | 1,650,982 | \u00a0 | 1,650,982 |
| Other financial liabilities | \u00a0 | 65,072 | 4,744 | 69,816 | \u00a0 | 4,744 | 65,072 | 69,816 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 106,831 | 106,831 | \u00a0 | 106,831 | \u00a0 | 106,831 |
| Bank overdraft | 20 | \u00a0 | 18,286 | 18,286 | \u00a0 | 18,286 | \u00a0 | 18,286 |
| Trade payables | 24 | \u00a0 | 434,085 | 434,085 | \u00a0 | 434,085 | \u00a0 | 434,085 |
| Other current liabilities excl derivatives | 24 | 133,969 | 227,495 | 361,464 | \u00a0 | 227,495 | 133,969 | 361,464 |
| Derivatives | 24 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 |
| Total financial liabilities | \u00a0 | 202,961 | 2,442,423 | 2,645,385 | 0 | 2,446,344 | 199,041 | 2,645,385 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade receivables | 496,379 | 444,863 |
| Other receivables | 92,653 | 77,033 |
| \u00a0 | 589,031 | 521,896 |
See note 4.1.1 for aging and allowance of these receivables. Other receivables relate mainly to prepayments.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Bank balances and cash on hand | 303,945 | 484,874 |
| Bank overdrafts (-) | -19,146 | -18,286 |
| Cash and cash equivalents (net) in the cash flow statement | 284,799 | 466,588 |
Interest rates payable for bank overdrafts used have a variable interest rate based on Euribor plus a margin.
The Group\u2019s debt finance consists mainly of the following financial instruments:
| (in thousands of \u20ac) | Interest rate (base) | Interest rate (margin) | Expiration | Notional amount | Carrying amount |
|---|---|---|---|---|---|
| EUR term loan | 3.20% | 1.90% | 2029 | 600,000 | 592,664 |
| Revolving Credit Facility | N/A1 | 1.65% | 2029 | 0 | 0 |
| Bond 2023 | 5.75% | N/A | 2028 | 400,000 | 395,083 |
| Bond 2024 | 4.75% | N/A | 2029 | 600,000 | 595,663 |
| Schuldschein | 2,64% (variable) & 4.74% (fixed) | 2.55% | 2027 & 2029 | 30,000 | 29,949 |
| Other bank loans | 1,00% - 14,56% | N/A | 2026 | 23,698 | 23,698 |
| Accrued interest | \u00a0 | \u00a0 | \u00a0 | 24,032 | 24,032 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,677,730 | 1,661,091 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 1,630,555 | 1,613,916 |
| Current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 47,175 | 47,175 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,677,730 | 1,661,091 |
| (in thousands of \u20ac) | Interest rate (base) | Interest rate (margin) | Expiration | Notional amount | Carrying amount |
|---|---|---|---|---|---|
| First lien \u20ac | 4.07% | 1.90% | 2026 | 900,000 | 896,911 |
| First lien GBP | 5.26% | 2.15% | 2026 | 148,196 | 147,623 |
| Revolving Credit Facility | N/A1 | 1.65% | 2028 | 0 | 0 |
| Bond 2023 | 5.75% | N/A | 2028 | 400,000 | 392,478 |
| Schuldschein | 2.64%-3.92% (variable & fixed) | 1.9%-2.5% | 2025-2029 | 108,500 | 108,439 |
| Other bank loans | 0,50% - 17,62% | N/A | 2026 | 59,215 | 59,215 |
| Accrued interest | \u00a0 | \u00a0 | \u00a0 | 26,528 | 26,528 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,642,439 | 1,631,194 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 1,561,879 | 1,550,634 |
| Current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 80,560 | 80,560 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,642,439 | 1,631,194 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| As of January 1 | 1,631,195 | 1,303,717 |
| Cash flows from loans and borrowings | 42,293 | 252,274 |
| Transaction costs paid | -13,072 | -8,117 |
| Changes arising from business combinations | 2,054 | 62,497 |
| Capitalized transactions cost amortized | 7,745 | 3,113 |
| Changes in interest accruals | -2,496 | 14,904 |
| Currency translation differences | -6,628 | 2,806 |
| As of the end of the period | 1,661,091 | 1,631,195 |
In September 2024, the Group concluded a \u20ac600 million Term Loan Facility (maturing in 2029) and additionally issued a new bond totaling to \u20ac600 million (due in 2029), to refinance its existing EUR and GBP Term Loans (maturing in 2026) as well as the portion of the outstanding Schuldschein loans due in 2025. At the same time, the Group has refinanced and increased its Revolving Credit Facility to maturity in 2029 (with 2 one-year extension possibilities) and \u20ac500 million, respectively.
Related to these refinancing transactions, a total of \u20ac13.1 million transaction costs were capitalized in 2024 and are amortized over the lending period of the underlying instruments. The remaining capitalized transaction costs paid in relation to the refinanced EUR and GBP Term Loans were amortized in 2024.
In December 2024, a portion of \u20ac78.5 million of the outstanding Schuldschein loan due in 2027 was repaid as well.
As at December 31, 2024, the Group holds bank borrowings at variable interest rates from a lender's syndicate in the form of a Term Loan Facility of \u20ac600 million (2023: \u20ac900 million and GBP 128.8 million) and a Revolving Credit Facility of \u20ac500 million (2023: \u20ac350 million). The Revolving Credit Facility is fully undrawn as of December 31, 2024 (2023: facility of \u20ac350 million fully unused).
The variable interest rates are based on EURIBOR (capped at a floor of 0%), and a margin based on the Group's total net leverage. The margin is capped at 2.40% for the \u20ac\u00a0Term Loan Facility (1.90% until March 26, 2025), and 2.15% (1.65% until March 26, 2025) for the Revolving Credit Facility. At the latest in September 2025, the Group may incorporate an adjustment to the margin linked to its new Impact 2030 sustainability targets.
In addition to the Term Loan Facility and Revolving Credit Facility, the Group also holds different Schuldschein agreements, of which \u20ac30.0 million was used as of December 31, 2024 (2023: \u20ac108.5 million). The Schuldschein is a semi-private bond type of financing, with maturity dates of the outstanding tranches in 2027 and 2029. Interest charges are partly fixed at 4.74% and partly variable (6m Euribor plus margin 2.55%). The Schuldschein agreements can be repaid in advance under certain conditions.
In March 2023, Azelis Group issued a \u20ac400\u00a0million bond at a fixed interest rate of 5.75%, which is due in 2028. In September 2024, the Company issued a \u20ac600 million bond at a fixed interest rate of 4.75%, which is due in 2029.
In accordance with its policy on managing the risk related to interest rates (refer to the Risk Management section), Azelis has interest rate cap agreements for a total loan amount of \u20ac700 million, expiring March 31, 2025, providing the Group with an interest rate cap of 3% on EURIBOR until that date.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| As of January 1 | 126,619 | 101,558 |
| Business combination | 981 | 17,907 |
| New contracts | 67,114 | 29,863 |
| Remeasurements | 6,836 | 6,096 |
| Cash out | -38,073 | -28,704 |
| Currency translation differences | 277 | -101 |
| As of the end of the period | 163,753 | 126,619 |
For disclosure on the Group's right-of-use assets, refer to note 16.2.
The carrying amount of loans and borrowings and bank overdrafts concluded under supplier finance arrangements are \u20ac26.2 million as of December 31, 2024 (as of December 31, 2023: \u20ac35.3 million), of which suppliers fully received the payment from the financial institution. The non-cash flows of trade payables substituted by loans and borrowings under the Group's supplier finance arrangements during 2024 amount to \u20ac70.7 million (2023: \u20ac156.3\u00a0million). The extended period provided under supplier financing arrangements increased from 31-60 days to 90-180 days in average.
The financing arrangements of Azelis Group NV and its subsidiaries contain, since September 2021, a financial maintenance covenant, being the total net leverage ratio, which needs to be less than 4.50: 1.00 and is tested twice annually.
As of December 31, 2024, the total net leverage ratio is 2.9: 1.0 (2023: 2.5: 1.0), therefore the Group has complied with the financial covenants. The Group monitors compliance with all covenants on the basis of the monthly reporting process and the continuous cash flow forecasts.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade payables | 486,804 | 434,085 |
| Other taxes | 12,199 | 13,032 |
| Employee and social security payables | 69,191 | 71,409 |
| Derivatives | 112 | 3,921 |
| Other payables | 132,261 | 277,023 |
| Total current payables | 700,567 | 799,470 |
| \u00a0 | \u00a0 | \u00a0 |
| Other payables | 33,166 | 69,816 |
| Other non-current liabilities | 33,166 | 69,816 |
The other current and non-current payables mainly consist of put options over non-controlling interests totaling \u20ac81.6 million (2023: \u20ac171.1 million), and earnouts and deferred payments in connection with acquisitions. The decrease in 2024 is mainly attributable to settlement of put option liabilities (Note 21.7).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5069-1": { "value": "Financial assets and liabilities are classified into three categories: measured at amortized cost, at fair value through other comprehensive income (FVTOCI) and at fair value through profit and loss (FVTPL).
The Group uses derivative financial instruments such as forward exchange contracts, interest rate swaps to hedge its foreign currency risk and interest rate risk, and interest rate cap to hedge its interest rate risks associated with floating-rate borrowings under the Group\u2019s credit facilities.
Derivatives are initially recognized as other financial assets at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value through profit and loss at the end of each reporting period. The derivative is only used for economic hedging purposes and not as a speculative investment.\u00a0 The Group does not apply hedge accounting. Therefore, changes in the fair value of the Group\u2019s derivative financial instrument are recognized immediately in the consolidated statement of profit or loss and are included in finance costs.
The Group has granted put options for remaining non-controlling interests in acquired companies, giving the holders the right to sell to the Group their investments in these subsidiaries. These financial liabilities do not bear interest. In accordance with IAS 32, the Group recognizes a redemption liability corresponding to the present value of the estimated exercise price of the option. The redemption liability is included in other current and non-current liabilities, and the counterpart is a reduction from the Group's equity. At the end of each reporting period, the liability is adjusted to reflect changes in the estimated exercise price. These subsequent changes are accounted for in the income statement.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5070-1": { "value": "The Group recognizes financial instruments when it enters into a contract. Financial instruments are derecognized when the contractual rights to the cash flows of the asset expire, or the rights to receive the contractual cash flows on the financial asset are transferred in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred. With regard to its trade receivables, the Group engages in non-recourse factoring programs. Receivables are derecognized when the factor pays the Group, which also triggers a fee to be paid for the credit risk assumed by the factor. Factoring fees are recognized in the Group's financial expenses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerecognitionOfFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5071-1": { "value": "Initially, financial instruments are recognized at their fair value. Transaction costs directly attributable to the acquisition or issue of financial instruments are recognized on the initial measurement date, except for financial instruments measured at FVTPL. Transaction costs related to FVTPL financial instruments are recorded in the profit or loss at initial recognition.
The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. However, costs or fees that are incremental and directly related to the issue of the new debt instrument are treated as transaction costs of the new liability, and hence are spread forward by adjusting the effective interest rate.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForBorrowingCostsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5071-2": { "value": "Initially, financial instruments are recognized at their fair value. Transaction costs directly attributable to the acquisition or issue of financial instruments are recognized on the initial measurement date, except for financial instruments measured at FVTPL. Transaction costs related to FVTPL financial instruments are recorded in the profit or loss at initial recognition.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognisingDifferenceBetweenFairValueAtInitialRecognitionAndAmountDeterminedUsingValuationTechniqueExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "h4-blocktag-i5072-1": { "value": "The classification of financial assets is based on two criteria: the objective of the Company's business model for managing the assets, and whether the instruments' contractual cash flows represent 'solely payments of principal and interest' on the principal amount outstanding (known as the 'SPPI-test').
Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components, when they are recognized at fair value. The Group holds trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method. Other receivables are initially measured at fair value and subsequently measured at amortized cost.
The Group recognizes an allowance for expected credit losses (ECLs) for all financial assets that are not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
The impairment methodology applied depends on whether there has been a significant increase in credit risk; if so, the loss allowance is measured as the lifetime expected credit loss. If not, the allowance is measured as the 12-month expected credit loss. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the receivables (see note 4.1 for further details). While cash and cash equivalents and other loan receivables are also subject to the impairment requirements of IFRS 9, no impairment loss was identified as these assets are considered as low-credit risk.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses of financial assets are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
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.
Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFinancialAssetsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5074-2": { "value": "Trade receivables are recognized initially at the amount of consideration that is unconditional, unless they contain significant financing components, when they are recognized at fair value. The Group holds trade receivables with the objective of collecting the contractual cash flows and therefore measures them subsequently at amortized cost using the effective interest method. Other receivables are initially measured at fair value and subsequently measured at amortized cost.
The impairment methodology applied depends on whether there has been a significant increase in credit risk; if so, the loss allowance is measured as the lifetime expected credit loss. If not, the allowance is measured as the 12-month expected credit loss. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the receivables (see note 4.1 for further details). While cash and cash equivalents and other loan receivables are also subject to the impairment requirements of IFRS 9, no impairment loss was identified as these assets are considered as low-credit risk.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses of financial assets are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5076-1": { "value": "Trade and other payables are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. Loans and borrowings are initially recognized at fair value, net of transaction costs incurred. Loans and borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
An exchange between an existing borrower and lender of financial liabilities with substantially different terms is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability. Similarly, a substantial modification of the terms of an existing financial liability or a part of it (whether or not attributable to the financial difficulty of the debtor) is accounted for as an extinguishment of the original financial liability and the recognition of a new financial liability.
The terms are substantially different if the discounted present value of the cash flows under the new terms, including any fees paid net of any fees received and discounted using the original effective interest rate, is at least 10 percent different from the discounted present value of the remaining cash flows of the original financial liability. If an exchange of debt instruments or modification of terms is accounted for as an extinguishment, any costs or fees incurred are recognized as part of the gain or loss on the extinguishment. However, costs or fees that are incremental and directly related to the issue of the new debt instrument are treated as transaction costs of the new liability, and hence are spread forward by adjusting the effective interest rate.
The Group classifies financial liabilities that arise from supplier finance arrangements within loans and borrowings and bank overdrafts in the statement of financial position if they have a similar nature and function to bank loans and bank overdrafts. This is the case if the supplier finance arrangement is part of the financing used in the Group\u2019s normal operating cycle, the level of security provided is similar to bank loans and the terms of the liabilities of the supplier finance arrangement are extended compared to trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in loans and borrowings in the consolidated statement of financial position are included in financing activities in the consolidated statement of cash flows.
Under supplier finance arrangements, trade payables are transferred by the Group to a financial institution who assumes its creditor obligations. Following this transfer, the Group will no longer be to offset any of the transferred payables against credit notes received from the supplier.
For the purpose of the consolidated statement of cash flows, management considers that the finance provider settles the invoices as a payment agent on behalf of the entity. The payments made by the finance provider are therefore presented as operating cash outflows and financing cash inflows in equal but opposite amounts at the point when the finance provider pays the supplier. When the Group subsequently pays the amount outstanding to the finance provider, this is presented as a financing cash outflow.
Trade and other payables are recognized initially at their fair value and subsequently measured at amortized cost using the effective interest method. Loans and borrowings are initially recognized at fair value, net of transaction costs incurred. Loans and borrowings are subsequently measured at amortized cost. Any difference between the proceeds (net of transaction costs) and the redemption amount is recognized in profit or loss over the period of the borrowings using the effective interest method.
The Group classifies financial liabilities that arise from supplier finance arrangements within loans and borrowings and bank overdrafts in the statement of financial position if they have a similar nature and function to bank loans and bank overdrafts. This is the case if the supplier finance arrangement is part of the financing used in the Group\u2019s normal operating cycle, the level of security provided is similar to bank loans and the terms of the liabilities of the supplier finance arrangement are extended compared to trade payables that are not part of the arrangement. Cash flows related to liabilities arising from supplier finance arrangements that are classified in loans and borrowings in the consolidated statement of financial position are included in financing activities in the consolidated statement of cash flows.
Under supplier finance arrangements, trade payables are transferred by the Group to a financial institution who assumes its creditor obligations. Following this transfer, the Group will no longer be to offset any of the transferred payables against credit notes received from the supplier.
For the purpose of the consolidated statement of cash flows, management considers that the finance provider settles the invoices as a payment agent on behalf of the entity. The payments made by the finance provider are therefore presented as operating cash outflows and financing cash inflows in equal but opposite amounts at the point when the finance provider pays the supplier. When the Group subsequently pays the amount outstanding to the finance provider, this is presented as a financing cash outflow.
The Group uses derivative financial instruments such as forward exchange contracts, interest rate swaps to hedge its foreign currency risk and interest rate risk, and interest rate cap to hedge its interest rate risks associated with floating-rate borrowings under the Group\u2019s credit facilities.
Derivatives are initially recognized as other financial assets at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value through profit and loss at the end of each reporting period. The derivative is only used for economic hedging purposes and not as a speculative investment.\u00a0 The Group does not apply hedge accounting. Therefore, changes in the fair value of the Group\u2019s derivative financial instrument are recognized immediately in the consolidated statement of profit or loss and are included in finance costs.
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract, using a risk-free interest rate increased by an appropriate additional spread related to the credit risk of the Group and the risk of the counterparty.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "h4-blocktag-i5079-2": { "value": "The Group uses derivative financial instruments such as forward exchange contracts, interest rate swaps to hedge its foreign currency risk and interest rate risk, and interest rate cap to hedge its interest rate risks associated with floating-rate borrowings under the Group\u2019s credit facilities.
Derivatives are initially recognized as other financial assets at fair value on the date a derivative contract is entered into, and they are subsequently remeasured to their fair value through profit and loss at the end of each reporting period. The derivative is only used for economic hedging purposes and not as a speculative investment.\u00a0 The Group does not apply hedge accounting. Therefore, changes in the fair value of the Group\u2019s derivative financial instrument are recognized immediately in the consolidated statement of profit or loss and are included in finance costs.
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract, using a risk-free interest rate increased by an appropriate additional spread related to the credit risk of the Group and the risk of the counterparty.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDerivativeFinancialInstrumentsAndHedgingExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "h4-blocktag-i5082-2": { "value": "The Group has granted put options for remaining non-controlling interests in acquired companies, giving the holders the right to sell to the Group their investments in these subsidiaries. These financial liabilities do not bear interest. In accordance with IAS 32, the Group recognizes a redemption liability corresponding to the present value of the estimated exercise price of the option. The redemption liability is included in other current and non-current liabilities, and the counterpart is a reduction from the Group's equity. At the end of each reporting period, the liability is adjusted to reflect changes in the estimated exercise price. These subsequent changes are accounted for in the income statement.
If the Group has also obtained a call option on the same remaining non-controlling interests of the acquired companies, this option is taken into account for the control assessment in respect of the business combination.
The cash outflow for acquisition of non-controlling interest due to call/put option settlement is included in the financing activities of the consolidated statement of cash flows.
In a business combination, the acquired assets and liabilities are measured at fair value. The Group uses assumptions and non-observable information to prepare fair value of the assessed, where no observable information is available. The actual market performance can subsequently differ from the assumptions. The most important assumptions are disclosed in the note for business combinations. (See note 7).
In connection with business combinations, the Group has outstanding liabilities for contingent consideration and for put options on non-controlling interests. The Group\u2019s financial instruments per category are shown below including the fair value and hierarchy information.
The Group completed the below acquisitions during the 2024 financial year:
On January 31, 2024, Azelis acquired 100% of the shares of Agspec Pty Ltd (Agspec), a leading distributor of crop nutrition, crop protection and specialty agricultural products in Australia. Agspec's portfolio of crop protection and crop nutrition products complements Azelis\u2019 existing offering, enabling it to offer a wider and more diversified range of products and services to its customers in the agricultural and horticultural markets.
On February 1, 2024, Azelis acquired 100% of the shares of Localpack SA (Localpack), a specialty chemical distributor active in both the life sciences and industrial chemicals segments in Colombia. Localpack is one of the leading specialty chemical distributors in the domestic market. Localpack\u2019s long-standing relationships with global and regional principals, and the technical product expertise that it has built over the years, expand Azelis\u2019 lateral value chain across Latin America.
On March 1, 2024, Azelis acquired 100% of the shares of Oktrade Kimya Sanayi ve Ticaret Anonim \u015eirketi (Oktrade), a distributor of specialty personal care ingredients based in Istanbul, T\u00fcrkiye. Already active in the Turkish personal care market, Azelis enhances its offering by strengthening its lateral value chain with this acquisition, enabling it to become a leader in this fast-growing market.
On June 1, 2024, Azelis acquired control over the distribution business of DBH Osthandelsgesellschaft mbH (DBH), a specialty chemicals distributor focused on AM&A (Advanced Materials & Additives) in Germany and Central & Eastern Europe (CEE). Azelis enhances its lateral value chain by leveraging DBH's diverse product portfolio, its expertise in the German rubber and plastic additives market and its long-standing partnerships with blue-chip principals.
On August 12, 2024, Azelis acquired 100% of the shares of PT Marga Dwi Kencana Ltd (MDK), one of the leading distributors serving the personal care market in Indonesia. MDK\u2019s product portfolio strategically complements Azelis\u2019 lateral value chain, expanding the Group\u2019s platform to serve the high-growth personal care market, and reinforces its footprint in the broader life sciences market in the country.
On October 1, 2024, Azelis acquired 100% of the shares of CPS Chemicals (Coatings) Pty Ltd (CPS) in South Africa, a specialty chemicals distributor to the paint, ink, resins, paper, plastics, and rubber industries. The acquisition expands the Group\u2019s footprint in South Africa, complementing Azelis\u2019 lateral value chain in the CASE segment.
On November 29, 2024, Azelis acquired 100% of the shares of Hortimex Sp. z o.o. (Hortimex), a specialty chemicals distributor active in the food ingredients and nutraceuticals segments serving the Polish market. The acquisition expands the Group\u2019s footprint in Poland, complementing Azelis\u2019 lateral value chain in the Food & Nutrition segment.
On December 31, 2024, Azelis acquired 100% of the shares of Haarla Oy, a specialty distributor of food ingredients and industrial chemicals based in Finland. Its product portfolio strategically enhances Azelis\u2019 lateral value chain, reinforcing its footprint in Life Sciences and Industrial Chemicals in the Nordics.
These aforementioned acquisitions together generate over \u20ac140 million of revenue annually. In 2024, these acquisitions together added \u20ac58.6 million of revenue, \u20ac11.2 million of Adjusted EBITA and \u20ac5.4 million of net profit to the Group's net result.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Assets acquired and liabilities assumed | \u00a0 | \u00a0 |
| Distribution rights | 72,957 | 247,748 |
| Other intangible assets | 178 | 6,336 |
| Property, plant and equipment | 857 | 16,901 |
| Right-of-use assets | 981 | 17,907 |
| Deferred tax assets | 1,566 | 6,511 |
| Other non-current financial assets | 10 | 56 |
| Inventories | 14,349 | 82,050 |
| Trade and other receivables | 20,314 | 96,885 |
| Cash and cash equivalents | 6,809 | 23,616 |
| Loans and borrowings non current | -188 | -9,182 |
| Lease liabilities non current | -197 | -14,510 |
| Deferred tax liabilities | -15,576 | -68,395 |
| Trade and other payables | -18,440 | -52,417 |
| Bank overdrafts | -173 | -3,300 |
| Loans and borrowings current | -1,867 | -53,316 |
| Lease liabilities current | -784 | -3,396 |
| Provisions | -799 | -906 |
| Employee benefit obligations | -234 | -872 |
| Total fair value identified assets acquired and liabilities assumed | 79,764 | 291,716 |
| Non-controlling interests | -390 | -18,945 |
| Estimated earnout liabilities | 7,570 | 33,701 |
| Deferred payments | 4,587 | 6,565 |
| Consideration paid in cash | 143,174 | 488,211 |
| Total consideration | 155,332 | 528,478 |
| Goodwill | 75,958 | 255,705 |
The fair values of the acquired identifiable assets and liabilities, and the value of the consideration paid are accounted for on a provisional basis. Based on currently available information, Azelis does not foresee significant adjustments to these provisional amounts. The purchase price allocations will be finalized at a later stage and may result in adjustments to provisional values as a result of completing the initial accounting from the acquisition date. The fair values of the acquired net assets, based on a provisional assessment, are summarized in the table above. No significant indemnification assets or contingent liabilities had to be recognized in the business combinations.
The considerations are primarily paid for in cash and, depending on the acquisition, also consist of deferred payments and/or accruals for estimated earnout. For 2024 acquisitions, deferred payments and initial earnout liabilities, recognized as part of the consideration paid, total \u20ac12.2 million (2023: \u20ac40.3 million). Earnout payments are all contingent on the profitability of the acquired company at a future point in time and have been estimated based on the business plan of the acquired company.
Total goodwill of Azelis has increased by \u20ac127.6 million in 2024, of which \u20ac76.0 million is attributable to the abovementioned acquisitions in 2024. The remainder is mainly attributable to currency translation and reflected in other comprehensive income, and to adjustments for hyperinflation.
Acquisitions are accounted for using the acquisition method. Goodwill represents the excess of acquisition cost over the fair values of identified acquired assets and liabilities, and mainly represents the business knowledge and the qualified staff. Goodwill is generally not deductible for tax purposes. The trademark and the distribution rights have been valued based upon the expected return being generated through strategic mandates. The trade and other receivables include an amount of \u20ac2.2 million for expected credit loss provisions. Certain transactions relating to key employees\u2019 compensation plans are considered as separate transactions and are not included in the business combination accounting in accordance with IFRS 3.
If the above acquisitions would have occurred at the start of 2024, management estimates that, for 2024, the consolidated revenue would have been \u20ac4,312.5 million, the consolidated Adjusted EBITA would have been \u20ac481.3 million and the consolidated net result for the year would have been \u20ac198.6 million.
During 2024, the Group incurred acquisition-related expenses of \u20ac3.2 million (2023: \u20ac5.6 million) in total, in connection with the costs of external advisors, due diligence, and fees paid to the institutions involved. These expenses are recognized in the consolidated income statement as part of external services and are considered as part of adjustments to determine Adjusted EBITA of the period.
The other current and non-current payables mainly consist of put options over non-controlling interests totaling \u20ac81.6 million (2023: \u20ac171.1 million), and earnouts and deferred payments in connection with acquisitions. The decrease in 2024 is mainly attributable to settlement of put option liabilities (Note 21.7).
", "dimensions": { "concept": "ifrs-full:DisclosureOfBusinessCombinationsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5088-1": { "value": "The Group recognizes an allowance for expected credit losses (ECLs) for all financial assets that are not held at FVTPL. ECLs are based on the difference between the contractual cash flows due in accordance with the contract and all the cash flows that the Group expects to receive, discounted at an approximation of the original effective interest rate.
The impairment methodology applied depends on whether there has been a significant increase in credit risk; if so, the loss allowance is measured as the lifetime expected credit loss. If not, the allowance is measured as the 12-month expected credit loss. For trade receivables, the Group applies the simplified approach permitted by IFRS 9, which requires lifetime expected losses to be recognized from initial recognition of the receivables (see note 4.1 for further details). While cash and cash equivalents and other loan receivables are also subject to the impairment requirements of IFRS 9, no impairment loss was identified as these assets are considered as low-credit risk.
Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics.
Impairment losses of financial assets are recognized in the income statement. An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForImpairmentOfFinancialAssetsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5092-3": { "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:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5094-1": { "value": "Cash and cash equivalents comprise cash balances and call deposits. Bank overdrafts that are repayable on demand and form an integral part of the Group\u2019s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyToDetermineComponentsOfCashAndCashEquivalents", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5095-2": { "value": "Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the income statement unless it relates to items recognized in other comprehensive income, in which case it is recognized in other comprehensive income.
Current tax is the expected tax payable (receivable) on the taxable income (loss) for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIncomeTaxExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5095-3": { "value": "Income tax expense comprises current and deferred taxes. Income tax expense is recognized in the income statement unless it relates to items recognized in other comprehensive income, in which case it is recognized in other comprehensive income.
Current tax is the expected tax payable (receivable) on the taxable income (loss) for the period, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.
Deferred income tax is provided, using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized or the deferred income tax liability is settled.
A deferred tax asset is recognized to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilized. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realized.
In assessing the realization of deferred tax assets, management considers the extent to which it is probable that the deferred tax asset will be realized (note 14). The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profit during the periods in which those temporary differences and tax loss carry forwards are available. Management considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. (See note 14.2)
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDeferredIncomeTaxExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5096-1": { "value": "The Group applies the first-in, first-out (FIFO) method to represent inventory movements. Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises direct materials, direct labor and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Impairments of inventories to net realizable value are recognized in the profit or loss as part of \u2018cost for goods and consumables\u2019. If the value of impaired inventories increases, the impairment will be reversed to the lowest of the increased net realizable value and the original cost.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForMeasuringInventories", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5096-3": { "value": "The Group applies the first-in, first-out (FIFO) method to represent inventory movements. Inventories are measured at the lower of cost and net realizable value. The cost of inventories comprises direct materials, direct labor and an appropriate proportion of variable and fixed overhead expenditure, the latter being allocated on the basis of normal operating capacity. Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Impairments of inventories to net realizable value are recognized in the profit or loss as part of \u2018cost for goods and consumables\u2019. If the value of impaired inventories increases, the impairment will be reversed to the lowest of the increased net realizable value and the original cost.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Inventories | 714,574 | 619,636 |
| Valuation allowance/write downs | -36,629 | -56,845 |
| Net carrying amount of inventories | 677,945 | 562,790 |
Azelis' inventories mainly consist of finished goods.
Usage of inventories is recorded under 'Costs for goods and consumables' in the consolidated income statement. In 2024, write-downs of inventory of \u20ac15.6 million (2023: \u20ac10.3 million) are included under 'Costs for goods and consumables'.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInventoriesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5097-1": { "value": "Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary shares and share options are recognized in equity net of tax.
The share premium consists of additional paid-in capital exceeding the par value of outstanding shares.
Treasury share purchases are recognized as a deduction from equity (section other reserves). No gain or loss is recognized on the purchase, sale, issue or cancellation of treasury shares. Consideration paid or received is recognized directly in equity.
Per Belgian regulations and the Company's Articles of Association, Azelis Group NV must allocate to legal reserve a minimum of 5% of the standalone net profit, until such reserve reaches 10% of the share capital. As of December 31, 2024, the legal reserve (as included in other reserves) amounts to \u20ac488.2 thousand (2023: \u20ac26.0 thousand).
The basic earnings per share and diluted earnings per share are calculated as follows:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| Net group profit/loss (-) attributable to shareholders (in thousands of \u20ac) | 180,693 | 177,704 |
| Average number of shares (in thousand shares) | 243,536 | 239,856 |
| Basic earnings per share | 0.74 | 0.74 |
| Dilution adjusted average number of shares (in thousand shares) | 243,779 | 240,102 |
| Diluted earnings per share | 0.74 | 0.74 |
The average number of shares are calculated as:
| (in thousands) | 2024 | 2023 |
|---|---|---|
| Ordinary shares issued (entitled to dividend) | 243,922 | 233,846 |
| Weighted effect of treasury shares | -386 | -246 |
| Weighted effect of new ordinary shares issued | 0 | 6,256 |
| Average number of shares for basic EPS | 243,536 | 239,856 |
| Weighted effect of share-based payment | 243 | 247 |
| Average number of shares for diluted EPS | 243,779 | 240,102 |
On May 19, 2023, Azelis increased its share capital by (rounded) \u20ac200\u00a0million, following the issuance of 10,075,566 new shares, at a price of \u20ac19.85 per share and with the same rights as the existing shares of the Company. After this capital increase, the capital of the Company amounted to \u20ac5,879,999,963.10, represented by 243,921,719 equal shares. There were no changes in the share capital during 2024.
Other reserves are part of the Reserves in the consolidated statement of financial position. These include the equity effect of the capital reorganization under common control in 2021 mainly due to the cancellation of the historical share capital and share premium, the initial recognition of written put options on non-controlling interests, transactions with treasury shares, and other adjustments to equity.
As of December 31, 2024, the Group has recognized within other reserves, the initial recognition of put options for a total amount of \u20ac86.0 million mainly related to the minority stakes in Ashapura (India) and Vogler Ingredients (Brazil). In 2023, other reserves included the initial recognition of put options for a total amount of \u20ac148.4 million.
In 2024, the Group purchased 130,000 treasury shares on Euronext Brussels for a total amount of \u20ac2.5\u00a0million to fund its long-term incentive plan (2023: 150,000 treasury shares for a total amount of \u20ac3.4 million).
Translation reserve is part of the Reserves in the consolidated statement of financial position.
Exchange differences arising on translation of the foreign controlled entities are recognized in other comprehensive income and accumulated in the translation reserve within equity.
The majority of the intangible assets on Azelis' statement of financial position relate to the EQT/PSP acquisition in November 2018. The respective amounts have been allocated to Azelis' three operating segments and, per IFRS, also on the basis of the underlying foreign currencies in Azelis' respective jurisdictions (of which a major part relates to Azelis' activities in the United States). Exchange differences arising on translation of the intangible assets are recognized in other comprehensive income and accumulated in the translation reserve within equity.
In 2024 the translation reserve has increased by \u20ac57.2 million (2023: decrease by \u20ac99.3 million), mainly originating from the translation to EUR of the financial positions of subsidiaries having their local currency in USD, TRL and COP.
Retained earnings includes the unappropriated result of previous years.
Reserves available for distribution is part of the Reserves in the consolidated statement of financial position.
In September 2021, and in connection with Azelis' IPO, the Group reduced its share capital by \u20ac400 million against reserves available for distribution, in order to create funds for distribution to the shareholders. No capital contributions were repaid to the shareholders in the context of this capital reduction.
At the Annual General Meeting of the Company held on June 13, 2024, the shareholders approved the payment of a total dividend amount of \u20ac53.3 million regarding the 2023 financial year, i.e. a gross dividend of (rounded) \u20ac0.22 per share outstanding at the moment of the dividend payout. The total amount of \u20ac53.3 million was paid to the shareholders in 2024.
On March 4, 2025, a dividend of \u20ac54.9 million, implying \u20ac0.23 dividend per share1, was proposed by the Board of Directors. The dividend will be paid out to the shareholders upon approval by the Shareholders' Meeting on May 8, 2025.
Non-controlling interests reflect the share of equity ownership in the Group's subsidiaries that is not owned by the Group, even though those subsidiaries are consolidated in the Group's consolidated financial statements. Ashapura Aromas (India), Vogler Ingredients (Brazil) and Azelis South Africa (South Africa) are the main contributors for the non-controlling interests. Refer also to note 26.4.
In 2024, the Group acquired the full non-controlling interests in Catalite (Thailand), MKVN Chemicals (Vietnam), Viet Chemicals Trading (Vietnam), Asia Primera Kimika (Philippines), Phil-Asiatic Supply & Services (Philippines) and part of the non-controlling interest in Vogler Ingredients (Brazil) by settling the related put option redemption liabilities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfShareCapitalReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5097-2": { "value": "Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of ordinary shares and share options are recognized in equity net of tax.
The share premium consists of additional paid-in capital exceeding the par value of outstanding shares.
Treasury share purchases are recognized as a deduction from equity (section other reserves). No gain or loss is recognized on the purchase, sale, issue or cancellation of treasury shares. Consideration paid or received is recognized directly in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForIssuedCapitalExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5098-1": { "value": "Treasury share purchases are recognized as a deduction from equity (section other reserves). No gain or loss is recognized on the purchase, sale, issue or cancellation of treasury shares. Consideration paid or received is recognized directly in equity.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForTreasurySharesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5099-1": { "value": "The Group operates several defined benefit pension plans.
The liability or asset recognized in the balance sheet of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period, less the fair value of plan assets. The defined benefit obligation is calculated annually by independent qualified actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows, using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in finance expense in the income statement. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the income statement as past service costs.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
The cost of all short-term employee benefits, such as salaries, holiday pay, bonuses, medical aid and other contributions, are recognized during the period in which the employee renders the related service. The Group recognizes those costs only when it has a present legal or constructive obligation to make such payment and a reliable estimate of the liability can be made.
The Group\u2019s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Other long-term employee benefits are calculated using the projected unit credit method. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.
The Group has performance share plans for key management, qualifying as equity-settled share-based payment plans. Equity-settled share-based payment transactions are transactions in which the entity receives goods or services in exchange for its own equity instruments (e.g. shares, options).
Goods or services received in equity-settled share-based payment transactions are measured at their fair value, unless they cannot be estimated reliably, in which case they are determined in accordance with the fair value of the equity instruments granted. The fair value is determined on the grant date, and the value incorporates market conditions using a Monte Carlo calculation. This value remains unchanged over the vesting period. Service conditions and non-market conditions do not affect the fair value of the instruments granted, but are taken into account by adjusting the number of equity instruments included in the measurement of the transaction, an estimate which is revised on each reporting date until the vesting period has lapsed. Azelis accounts for the equity-settled share-based payment transaction in the other reserves section of the equity, and its initial recognition and subsequent changes are accounted for in employee expenses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5099-2": { "value": "The Group operates several defined benefit pension plans.
The liability or asset recognized in the balance sheet of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period, less the fair value of plan assets. The defined benefit obligation is calculated annually by independent qualified actuaries using the projected unit credit method.
The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows, using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms approximating to the terms of the related obligation. The net interest cost is calculated by applying the discount rate to the net balance of the defined benefit obligation and the fair value of plan assets. This cost is included in finance expense in the income statement. Changes in the present value of the defined benefit obligation resulting from plan amendments or curtailments are recognized immediately in the income statement as past service costs.
Remeasurement gains and losses arising from experience adjustments and changes in actuarial assumptions are recognized in the period in which they occur, directly in other comprehensive income. They are included in retained earnings in the statement of changes in equity and in the balance sheet.
For defined contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The Group has no further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit expense when they are due.
The cost of all short-term employee benefits, such as salaries, holiday pay, bonuses, medical aid and other contributions, are recognized during the period in which the employee renders the related service. The Group recognizes those costs only when it has a present legal or constructive obligation to make such payment and a reliable estimate of the liability can be made.
The Group\u2019s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Other long-term employee benefits are calculated using the projected unit credit method. Any actuarial gains and losses are recognized in profit or loss in the period in which they arise.
The Group has performance share plans for key management, qualifying as equity-settled share-based payment plans. Equity-settled share-based payment transactions are transactions in which the entity receives goods or services in exchange for its own equity instruments (e.g. shares, options).
Goods or services received in equity-settled share-based payment transactions are measured at their fair value, unless they cannot be estimated reliably, in which case they are determined in accordance with the fair value of the equity instruments granted. The fair value is determined on the grant date, and the value incorporates market conditions using a Monte Carlo calculation. This value remains unchanged over the vesting period. Service conditions and non-market conditions do not affect the fair value of the instruments granted, but are taken into account by adjusting the number of equity instruments included in the measurement of the transaction, an estimate which is revised on each reporting date until the vesting period has lapsed. Azelis accounts for the equity-settled share-based payment transaction in the other reserves section of the equity, and its initial recognition and subsequent changes are accounted for in employee expenses.
A provision is recognized if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably, and it is probable that an outflow of economic benefits will be required to settle the obligation. 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 the risks specific to the liability. Unwinding of the discount of provisions is recorded as financial expenses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForProvisionsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5100-1": { "value": "The Group has performance share plans for key management, qualifying as equity-settled share-based payment plans. Equity-settled share-based payment transactions are transactions in which the entity receives goods or services in exchange for its own equity instruments (e.g. shares, options).
Goods or services received in equity-settled share-based payment transactions are measured at their fair value, unless they cannot be estimated reliably, in which case they are determined in accordance with the fair value of the equity instruments granted. The fair value is determined on the grant date, and the value incorporates market conditions using a Monte Carlo calculation. This value remains unchanged over the vesting period. Service conditions and non-market conditions do not affect the fair value of the instruments granted, but are taken into account by adjusting the number of equity instruments included in the measurement of the transaction, an estimate which is revised on each reporting date until the vesting period has lapsed. Azelis accounts for the equity-settled share-based payment transaction in the other reserves section of the equity, and its initial recognition and subsequent changes are accounted for in employee expenses.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForSharebasedPaymentTransactionsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5100-2": { "value": "The Group has performance share plans for key management, qualifying as equity-settled share-based payment plans. Equity-settled share-based payment transactions are transactions in which the entity receives goods or services in exchange for its own equity instruments (e.g. shares, options).
Goods or services received in equity-settled share-based payment transactions are measured at their fair value, unless they cannot be estimated reliably, in which case they are determined in accordance with the fair value of the equity instruments granted. The fair value is determined on the grant date, and the value incorporates market conditions using a Monte Carlo calculation. This value remains unchanged over the vesting period. Service conditions and non-market conditions do not affect the fair value of the instruments granted, but are taken into account by adjusting the number of equity instruments included in the measurement of the transaction, an estimate which is revised on each reporting date until the vesting period has lapsed. Azelis accounts for the equity-settled share-based payment transaction in the other reserves section of the equity, and its initial recognition and subsequent changes are accounted for in employee expenses.
The Group has long-term incentive plans (LTIPs) in place, granting share awards to certain directors, employees, and self-employed managers of the Group. The granting of share awards is subject to a three-year performance period (starting January 1) and takes into account the following metrics and weightings: 50% relative total shareholders' return (market condition), 35% Adjusted EBITA (non-market condition), and 15% carbon emissions reduction (non-market condition). The awards are subject to a vesting period of three years starting from the grant date and are dependent on the Remuneration and Nomination Committee determining whether performance targets have been met. Based on performance delivered, the number of performance shares awarded will be vested and become unconditionally owned by the participant.
The movement in number of performance shares outstanding and the related weighted average fair value per share are as follows:
| \u00a0 | 2024 | 2023 | ||
|---|---|---|---|---|
| (in number of shares and \u20ac) | Number of shares | Weighted average fair value | Number of shares | Weighted average fair value |
| Outstanding as of 1 January | 246,632 | 21.75 | 165,605 | 19.19 |
| Granted during the year | 228,770 | 16.91 | 172,817 | 24.07 |
| Forfeited during the year | - 29,977 | N/A | - 91,790 | N/A |
| Performance adjustment | - 202,315 | N/A | - | N/A |
| Outstanding as of 31 December | 243,110 | 22.71 | 246,632 | 21.75 |
The fair value of the performance shares was measured on the basis of Azelis' share price on the grant date and has been discounted with the sum of the expected dividend yield for the performance period. The expected dividend yield has been determined based on target pay-out ratio and consensus figures for net profit, divided by market capitalization. The market condition of total shareholders return was embedded in the fair value based on a Monte Carlo simulation incorporating a number of assumptions (volatility, expected dividend yield, and the correlation coefficients between the share price returns of the peer companies).
In 2024, above changes in outstanding performance shares resulted in an expense of \u20ac1.3 million (2023: \u20ac1.4 million), which is recognized in the consolidated income statement as part of employee benefits expenses.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSharebasedPaymentArrangementsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5102-1": { "value": "Revenue from product sales is recognized when the performance obligation is satisfied, i.e. when the customer obtains control over the promised goods. For the Group, control transfer is generally driven by the agreed upon incoterm. Revenue is measured at the fair value of the consideration received, net of returns, trade discounts and volume rebates. Revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur.
When the outcome of a commission transaction can be estimated reliably, revenue associated with the transaction is recognized by reference to the stage of completion of the transaction at the end of the reporting period. When the Group acts in the capacity of an agent rather than as a principal in a transaction, the revenue recognized is the net amount of commission made by the Group. The Group acts as an agent when it does not take title and is not exposed to risks of the goods, when the risks are borne by the supplier and when the selling prices are set by the suppliers.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForRecognitionOfRevenue", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5103-1": { "value": "Revenue from product sales is recognized when the performance obligation is satisfied, i.e. when the customer obtains control over the promised goods. For the Group, control transfer is generally driven by the agreed upon incoterm. Revenue is measured at the fair value of the consideration received, net of returns, trade discounts and volume rebates. Revenue is only recognized to the extent that it is highly probable that a significant reversal will not occur.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForDiscountsAndRebatesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5104-1": { "value": "When the outcome of a commission transaction can be estimated reliably, revenue associated with the transaction is recognized by reference to the stage of completion of the transaction at the end of the reporting period. When the Group acts in the capacity of an agent rather than as a principal in a transaction, the revenue recognized is the net amount of commission made by the Group. The Group acts as an agent when it does not take title and is not exposed to risks of the goods, when the risks are borne by the supplier and when the selling prices are set by the suppliers.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForFeeAndCommissionIncomeAndExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5105-1": { "value": "An operating segment is a component of the Group that engages in business activities from which it may earn revenues and incur expenses, including revenues and expenses that relate to transactions with any of the Group\u2019s other components. The segmentation used by the Group is based on geography, organization and management structure, and commercial interdependencies.
Segment results that are reported to the CEO include items directly attributable to a segment, as well as those that can be allocated on a reasonable basis. Unallocated items comprise mainly head office expenses and income tax assets and liabilities, and are presented in a separate reporting unit \u2018Group holding & other\u2019.
The reporting segments used are defined as follows:
EMEA: all operating companies in Europe, Middle East and Africa
Americas: all operating companies in the United States of America, Canada, Mexico and South America (mainly Colombia and Brazil)
Asia Pacific: all operating companies in Asia, South-East Asia and the Pacific region
Group holding & other: all non-operating companies, including the corporate service center and headquarters in Belgium
Government grants are recognized in profit or loss on a systematic basis over the periods in which the entity recognizes as expenses the related expenses for which the grants are intended to compensate. Government grants are not recognized until there is reasonable assurance that the Group will comply with the conditions attached to them and that the grants will be received.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForGovernmentGrants", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5107-1": { "value": "The consolidated statement of cash flows is prepared using the indirect method. Cash is defined as cash and cash equivalents, less bank overdrafts. Cash flows are presented separately in the statement of cash flows as cash flows from operating activities, investing activities and financing activities.
", "dimensions": { "concept": "ifrs-full:DescriptionOfAccountingPolicyForCashFlowsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5108-1": { "value": "A number of the Group\u2019s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
The fair value of property, plant and equipment recognized as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm\u2019s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
The fair value of trademarks and distribution rights acquired in business combinations are measured using the income approach (relief from royalty and multi-period excess earning method, respectively). The fair value of other intangible assets is mainly based on the cost approach.
The fair value of inventories is determined based on their estimated selling price in the ordinary course of business, less the estimated costs of completion and sale.
The fair value of financial assets at FVTPL and FVTOCI financial assets is determined by reference to their quoted bid price on the reporting date. If no market prices are available, the instruments are measured using the present value of the expected future cash flows, discounted at the market rate of interest on the measurement date.
The fair value of trade and other receivables is determined as the present value of future cash flows, discounted at the market rate of interest on the measurement date.
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract, using a risk-free interest rate increased by an appropriate additional spread related to the credit risk of the Group and the risk of the counterparty.
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at measurement date, including the Group\u2019s credit risk.
The fair value of contingent consideration qualifying as earnout, recognized in relation to business combinations, is calculated based on a forecast of the underlying performance measure (generally EBIT(D)A) and is discounted at the market rate of interest on the measurement date. The fair value of contingent consideration constituting a mere fixed deferred payment is determined as the present value of future cash flows and discounted at the market rate of interest on the measurement date.
The redemption value of put options on non-controlling interests, recognized in relation to business combinations, is calculated based on specific contractual specifications, consisting mostly of a combination of a multiple on a future performance measure and the balance of certain net working capital items upon exercise of the option.
Assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: valuation techniques for which all inputs which have a significant effect on the recorded fair value are observable for the asset or liability, either directly or indirectly
Level 3: valuation techniques for which all inputs which have a significant effect on the recorded fair value are not based on observable market data
A number of the Group\u2019s accounting policies and disclosures require the determination of fair value, for both financial and non-financial assets and liabilities. Fair values have been determined for measurement or disclosure purposes based on the following methods. When applicable, further information about the assumptions made in determining fair values is disclosed in the notes specific to that asset or liability.
The fair value of property, plant and equipment recognized as a result of a business combination is based on market values. The market value of property is the estimated amount for which a property could be exchanged on the date of valuation between a willing buyer and a willing seller in an arm\u2019s length transaction after proper marketing wherein the parties had each acted knowledgeably, prudently and without compulsion.
The fair value of trademarks and distribution rights acquired in business combinations are measured using the income approach (relief from royalty and multi-period excess earning method, respectively). The fair value of other intangible assets is mainly based on the cost approach.
The fair value of inventories is determined based on their estimated selling price in the ordinary course of business, less the estimated costs of completion and sale.
The fair value of financial assets at FVTPL and FVTOCI financial assets is determined by reference to their quoted bid price on the reporting date. If no market prices are available, the instruments are measured using the present value of the expected future cash flows, discounted at the market rate of interest on the measurement date.
The fair value of trade and other receivables is determined as the present value of future cash flows, discounted at the market rate of interest on the measurement date.
The fair value of forward exchange contracts is based on their listed market price, if available. If a listed market price is not available, then fair value is estimated by discounting the difference between the contractual forward price and the current forward price for the residual maturity of the contract, using a risk-free interest rate increased by an appropriate additional spread related to the credit risk of the Group and the risk of the counterparty.
Fair value is calculated based on the present value of future principal and interest cash flows, discounted at the market rate of interest at measurement date, including the Group\u2019s credit risk.
The fair value of contingent consideration qualifying as earnout, recognized in relation to business combinations, is calculated based on a forecast of the underlying performance measure (generally EBIT(D)A) and is discounted at the market rate of interest on the measurement date. The fair value of contingent consideration constituting a mere fixed deferred payment is determined as the present value of future cash flows and discounted at the market rate of interest on the measurement date.
The redemption value of put options on non-controlling interests, recognized in relation to business combinations, is calculated based on specific contractual specifications, consisting mostly of a combination of a multiple on a future performance measure and the balance of certain net working capital items upon exercise of the option.
Assets and liabilities for which fair value is measured or disclosed in the consolidated financial statements are categorized within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities
Level 2: valuation techniques for which all inputs which have a significant effect on the recorded fair value are observable for the asset or liability, either directly or indirectly
Level 3: valuation techniques for which all inputs which have a significant effect on the recorded fair value are not based on observable market data
On a selective basis, the Group has outstanding foreign exchange swap contracts to manage the exposure to foreign currency risk on outstanding foreign currency receivables/payables, as well as an interest rate cap relating to its variable rate interest risk.
To limit its interest rate risk exposure, the Group entered into interest rate cap agreements (interest rate cap) in May 2022, that will expire on March 31, 2025. The interest rate cap modifies the Company\u2019s exposure to interest rate risk by converting a portion of the Company\u2019s variable-rate debt to a fixed-rate basis, thereby reducing the impact of interest rate changes on interest expense. The Group recognizes fair value gains and losses within the financial result.
In connection with business combinations, the Group has outstanding liabilities for contingent consideration and for put options on non-controlling interests. The Group\u2019s financial instruments per category are shown below including the fair value and hierarchy information.
The interest rate cap qualifies for the level 2 category in the fair value hierarchy due to the fact that it is not traded in an active market and the fair value is\u00a0determined using valuation techniques (option pricing model) which maximize the use of observable market data. Since\u00a0all significant inputs required to fair-value the instrument are observable, the instrument is classified as level 2. All derivatives related to forward exchange contracts are classified as level 2. Contingent consideration qualifying as earnout and put options on non-controlling interests are classified as level 3. For the calculation basis of fair values, see also note 2.17.
The carrying amount of the other financial assets and liabilities approximates their fair value.
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 370 | 370 | \u00a0 | 370 | \u00a0 | 370 |
| Derivatives | 4 | - | \u00a0 | - | \u00a0 | 0 | \u00a0 | - |
| Other investments | 4 | 10 | 1,258 | 1,268 | \u00a0 | 1,268 | \u00a0 | 1,268 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 496,379 | 496,379 | \u00a0 | 496,379 | \u00a0 | 496,379 |
| Other receivables | 19 | 16,816 | 75,837 | 92,653 | \u00a0 | 92,653 | \u00a0 | 92,653 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 600 | \u00a0 | 600 | \u00a0 | 600 | \u00a0 | 600 |
| Cash and cash equivalents | 20 | \u00a0 | 303,945 | 303,945 | \u00a0 | 303,945 | \u00a0 | 303,945 |
| Total financial assets | \u00a0 | 17,426 | 877,793 | 895,219 | 0 | 895,219 | 0 | 895,219 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,748,391 | 1,748,391 | \u00a0 | 1,748,391 | \u00a0 | 1,748,391 |
| Other financial liabilities | \u00a0 | 26,707 | 6,459 | 33,166 | \u00a0 | 6,459 | 26,707 | 33,166 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 76,453 | 76,453 | \u00a0 | 76,453 | \u00a0 | 76,453 |
| Bank overdraft | 20 | \u00a0 | 19,146 | 19,146 | \u00a0 | 19,146 | \u00a0 | 19,146 |
| Trade payables | 24 | \u00a0 | 486,804 | 486,804 | \u00a0 | 486,804 | \u00a0 | 486,804 |
| Other current liabilities excl derivatives | 24 | 77,624 | 136,028 | 213,651 | \u00a0 | 136,028 | 77,624 | 213,651 |
| Derivatives | 24 | 112 | \u00a0 | 112 | \u00a0 | 112 | \u00a0 | 112 |
| Total financial liabilities | \u00a0 | 104,443 | 2,473,281 | 2,577,724 | 0 | 2,473,393 | 104,331 | 2,577,724 |
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 726 | 726 | \u00a0 | 726 | \u00a0 | 726 |
| Derivatives | 4 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 |
| Other investments | 4 | 0 | 1,178 | 1,178 | \u00a0 | 1,178 | \u00a0 | 1,178 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 444,863 | 444,863 | \u00a0 | 444,863 | \u00a0 | 444,863 |
| Other receivables | 19 | 11,591 | 65,442 | 77,033 | \u00a0 | 77,033 | \u00a0 | 77,033 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 57 | \u00a0 | 57 | \u00a0 | 57 | \u00a0 | 57 |
| Cash and cash equivalents | 20 | \u00a0 | 484,874 | 484,874 | \u00a0 | 484,874 | \u00a0 | 484,874 |
| Total financial assets | \u00a0 | 17,778 | 997,086 | 1,014,864 | 0 | 1,014,864 | 0 | 1,014,864 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,650,982 | 1,650,982 | \u00a0 | 1,650,982 | \u00a0 | 1,650,982 |
| Other financial liabilities | \u00a0 | 65,072 | 4,744 | 69,816 | \u00a0 | 4,744 | 65,072 | 69,816 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 106,831 | 106,831 | \u00a0 | 106,831 | \u00a0 | 106,831 |
| Bank overdraft | 20 | \u00a0 | 18,286 | 18,286 | \u00a0 | 18,286 | \u00a0 | 18,286 |
| Trade payables | 24 | \u00a0 | 434,085 | 434,085 | \u00a0 | 434,085 | \u00a0 | 434,085 |
| Other current liabilities excl derivatives | 24 | 133,969 | 227,495 | 361,464 | \u00a0 | 227,495 | 133,969 | 361,464 |
| Derivatives | 24 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 |
| Total financial liabilities | \u00a0 | 202,961 | 2,442,423 | 2,645,385 | 0 | 2,446,344 | 199,041 | 2,645,385 |
In the process of applying accounting policies and preparing the consolidated financial statements, the Group has made certain judgments (other than those involving estimates) that affect the reported amounts of assets and liabilities, income and expenses.
In addition, the Group is required to make certain estimates and assumptions that affect the measurement and presentation of reported figures. Estimates are based on past experience and on additional knowledge obtained on transactions to be reported, and are reviewed on an ongoing basis. Actual amounts may differ from these estimates. The most critical accounting judgments and estimates related to uncertainties with significant risk of causing material adjustment and applied in the consolidated financial statements are described below:
The Group has judged that the Azelis trademark has an indefinite useful life. As a consequence, the trademark is not amortized. On each reporting date, the Group reviews this judgment and assesses whether the circumstances continue to support the indefinite useful life. The trademark is part of the yearly impairment test. (See note 15).
In assessing the realization of deferred tax assets, management considers the extent to which it is probable that the deferred tax asset will be realized (note 14). The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profit during the periods in which those temporary differences and tax loss carry forwards are available. Management considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. (See note 14.2)
In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise an extension option. Extension options are only included in the lease term if the lease is reasonably certain to be extended. (See note 16.2)
Under supplier finance arrangements, trade payables are transferred by the Group to a financial institution who assumes its creditor obligations. Following this transfer, the Group will no longer be to offset any of the transferred payables against credit notes received from the supplier.
For the purpose of the consolidated statement of cash flows, management considers that the finance provider settles the invoices as a payment agent on behalf of the entity. The payments made by the finance provider are therefore presented as operating cash outflows and financing cash inflows in equal but opposite amounts at the point when the finance provider pays the supplier. When the Group subsequently pays the amount outstanding to the finance provider, this is presented as a financing cash outflow.
In a business combination, the acquired assets and liabilities are measured at fair value. The Group uses assumptions and non-observable information to prepare fair value of the assessed, where no observable information is available. The actual market performance can subsequently differ from the assumptions. The most important assumptions are disclosed in the note for business combinations. (See note 7).
The Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash-generating unit (CGU) is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period, incorporating estimates for sales growth and margin growth. Cash flows beyond the five-year period are extrapolated using the estimated growth rates. These growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates. (See note 15.2).
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purpose of impairment testing, goodwill is allocated to the following CGUs:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| EMEA | 843,470 | 782,687 |
| Americas | 1,295,037 | 1,251,715 |
| Asia Pacific | 398,337 | 374,849 |
| Total goodwill | 2,536,844 | 2,409,251 |
All goodwill acquired in the business combinations was allocated to a CGU at the end of the reporting period. Goodwill is allocated on a regional level as it is the Group's regions that are expected to benefit from the business combinations, and as goodwill is also monitored internally at regional level. The Group expects synergies to be realized in the region of acquisition.
Trademarks with a book value of \u20ac317.4 million (2023: \u20ac317.4 million) have an indefinite life. These do not generate cash inflows independently and qualify as corporate assets. As their carrying amount cannot be allocated to the CGUs on a reasonable and consistent basis, the corporate assets are allocated to the Group as a whole, and the impairment test is performed in two stages.
", "dimensions": { "concept": "ifrs-full:DisclosureOfAssetsAndLiabilitiesWithSignificantRiskOfMaterialAdjustmentExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "general-data-ifrs-full-explanationofassumptionaboutfuturewithsignificantriskofresultinginmaterialadjustments-i5112": { "value": "Significant estimates and judgmentsIn the process of applying accounting policies and preparing the consolidated financial statements, the Group has made certain judgments (other than those involving estimates) that affect the reported amounts of assets and liabilities, income and expenses.In addition, the Group is required to make certain estimates and assumptions that affect the measurement and presentation of reported figures. Estimates are based on past experience and on additional knowledge obtained on transactions to be reported, and are reviewed on an ongoing basis. Actual amounts may differ from these estimates. The most critical accounting judgments and estimates related to uncertainties with significant risk of causing material adjustment and applied in the consolidated financial statements are described below:Use of judgmentsIntangible assetsThe Group has judged that the Azelis trademark has an indefinite useful life. As a consequence, the trademark is not amortized. On each reporting date, the Group reviews this judgment and assesses whether the circumstances continue to support the indefinite useful life. The trademark is part of the yearly impairment test. (See note 15).In assessing the realization of deferred tax assets, management considers the extent to which it is probable that the deferred tax asset will be realized (note 14). The ultimate realization of deferred tax assets is dependent upon the generation of future taxable profit during the periods in which those temporary differences and tax loss carry forwards are available. Management considers the expected reversal of deferred tax liabilities and projected future taxable income in making this assessment. (See note 14.2)Use of estimatesBusiness combinationsIn a business combination, the acquired assets and liabilities are measured at fair value. The Group uses assumptions and non-observable information to prepare fair value of the assessed, where no observable information is available. The actual market performance can subsequently differ from the assumptions. The most important assumptions are disclosed in the note for business combinations. (See note 7).Goodwill & intangible assets - Impairment assessmentThe Group tests whether goodwill has suffered any impairment on an annual basis. The recoverable amount of a cash-generating unit (CGU) is determined based on value-in-use calculations which require the use of assumptions. The calculations use cash flow projections based on financial budgets approved by management covering a five-year period, incorporating estimates for sales growth and margin growth. Cash flows beyond the five-year period are extrapolated using the estimated growth rates. These growth rates are consistent with forecasts included in industry reports specific to the industry in which each CGU operates. (See note 15.2).Impairment testThe impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.", "dimensions": { "concept": "ifrs-full:ExplanationOfAssumptionAboutFutureWithSignificantRiskOfResultingInMaterialAdjustments", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5135-1": { "value": "Azelis is exposed to several financial and other risks, including:
Credit risks
Liquidity risks
Market risks
Operational risks
Azelis has a risk management framework in place to mitigate those risks. The Board of Directors oversees how management monitors compliance with the Group\u2019s risk management policies and procedures and reviews the adequacy of the risk management framework in relation to the risks faced by the Group.
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group\u2019s receivables from customers.
As of December 31, the main credit risk can be summarized as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade and other receivables | 589,031 | 521,896 |
| Cash and cash equivalents | 303,945 | 484,874 |
| Other financial assets | 1,992 | 7,809 |
| \u00a0 | 894,969 | 1,014,578 |
The Group applies the IFRS 9 simplified approach (refer to note 2.7.2).
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. The Group has no significant concentration of credit risk.
The Group has a credit policy under which each new customer is analyzed individually for creditworthiness before the Group\u2019s standard payment and delivery terms and conditions are offered. The Group\u2019s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer.
Customers that fail to meet the Group\u2019s benchmark creditworthiness may transact with the Group only on a prepayment basis. The Group\u2019s credit policy includes suspension of further deliveries if customers fail to pay their debts on time. Moreover, the Group engages in non-recourse factoring for the majority of its revenue in the EMEA region, which is used as an efficiency program in its credit collection processes. No other credit insurance programs are deemed to be necessary.
A significant portion of the Group\u2019s customers have been transacting with the Group companies for many years and losses have occurred infrequently. The Group does not require collateral in respect of trade and other receivables.
The Group establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets, adjusted for forward-looking information through an assessment of both the current and projected direction of economic conditions at the reporting date.
At year-end, the aging of the trade receivables after the deduction of the factoring received is constituted as follows:
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 384,209 | 73.0% | 1,256 | 0.3% |
| Between 0 and 2 months | 94,618 | 18.0% | 2,421 | 2.6% |
| Between 2 and 12 months | 35,411 | 6.7% | 14,221 | 40.2% |
| More than 12 months | 11,999 | 2.3% | 11,960 | 99.7% |
| \u00a0 | 526,237 | 100.0% | 29,858 | 5.7% |
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 340,390 | 71.8% | 2,483 | 0.7% |
| Between 0 and 2 months | 93,354 | 19.7% | 5,636 | 6.0% |
| Between 2 and 12 months | 31,000 | 6.5% | 12,068 | 38.9% |
| More than 12 months | 9,507 | 2.0% | 9,200 | 96.8% |
| \u00a0 | 474,250 | 100.0% | 29,387 | 6.2% |
The loss allowances for trade receivables on December 31 reconcile to the opening loss allowances as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Balance at 1 January | 29,387 | 38,912 |
| Business combination | 2,176 | 3,203 |
| Provisions made in the year | 11,912 | 5,168 |
| Decrease on impairment losses | -13,566 | -16,881 |
| Exchange rate differences | -51 | -1,015 |
| Balance at December 31 | 29,858 | 29,387 |
The Group\u2019s exposure to credit risk is insignificant as the Group deals with highly rated banks for its cash deposits.
The Group\u2019s policy is to provide financial guarantees only in favor of wholly owned subsidiaries. On the balance sheet date, no other material guarantees were outstanding.
Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group\u2019s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses.
The Group ensures that it has sufficient cash on hand and unused credit facilities to meet expected operational expenses for the respective planning horizon, including the servicing of financial obligations.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of any netting agreements at year-end:
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,661,091 | 2,039,722 | 130,843 | 1,908,879 | 0 |
| Lease obligation (IFRS16) | 163,753 | 216,759 | 36,056 | 88,091 | 92,612 |
| Derivatives | 112 | 112 | 112 | 0 | 0 |
| Trade and other payables | 733,622 | 739,437 | 702,269 | 37,169 | 0 |
| Bank Overdrafts | 19,146 | 19,146 | 19,146 | 0 | 0 |
| \u00a0 | 2,577,724 | 3,015,176 | 888,425 | 2,034,139 | 92,612 |
Loans and borrowings are primarily to be repaid in 2029 (December 31, 2023: in 2026).
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,631,194 | 1,942,106 | 176,219 | 1,749,928 | 15,959 |
| Lease obligation (IFRS16) | 126,619 | 141,658 | 28,213 | 79,863 | 33,582 |
| Derivatives | 3,921 | 3,921 | 3,921 | 0 | 0 |
| Trade and other payables | 865,365 | 872,078 | 797,363 | 74,715 | 0 |
| Bank overdrafts | 18,286 | 18,286 | 18,286 | 0 | 0 |
| \u00a0 | 2,645,385 | 2,978,048 | 1,024,002 | 1,904,506 | 49,541 |
Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group\u2019s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Group buys and sells derivatives in order to manage its market risks.
The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in various currencies. The main currencies are euros (\u20ac), pound sterling (GBP) and US dollars (USD).
At any point in time, the Group hedges a significant part of its foreign currency exposure in respect of sales and purchases orders via natural hedges within its operational portfolio. The Group uses mainly forward exchange contracts to hedge its remaining currency risk, all with a maturity of less than one year from the reporting date. When necessary, forward exchange contracts are rolled over at maturity. The Group has not applied hedge accounting.
Interest on borrowings is denominated in currencies that predominantly match the cash flows generated by the underlying operations of the Group, primarily euros (\u20ac), pound sterling (GBP) and US dollars (USD). This provides an economic hedge without derivatives being entered into and therefore the Group has not applied hedge accounting.
The Group\u2019s investments in foreign non-euro subsidiaries are considered to be long-term operations of the Group and are therefore not hedged. Currency translation differences on these long-term operations are reported in the translation reserve in equity.
The exposure to foreign currency risk in current assets and current liabilities is mainly related to balances denominated in USD and GBP, for which the notional amounts (stated in \u20ac) amount to:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| \u00a0 | USD | GBP | USD | GBP |
| Financial assets except for cash and cash equivalents | 210,778 | 3,086 | 158,478 | 3,240 |
| Cash and cash equivalents | 70,961 | 448 | 66,774 | 37,186 |
| Financial liabilities | -284,785 | -17,291 | -173,622 | -151,927 |
| Gross balance sheet exposure | -3,045 | -13,757 | 51,630 | -111,501 |
A 10% strengthening of the euro against the USD and GBP at year-end would have increased (decreased) equity and the income statement by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| \u00a0 | Profit or loss | Equity | Profit or loss | Equity |
| USD | 277 | 277 | -4,694 | -4,694 |
| GBP | 1,251 | 1,251 | 10,136 | 10,136 |
A 10% weakening of the euro against the USD and GBP at year-end would have had the equal but opposite effect in euros to the amounts shown above, on the basis that all other variables remain constant.
The Group adopts a policy of carefully managing its interest rate risk. On a regular basis, the Board of Directors assesses the Group's interest rates versus external benchmarks, ensuring that management will affect financial transactions resulting in fixed borrowing interest rates in case limits are exceeded. As of the reporting date, the external bank borrowings are on a floating interest rate basis.
The Group\u2019s main interest rate risk arises from a long-term borrowing with variable rate (EURIBOR), which exposes the Group to cash flow interest rate risk. The cash flow risk is mitigated through the usage of an interest rate cap.\u00a0
On the reporting date, the interest rate profile of the Group\u2019s interest-bearing financial instruments expressed in their carrying amounts was:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Fixed rate instruments | \u00a0 | \u00a0 |
| Financial liabilities | -1,005,746 | -407,478 |
| \u00a0 | -1,005,746 | -407,478 |
| Variable rate instruments | \u00a0 | \u00a0 |
| Financial assets | 303,945 | 484,874 |
| Financial liabilities | -838,244 | -1,368,621 |
| \u00a0 | -534,299 | -883,747 |
An increase (decrease) of 100 basis points in interest rates on the reporting date would have decreased (increased) equity and the income statement (not considering income tax impact) by the annual amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates and the potential mitigating effect of the interest rate cap, remain constant.
| (in thousands of \u20ac) | Profit or loss - 2024 | Equity - 2024 | ||
|---|---|---|---|---|
| \u00a0 | 100 bp | 100 bp | 100 bp | 100 bp |
| \u00a0 | Increase | Decrease | Increase | Decrease |
| Variable rate instruments | -8,382 | 8,382 | -8,382 | 8,382 |
| Cash flow sensitivity (net) | -8,382 | 8,382 | -8,382 | 8,382 |
| (in thousands of \u20ac) | Profit or loss - 2023 | Equity - 2023 | ||
|---|---|---|---|---|
| \u00a0 | 100 bp | 100 bp | 100 bp | 100 bp |
| \u00a0 | Increase | Decrease | Increase | Decrease |
| Variable rate instruments | -13,686 | 13,686 | -13,686 | 13,686 |
| Cash flow sensitivity (net) | -13,686 | 13,686 | -13,686 | 13,686 |
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the Group's processes, personnel, technology, and infrastructure, and from external factors other than credit, market, and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behavior. Operational risks arise from all of the Group's operations. The Group's objective is to manage operational risks so as to balance the avoidance of financial losses and damage to the Group's reputation with overall cost effectiveness and to avoid control procedures that restrict initiative and creativity.
On a selective basis, the Group has outstanding foreign exchange swap contracts to manage the exposure to foreign currency risk on outstanding foreign currency receivables/payables, as well as an interest rate cap relating to its variable rate interest risk.
To limit its interest rate risk exposure, the Group entered into interest rate cap agreements (interest rate cap) in May 2022, that will expire on March 31, 2025. The interest rate cap modifies the Company\u2019s exposure to interest rate risk by converting a portion of the Company\u2019s variable-rate debt to a fixed-rate basis, thereby reducing the impact of interest rate changes on interest expense. The Group recognizes fair value gains and losses within the financial result.
In connection with business combinations, the Group has outstanding liabilities for contingent consideration and for put options on non-controlling interests. The Group\u2019s financial instruments per category are shown below including the fair value and hierarchy information.
The interest rate cap qualifies for the level 2 category in the fair value hierarchy due to the fact that it is not traded in an active market and the fair value is\u00a0determined using valuation techniques (option pricing model) which maximize the use of observable market data. Since\u00a0all significant inputs required to fair-value the instrument are observable, the instrument is classified as level 2. All derivatives related to forward exchange contracts are classified as level 2. Contingent consideration qualifying as earnout and put options on non-controlling interests are classified as level 3. For the calculation basis of fair values, see also note 2.17.
The carrying amount of the other financial assets and liabilities approximates their fair value.
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 370 | 370 | \u00a0 | 370 | \u00a0 | 370 |
| Derivatives | 4 | - | \u00a0 | - | \u00a0 | 0 | \u00a0 | - |
| Other investments | 4 | 10 | 1,258 | 1,268 | \u00a0 | 1,268 | \u00a0 | 1,268 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 496,379 | 496,379 | \u00a0 | 496,379 | \u00a0 | 496,379 |
| Other receivables | 19 | 16,816 | 75,837 | 92,653 | \u00a0 | 92,653 | \u00a0 | 92,653 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 600 | \u00a0 | 600 | \u00a0 | 600 | \u00a0 | 600 |
| Cash and cash equivalents | 20 | \u00a0 | 303,945 | 303,945 | \u00a0 | 303,945 | \u00a0 | 303,945 |
| Total financial assets | \u00a0 | 17,426 | 877,793 | 895,219 | 0 | 895,219 | 0 | 895,219 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,748,391 | 1,748,391 | \u00a0 | 1,748,391 | \u00a0 | 1,748,391 |
| Other financial liabilities | \u00a0 | 26,707 | 6,459 | 33,166 | \u00a0 | 6,459 | 26,707 | 33,166 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 76,453 | 76,453 | \u00a0 | 76,453 | \u00a0 | 76,453 |
| Bank overdraft | 20 | \u00a0 | 19,146 | 19,146 | \u00a0 | 19,146 | \u00a0 | 19,146 |
| Trade payables | 24 | \u00a0 | 486,804 | 486,804 | \u00a0 | 486,804 | \u00a0 | 486,804 |
| Other current liabilities excl derivatives | 24 | 77,624 | 136,028 | 213,651 | \u00a0 | 136,028 | 77,624 | 213,651 |
| Derivatives | 24 | 112 | \u00a0 | 112 | \u00a0 | 112 | \u00a0 | 112 |
| Total financial liabilities | \u00a0 | 104,443 | 2,473,281 | 2,577,724 | 0 | 2,473,393 | 104,331 | 2,577,724 |
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 726 | 726 | \u00a0 | 726 | \u00a0 | 726 |
| Derivatives | 4 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 |
| Other investments | 4 | 0 | 1,178 | 1,178 | \u00a0 | 1,178 | \u00a0 | 1,178 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 444,863 | 444,863 | \u00a0 | 444,863 | \u00a0 | 444,863 |
| Other receivables | 19 | 11,591 | 65,442 | 77,033 | \u00a0 | 77,033 | \u00a0 | 77,033 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 57 | \u00a0 | 57 | \u00a0 | 57 | \u00a0 | 57 |
| Cash and cash equivalents | 20 | \u00a0 | 484,874 | 484,874 | \u00a0 | 484,874 | \u00a0 | 484,874 |
| Total financial assets | \u00a0 | 17,778 | 997,086 | 1,014,864 | 0 | 1,014,864 | 0 | 1,014,864 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,650,982 | 1,650,982 | \u00a0 | 1,650,982 | \u00a0 | 1,650,982 |
| Other financial liabilities | \u00a0 | 65,072 | 4,744 | 69,816 | \u00a0 | 4,744 | 65,072 | 69,816 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 106,831 | 106,831 | \u00a0 | 106,831 | \u00a0 | 106,831 |
| Bank overdraft | 20 | \u00a0 | 18,286 | 18,286 | \u00a0 | 18,286 | \u00a0 | 18,286 |
| Trade payables | 24 | \u00a0 | 434,085 | 434,085 | \u00a0 | 434,085 | \u00a0 | 434,085 |
| Other current liabilities excl derivatives | 24 | 133,969 | 227,495 | 361,464 | \u00a0 | 227,495 | 133,969 | 361,464 |
| Derivatives | 24 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 |
| Total financial liabilities | \u00a0 | 202,961 | 2,442,423 | 2,645,385 | 0 | 2,446,344 | 199,041 | 2,645,385 |
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group\u2019s receivables from customers.
As of December 31, the main credit risk can be summarized as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade and other receivables | 589,031 | 521,896 |
| Cash and cash equivalents | 303,945 | 484,874 |
| Other financial assets | 1,992 | 7,809 |
| \u00a0 | 894,969 | 1,014,578 |
The Group applies the IFRS 9 simplified approach (refer to note 2.7.2).
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. The Group has no significant concentration of credit risk.
The Group has a credit policy under which each new customer is analyzed individually for creditworthiness before the Group\u2019s standard payment and delivery terms and conditions are offered. The Group\u2019s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer.
Customers that fail to meet the Group\u2019s benchmark creditworthiness may transact with the Group only on a prepayment basis. The Group\u2019s credit policy includes suspension of further deliveries if customers fail to pay their debts on time. Moreover, the Group engages in non-recourse factoring for the majority of its revenue in the EMEA region, which is used as an efficiency program in its credit collection processes. No other credit insurance programs are deemed to be necessary.
A significant portion of the Group\u2019s customers have been transacting with the Group companies for many years and losses have occurred infrequently. The Group does not require collateral in respect of trade and other receivables.
The Group establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets, adjusted for forward-looking information through an assessment of both the current and projected direction of economic conditions at the reporting date.
At year-end, the aging of the trade receivables after the deduction of the factoring received is constituted as follows:
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 384,209 | 73.0% | 1,256 | 0.3% |
| Between 0 and 2 months | 94,618 | 18.0% | 2,421 | 2.6% |
| Between 2 and 12 months | 35,411 | 6.7% | 14,221 | 40.2% |
| More than 12 months | 11,999 | 2.3% | 11,960 | 99.7% |
| \u00a0 | 526,237 | 100.0% | 29,858 | 5.7% |
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 340,390 | 71.8% | 2,483 | 0.7% |
| Between 0 and 2 months | 93,354 | 19.7% | 5,636 | 6.0% |
| Between 2 and 12 months | 31,000 | 6.5% | 12,068 | 38.9% |
| More than 12 months | 9,507 | 2.0% | 9,200 | 96.8% |
| \u00a0 | 474,250 | 100.0% | 29,387 | 6.2% |
The loss allowances for trade receivables on December 31 reconcile to the opening loss allowances as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Balance at 1 January | 29,387 | 38,912 |
| Business combination | 2,176 | 3,203 |
| Provisions made in the year | 11,912 | 5,168 |
| Decrease on impairment losses | -13,566 | -16,881 |
| Exchange rate differences | -51 | -1,015 |
| Balance at December 31 | 29,858 | 29,387 |
The Group\u2019s exposure to credit risk is insignificant as the Group deals with highly rated banks for its cash deposits.
The Group\u2019s policy is to provide financial guarantees only in favor of wholly owned subsidiaries. On the balance sheet date, no other material guarantees were outstanding.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCreditRiskExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5161-1": { "value": "The Group applies the IFRS 9 simplified approach (refer to note 2.7.2).
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. The Group has no significant concentration of credit risk.
The Group has a credit policy under which each new customer is analyzed individually for creditworthiness before the Group\u2019s standard payment and delivery terms and conditions are offered. The Group\u2019s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer.
Customers that fail to meet the Group\u2019s benchmark creditworthiness may transact with the Group only on a prepayment basis. The Group\u2019s credit policy includes suspension of further deliveries if customers fail to pay their debts on time. Moreover, the Group engages in non-recourse factoring for the majority of its revenue in the EMEA region, which is used as an efficiency program in its credit collection processes. No other credit insurance programs are deemed to be necessary.
A significant portion of the Group\u2019s customers have been transacting with the Group companies for many years and losses have occurred infrequently. The Group does not require collateral in respect of trade and other receivables.
The Group establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets, adjusted for forward-looking information through an assessment of both the current and projected direction of economic conditions at the reporting date.
At year-end, the aging of the trade receivables after the deduction of the factoring received is constituted as follows:
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 384,209 | 73.0% | 1,256 | 0.3% |
| Between 0 and 2 months | 94,618 | 18.0% | 2,421 | 2.6% |
| Between 2 and 12 months | 35,411 | 6.7% | 14,221 | 40.2% |
| More than 12 months | 11,999 | 2.3% | 11,960 | 99.7% |
| \u00a0 | 526,237 | 100.0% | 29,858 | 5.7% |
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 340,390 | 71.8% | 2,483 | 0.7% |
| Between 0 and 2 months | 93,354 | 19.7% | 5,636 | 6.0% |
| Between 2 and 12 months | 31,000 | 6.5% | 12,068 | 38.9% |
| More than 12 months | 9,507 | 2.0% | 9,200 | 96.8% |
| \u00a0 | 474,250 | 100.0% | 29,387 | 6.2% |
The loss allowances for trade receivables on December 31 reconcile to the opening loss allowances as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Balance at 1 January | 29,387 | 38,912 |
| Business combination | 2,176 | 3,203 |
| Provisions made in the year | 11,912 | 5,168 |
| Decrease on impairment losses | -13,566 | -16,881 |
| Exchange rate differences | -51 | -1,015 |
| Balance at December 31 | 29,858 | 29,387 |
The Group applies the IFRS 9 simplified approach (refer to note 2.7.2).
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. The Group has no significant concentration of credit risk.
The Group has a credit policy under which each new customer is analyzed individually for creditworthiness before the Group\u2019s standard payment and delivery terms and conditions are offered. The Group\u2019s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer.
Customers that fail to meet the Group\u2019s benchmark creditworthiness may transact with the Group only on a prepayment basis. The Group\u2019s credit policy includes suspension of further deliveries if customers fail to pay their debts on time. Moreover, the Group engages in non-recourse factoring for the majority of its revenue in the EMEA region, which is used as an efficiency program in its credit collection processes. No other credit insurance programs are deemed to be necessary.
A significant portion of the Group\u2019s customers have been transacting with the Group companies for many years and losses have occurred infrequently. The Group does not require collateral in respect of trade and other receivables.
The Group establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets, adjusted for forward-looking information through an assessment of both the current and projected direction of economic conditions at the reporting date.
At year-end, the aging of the trade receivables after the deduction of the factoring received is constituted as follows:
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 384,209 | 73.0% | 1,256 | 0.3% |
| Between 0 and 2 months | 94,618 | 18.0% | 2,421 | 2.6% |
| Between 2 and 12 months | 35,411 | 6.7% | 14,221 | 40.2% |
| More than 12 months | 11,999 | 2.3% | 11,960 | 99.7% |
| \u00a0 | 526,237 | 100.0% | 29,858 | 5.7% |
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 340,390 | 71.8% | 2,483 | 0.7% |
| Between 0 and 2 months | 93,354 | 19.7% | 5,636 | 6.0% |
| Between 2 and 12 months | 31,000 | 6.5% | 12,068 | 38.9% |
| More than 12 months | 9,507 | 2.0% | 9,200 | 96.8% |
| \u00a0 | 474,250 | 100.0% | 29,387 | 6.2% |
The loss allowances for trade receivables on December 31 reconcile to the opening loss allowances as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Balance at 1 January | 29,387 | 38,912 |
| Business combination | 2,176 | 3,203 |
| Provisions made in the year | 11,912 | 5,168 |
| Decrease on impairment losses | -13,566 | -16,881 |
| Exchange rate differences | -51 | -1,015 |
| Balance at December 31 | 29,858 | 29,387 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade receivables | 496,379 | 444,863 |
| Other receivables | 92,653 | 77,033 |
| \u00a0 | 589,031 | 521,896 |
See note 4.1.1 for aging and allowance of these receivables. Other receivables relate mainly to prepayments.
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherReceivablesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5161-3": { "value": "The Group applies the IFRS 9 simplified approach (refer to note 2.7.2).
The Group's exposure to credit risk is influenced mainly by the individual characteristics of each customer. The demographics of the Group\u2019s customer base, including the default risk of the industry and country in which customers operate, have less of an influence on credit risk. The Group has no significant concentration of credit risk.
The Group has a credit policy under which each new customer is analyzed individually for creditworthiness before the Group\u2019s standard payment and delivery terms and conditions are offered. The Group\u2019s review includes external ratings, when available, and in some cases bank references. Purchase limits are established for each customer.
Customers that fail to meet the Group\u2019s benchmark creditworthiness may transact with the Group only on a prepayment basis. The Group\u2019s credit policy includes suspension of further deliveries if customers fail to pay their debts on time. Moreover, the Group engages in non-recourse factoring for the majority of its revenue in the EMEA region, which is used as an efficiency program in its credit collection processes. No other credit insurance programs are deemed to be necessary.
A significant portion of the Group\u2019s customers have been transacting with the Group companies for many years and losses have occurred infrequently. The Group does not require collateral in respect of trade and other receivables.
The Group establishes an allowance for impairment that represents its estimate of expected losses in respect of trade receivables. The main components of this allowance are a specific loss component that relates to individually significant exposures and a collective loss component established for groups of similar assets in respect of losses that have been incurred but not yet identified. The collective loss allowance is determined based on historical data of payment statistics for similar financial assets, adjusted for forward-looking information through an assessment of both the current and projected direction of economic conditions at the reporting date.
At year-end, the aging of the trade receivables after the deduction of the factoring received is constituted as follows:
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 384,209 | 73.0% | 1,256 | 0.3% |
| Between 0 and 2 months | 94,618 | 18.0% | 2,421 | 2.6% |
| Between 2 and 12 months | 35,411 | 6.7% | 14,221 | 40.2% |
| More than 12 months | 11,999 | 2.3% | 11,960 | 99.7% |
| \u00a0 | 526,237 | 100.0% | 29,858 | 5.7% |
| (in thousands of \u20ac) | Gross | % of total | Impairment | % Impaired |
|---|---|---|---|---|
| Not due | 340,390 | 71.8% | 2,483 | 0.7% |
| Between 0 and 2 months | 93,354 | 19.7% | 5,636 | 6.0% |
| Between 2 and 12 months | 31,000 | 6.5% | 12,068 | 38.9% |
| More than 12 months | 9,507 | 2.0% | 9,200 | 96.8% |
| \u00a0 | 474,250 | 100.0% | 29,387 | 6.2% |
The loss allowances for trade receivables on December 31 reconcile to the opening loss allowances as follows:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Balance at 1 January | 29,387 | 38,912 |
| Business combination | 2,176 | 3,203 |
| Provisions made in the year | 11,912 | 5,168 |
| Decrease on impairment losses | -13,566 | -16,881 |
| Exchange rate differences | -51 | -1,015 |
| Balance at December 31 | 29,858 | 29,387 |
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purpose of impairment testing, goodwill is allocated to the following CGUs:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| EMEA | 843,470 | 782,687 |
| Americas | 1,295,037 | 1,251,715 |
| Asia Pacific | 398,337 | 374,849 |
| Total goodwill | 2,536,844 | 2,409,251 |
All goodwill acquired in the business combinations was allocated to a CGU at the end of the reporting period. Goodwill is allocated on a regional level as it is the Group's regions that are expected to benefit from the business combinations, and as goodwill is also monitored internally at regional level. The Group expects synergies to be realized in the region of acquisition.
Trademarks with a book value of \u20ac317.4 million (2023: \u20ac317.4 million) have an indefinite life. These do not generate cash inflows independently and qualify as corporate assets. As their carrying amount cannot be allocated to the CGUs on a reasonable and consistent basis, the corporate assets are allocated to the Group as a whole, and the impairment test is performed in two stages.
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
| (in thousands of \u20ac) | Land and buildings | Plant and equipment | Other | Total |
|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 32,491 | 15,193 | 30,403 | 78,086 |
| Accumulated depreciation and impairment | -4,144 | -4,877 | -11,182 | -20,203 |
| \u00a0 | 28,347 | 10,316 | 19,221 | 57,884 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 840 | 3,398 | 11,909 | 16,148 |
| Additions | 431 | 1,605 | 6,463 | 8,499 |
| Depreciation | -1,143 | -2,278 | -5,345 | -8,765 |
| Reversal of impairment | 3,311 | - | - | 3,311 |
| Disposals | -2,136 | -353 | 82 | -2,407 |
| Reclassifications | 47 | 65 | -223 | -111 |
| Hyperinflation | - | 2 | 129 | 131 |
| Translation differences | -752 | -9 | -351 | -1,112 |
| Changes in the Period | 598 | 2,430 | 12,664 | 15,693 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 30,921 | 19,901 | 48,412 | 99,234 |
| Accumulated depreciation and impairment | -1,976 | -7,154 | -16,526 | -25,657 |
| \u00a0 | 28,945 | 12,747 | 31,886 | 73,577 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 353 | 265 | 239 | 857 |
| Additions | 90 | 1,198 | 7,833 | 9,121 |
| Depreciation | -1,189 | -2,347 | -5,827 | -9,363 |
| Impairment | -284 | - | -30 | -314 |
| Disposals | -3,850 | -684 | -612 | -5,147 |
| Reclassifications | 27 | 1 | -889 | -861 |
| Hyperinflation | - | 9 | 36 | 46 |
| Translation differences | -265 | 56 | -1,644 | -1,853 |
| Changes in the Period | -5,118 | -1,502 | -894 | -7,514 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 27,276 | 20,746 | 53,375 | 101,397 |
| Accumulated depreciation and impairment | -3,449 | -9,501 | -22,383 | -35,334 |
| \u00a0 | 23,827 | 11,245 | 30,992 | 66,063 |
The category 'Other' mainly relates to leasehold improvements, comprising also an insignificant amount of assets under construction.
On December 31, 2024, the Group had not pledged any land and buildings, or plant and equipment as security for the bank loans (2023: zero). Other restrictions are mainly related to leasehold improvements and leased machinery.
The right of use assets mainly relates to rental agreements for offices, warehouses, and cars.
| (in thousands of \u20ac) | Land and buildings | Other | Total |
|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 130,385 | 27,642 | 158,027 |
| Accumulated depreciation and impairment | -42,829 | -18,215 | -61,045 |
| \u00a0 | 87,555 | 9,426 | 96,982 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 16,174 | 1,796 | 17,971 |
| Additions | 19,432 | 9,776 | 29,209 |
| Depreciation | -19,357 | -5,950 | -25,307 |
| Disposals | -1,309 | -98 | -1,407 |
| Remeasurements | 6,212 | 1,273 | 7,485 |
| Hyperinflation | 3,566 | -188 | 3,378 |
| Translation differences | -4,775 | -487 | -5,262 |
| Changes in the Period | 19,945 | 6,122 | 26,066 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 169,686 | 39,714 | 209,399 |
| Accumulated depreciation and impairment | -62,186 | -24,166 | -86,352 |
| \u00a0 | 107,500 | 15,548 | 123,048 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 817 | 164 | 981 |
| Additions | 56,851 | 10,543 | 67,394 |
| Depreciation | -24,958 | -7,134 | -32,092 |
| Remeasurements | 8,743 | 417 | 9,159 |
| Hyperinflation | 3,011 | 257 | 3,268 |
| Translation differences | -621 | -93 | -714 |
| Changes in the Period | 34,799 | 3,699 | 38,498 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 229,443 | 50,547 | 279,990 |
| Accumulated depreciation and impairment | -87,144 | -31,300 | -118,444 |
| \u00a0 | 142,299 | 19,247 | 161,546 |
Remeasurements mainly relate to the prolongation of the lease period of existing contracts.
The Group has lease contracts that have not yet commenced as of December 31, 2024 with future lease payments of around \u20ac4.4 million (2023: \u20ac82.2 million).
Usage of inventories is recorded under 'Costs for goods and consumables' in the consolidated income statement. In 2024, write-downs of inventory of \u20ac15.6 million (2023: \u20ac10.3 million) are included under 'Costs for goods and consumables'.
", "dimensions": { "concept": "ifrs-full:DisclosureOfImpairmentOfAssetsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5278-1": { "value": "Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. The Group\u2019s approach to managing liquidity is to ensure that it will have sufficient liquidity to meet its liabilities when due, under both normal and stressed conditions, without incurring unacceptable losses.
The Group ensures that it has sufficient cash on hand and unused credit facilities to meet expected operational expenses for the respective planning horizon, including the servicing of financial obligations.
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of any netting agreements at year-end:
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,661,091 | 2,039,722 | 130,843 | 1,908,879 | 0 |
| Lease obligation (IFRS16) | 163,753 | 216,759 | 36,056 | 88,091 | 92,612 |
| Derivatives | 112 | 112 | 112 | 0 | 0 |
| Trade and other payables | 733,622 | 739,437 | 702,269 | 37,169 | 0 |
| Bank Overdrafts | 19,146 | 19,146 | 19,146 | 0 | 0 |
| \u00a0 | 2,577,724 | 3,015,176 | 888,425 | 2,034,139 | 92,612 |
Loans and borrowings are primarily to be repaid in 2029 (December 31, 2023: in 2026).
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,631,194 | 1,942,106 | 176,219 | 1,749,928 | 15,959 |
| Lease obligation (IFRS16) | 126,619 | 141,658 | 28,213 | 79,863 | 33,582 |
| Derivatives | 3,921 | 3,921 | 3,921 | 0 | 0 |
| Trade and other payables | 865,365 | 872,078 | 797,363 | 74,715 | 0 |
| Bank overdrafts | 18,286 | 18,286 | 18,286 | 0 | 0 |
| \u00a0 | 2,645,385 | 2,978,048 | 1,024,002 | 1,904,506 | 49,541 |
The following are the contractual maturities of financial liabilities, including estimated interest payments and excluding the impact of any netting agreements at year-end:
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,661,091 | 2,039,722 | 130,843 | 1,908,879 | 0 |
| Lease obligation (IFRS16) | 163,753 | 216,759 | 36,056 | 88,091 | 92,612 |
| Derivatives | 112 | 112 | 112 | 0 | 0 |
| Trade and other payables | 733,622 | 739,437 | 702,269 | 37,169 | 0 |
| Bank Overdrafts | 19,146 | 19,146 | 19,146 | 0 | 0 |
| \u00a0 | 2,577,724 | 3,015,176 | 888,425 | 2,034,139 | 92,612 |
| (in thousands of \u20ac) | Carrying amount | Undiscounted contractual Cash flows | Less than 1 Year | 1 to 5 Years | More than 5 Years |
|---|---|---|---|---|---|
| Loans and borrowings | 1,631,194 | 1,942,106 | 176,219 | 1,749,928 | 15,959 |
| Lease obligation (IFRS16) | 126,619 | 141,658 | 28,213 | 79,863 | 33,582 |
| Derivatives | 3,921 | 3,921 | 3,921 | 0 | 0 |
| Trade and other payables | 865,365 | 872,078 | 797,363 | 74,715 | 0 |
| Bank overdrafts | 18,286 | 18,286 | 18,286 | 0 | 0 |
| \u00a0 | 2,645,385 | 2,978,048 | 1,024,002 | 1,904,506 | 49,541 |
The right of use assets mainly relates to rental agreements for offices, warehouses, and cars.
| (in thousands of \u20ac) | Land and buildings | Other | Total |
|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 130,385 | 27,642 | 158,027 |
| Accumulated depreciation and impairment | -42,829 | -18,215 | -61,045 |
| \u00a0 | 87,555 | 9,426 | 96,982 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 16,174 | 1,796 | 17,971 |
| Additions | 19,432 | 9,776 | 29,209 |
| Depreciation | -19,357 | -5,950 | -25,307 |
| Disposals | -1,309 | -98 | -1,407 |
| Remeasurements | 6,212 | 1,273 | 7,485 |
| Hyperinflation | 3,566 | -188 | 3,378 |
| Translation differences | -4,775 | -487 | -5,262 |
| Changes in the Period | 19,945 | 6,122 | 26,066 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 169,686 | 39,714 | 209,399 |
| Accumulated depreciation and impairment | -62,186 | -24,166 | -86,352 |
| \u00a0 | 107,500 | 15,548 | 123,048 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 817 | 164 | 981 |
| Additions | 56,851 | 10,543 | 67,394 |
| Depreciation | -24,958 | -7,134 | -32,092 |
| Remeasurements | 8,743 | 417 | 9,159 |
| Hyperinflation | 3,011 | 257 | 3,268 |
| Translation differences | -621 | -93 | -714 |
| Changes in the Period | 34,799 | 3,699 | 38,498 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 229,443 | 50,547 | 279,990 |
| Accumulated depreciation and impairment | -87,144 | -31,300 | -118,444 |
| \u00a0 | 142,299 | 19,247 | 161,546 |
Remeasurements mainly relate to the prolongation of the lease period of existing contracts.
The Group has lease contracts that have not yet commenced as of December 31, 2024 with future lease payments of around \u20ac4.4 million (2023: \u20ac82.2 million).
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| As of January 1 | 126,619 | 101,558 |
| Business combination | 981 | 17,907 |
| New contracts | 67,114 | 29,863 |
| Remeasurements | 6,836 | 6,096 |
| Cash out | -38,073 | -28,704 |
| Currency translation differences | 277 | -101 |
| As of the end of the period | 163,753 | 126,619 |
For disclosure on the Group's right-of-use assets, refer to note 16.2.
", "dimensions": { "concept": "ifrs-full:DisclosureOfLeasesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5392-1": { "value": "Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates, and equity prices, will affect the Group\u2019s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimizing the return. The Group buys and sells derivatives in order to manage its market risks.
The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in various currencies. The main currencies are euros (\u20ac), pound sterling (GBP) and US dollars (USD).
At any point in time, the Group hedges a significant part of its foreign currency exposure in respect of sales and purchases orders via natural hedges within its operational portfolio. The Group uses mainly forward exchange contracts to hedge its remaining currency risk, all with a maturity of less than one year from the reporting date. When necessary, forward exchange contracts are rolled over at maturity. The Group has not applied hedge accounting.
Interest on borrowings is denominated in currencies that predominantly match the cash flows generated by the underlying operations of the Group, primarily euros (\u20ac), pound sterling (GBP) and US dollars (USD). This provides an economic hedge without derivatives being entered into and therefore the Group has not applied hedge accounting.
The Group\u2019s investments in foreign non-euro subsidiaries are considered to be long-term operations of the Group and are therefore not hedged. Currency translation differences on these long-term operations are reported in the translation reserve in equity.
The exposure to foreign currency risk in current assets and current liabilities is mainly related to balances denominated in USD and GBP, for which the notional amounts (stated in \u20ac) amount to:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| \u00a0 | USD | GBP | USD | GBP |
| Financial assets except for cash and cash equivalents | 210,778 | 3,086 | 158,478 | 3,240 |
| Cash and cash equivalents | 70,961 | 448 | 66,774 | 37,186 |
| Financial liabilities | -284,785 | -17,291 | -173,622 | -151,927 |
| Gross balance sheet exposure | -3,045 | -13,757 | 51,630 | -111,501 |
A 10% strengthening of the euro against the USD and GBP at year-end would have increased (decreased) equity and the income statement by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant.
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| \u00a0 | Profit or loss | Equity | Profit or loss | Equity |
| USD | 277 | 277 | -4,694 | -4,694 |
| GBP | 1,251 | 1,251 | 10,136 | 10,136 |
A 10% weakening of the euro against the USD and GBP at year-end would have had the equal but opposite effect in euros to the amounts shown above, on the basis that all other variables remain constant.
The Group adopts a policy of carefully managing its interest rate risk. On a regular basis, the Board of Directors assesses the Group's interest rates versus external benchmarks, ensuring that management will affect financial transactions resulting in fixed borrowing interest rates in case limits are exceeded. As of the reporting date, the external bank borrowings are on a floating interest rate basis.
The Group\u2019s main interest rate risk arises from a long-term borrowing with variable rate (EURIBOR), which exposes the Group to cash flow interest rate risk. The cash flow risk is mitigated through the usage of an interest rate cap.\u00a0
On the reporting date, the interest rate profile of the Group\u2019s interest-bearing financial instruments expressed in their carrying amounts was:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Fixed rate instruments | \u00a0 | \u00a0 |
| Financial liabilities | -1,005,746 | -407,478 |
| \u00a0 | -1,005,746 | -407,478 |
| Variable rate instruments | \u00a0 | \u00a0 |
| Financial assets | 303,945 | 484,874 |
| Financial liabilities | -838,244 | -1,368,621 |
| \u00a0 | -534,299 | -883,747 |
An increase (decrease) of 100 basis points in interest rates on the reporting date would have decreased (increased) equity and the income statement (not considering income tax impact) by the annual amounts shown below. This analysis assumes that all other variables, in particular foreign currency rates and the potential mitigating effect of the interest rate cap, remain constant.
| (in thousands of \u20ac) | Profit or loss - 2024 | Equity - 2024 | ||
|---|---|---|---|---|
| \u00a0 | 100 bp | 100 bp | 100 bp | 100 bp |
| \u00a0 | Increase | Decrease | Increase | Decrease |
| Variable rate instruments | -8,382 | 8,382 | -8,382 | 8,382 |
| Cash flow sensitivity (net) | -8,382 | 8,382 | -8,382 | 8,382 |
| (in thousands of \u20ac) | Profit or loss - 2023 | Equity - 2023 | ||
|---|---|---|---|---|
| \u00a0 | 100 bp | 100 bp | 100 bp | 100 bp |
| \u00a0 | Increase | Decrease | Increase | Decrease |
| Variable rate instruments | -13,686 | 13,686 | -13,686 | 13,686 |
| Cash flow sensitivity (net) | -13,686 | 13,686 | -13,686 | 13,686 |
The Group\u2019s main interest rate risk arises from a long-term borrowing with variable rate (EURIBOR), which exposes the Group to cash flow interest rate risk. The cash flow risk is mitigated through the usage of an interest rate cap.\u00a0
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsDesignatedAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i5461-2": { "value": "The Group\u2019s main interest rate risk arises from a long-term borrowing with variable rate (EURIBOR), which exposes the Group to cash flow interest rate risk. The cash flow risk is mitigated through the usage of an interest rate cap.\u00a0
On a selective basis, the Group has outstanding foreign exchange swap contracts to manage the exposure to foreign currency risk on outstanding foreign currency receivables/payables, as well as an interest rate cap relating to its variable rate interest risk.
To limit its interest rate risk exposure, the Group entered into interest rate cap agreements (interest rate cap) in May 2022, that will expire on March 31, 2025. The interest rate cap modifies the Company\u2019s exposure to interest rate risk by converting a portion of the Company\u2019s variable-rate debt to a fixed-rate basis, thereby reducing the impact of interest rate changes on interest expense. The Group recognizes fair value gains and losses within the financial result.
In connection with business combinations, the Group has outstanding liabilities for contingent consideration and for put options on non-controlling interests. The Group\u2019s financial instruments per category are shown below including the fair value and hierarchy information.
The interest rate cap qualifies for the level 2 category in the fair value hierarchy due to the fact that it is not traded in an active market and the fair value is\u00a0determined using valuation techniques (option pricing model) which maximize the use of observable market data. Since\u00a0all significant inputs required to fair-value the instrument are observable, the instrument is classified as level 2. All derivatives related to forward exchange contracts are classified as level 2. Contingent consideration qualifying as earnout and put options on non-controlling interests are classified as level 3. For the calculation basis of fair values, see also note 2.17.
The carrying amount of the other financial assets and liabilities approximates their fair value.
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 370 | 370 | \u00a0 | 370 | \u00a0 | 370 |
| Derivatives | 4 | - | \u00a0 | - | \u00a0 | 0 | \u00a0 | - |
| Other investments | 4 | 10 | 1,258 | 1,268 | \u00a0 | 1,268 | \u00a0 | 1,268 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 496,379 | 496,379 | \u00a0 | 496,379 | \u00a0 | 496,379 |
| Other receivables | 19 | 16,816 | 75,837 | 92,653 | \u00a0 | 92,653 | \u00a0 | 92,653 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 600 | \u00a0 | 600 | \u00a0 | 600 | \u00a0 | 600 |
| Cash and cash equivalents | 20 | \u00a0 | 303,945 | 303,945 | \u00a0 | 303,945 | \u00a0 | 303,945 |
| Total financial assets | \u00a0 | 17,426 | 877,793 | 895,219 | 0 | 895,219 | 0 | 895,219 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,748,391 | 1,748,391 | \u00a0 | 1,748,391 | \u00a0 | 1,748,391 |
| Other financial liabilities | \u00a0 | 26,707 | 6,459 | 33,166 | \u00a0 | 6,459 | 26,707 | 33,166 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 76,453 | 76,453 | \u00a0 | 76,453 | \u00a0 | 76,453 |
| Bank overdraft | 20 | \u00a0 | 19,146 | 19,146 | \u00a0 | 19,146 | \u00a0 | 19,146 |
| Trade payables | 24 | \u00a0 | 486,804 | 486,804 | \u00a0 | 486,804 | \u00a0 | 486,804 |
| Other current liabilities excl derivatives | 24 | 77,624 | 136,028 | 213,651 | \u00a0 | 136,028 | 77,624 | 213,651 |
| Derivatives | 24 | 112 | \u00a0 | 112 | \u00a0 | 112 | \u00a0 | 112 |
| Total financial liabilities | \u00a0 | 104,443 | 2,473,281 | 2,577,724 | 0 | 2,473,393 | 104,331 | 2,577,724 |
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 726 | 726 | \u00a0 | 726 | \u00a0 | 726 |
| Derivatives | 4 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 |
| Other investments | 4 | 0 | 1,178 | 1,178 | \u00a0 | 1,178 | \u00a0 | 1,178 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 444,863 | 444,863 | \u00a0 | 444,863 | \u00a0 | 444,863 |
| Other receivables | 19 | 11,591 | 65,442 | 77,033 | \u00a0 | 77,033 | \u00a0 | 77,033 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 57 | \u00a0 | 57 | \u00a0 | 57 | \u00a0 | 57 |
| Cash and cash equivalents | 20 | \u00a0 | 484,874 | 484,874 | \u00a0 | 484,874 | \u00a0 | 484,874 |
| Total financial assets | \u00a0 | 17,778 | 997,086 | 1,014,864 | 0 | 1,014,864 | 0 | 1,014,864 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,650,982 | 1,650,982 | \u00a0 | 1,650,982 | \u00a0 | 1,650,982 |
| Other financial liabilities | \u00a0 | 65,072 | 4,744 | 69,816 | \u00a0 | 4,744 | 65,072 | 69,816 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 106,831 | 106,831 | \u00a0 | 106,831 | \u00a0 | 106,831 |
| Bank overdraft | 20 | \u00a0 | 18,286 | 18,286 | \u00a0 | 18,286 | \u00a0 | 18,286 |
| Trade payables | 24 | \u00a0 | 434,085 | 434,085 | \u00a0 | 434,085 | \u00a0 | 434,085 |
| Other current liabilities excl derivatives | 24 | 133,969 | 227,495 | 361,464 | \u00a0 | 227,495 | 133,969 | 361,464 |
| Derivatives | 24 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 |
| Total financial liabilities | \u00a0 | 202,961 | 2,442,423 | 2,645,385 | 0 | 2,446,344 | 199,041 | 2,645,385 |
In accordance with its policy on managing the risk related to interest rates (refer to the Risk Management section), Azelis has interest rate cap agreements for a total loan amount of \u20ac700 million, expiring March 31, 2025, providing the Group with an interest rate cap of 3% on EURIBOR until that date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDerivativeFinancialInstrumentsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i5566-3": { "value": "On a selective basis, the Group has outstanding foreign exchange swap contracts to manage the exposure to foreign currency risk on outstanding foreign currency receivables/payables, as well as an interest rate cap relating to its variable rate interest risk.
To limit its interest rate risk exposure, the Group entered into interest rate cap agreements (interest rate cap) in May 2022, that will expire on March 31, 2025. The interest rate cap modifies the Company\u2019s exposure to interest rate risk by converting a portion of the Company\u2019s variable-rate debt to a fixed-rate basis, thereby reducing the impact of interest rate changes on interest expense. The Group recognizes fair value gains and losses within the financial result.
In connection with business combinations, the Group has outstanding liabilities for contingent consideration and for put options on non-controlling interests. The Group\u2019s financial instruments per category are shown below including the fair value and hierarchy information.
The interest rate cap qualifies for the level 2 category in the fair value hierarchy due to the fact that it is not traded in an active market and the fair value is\u00a0determined using valuation techniques (option pricing model) which maximize the use of observable market data. Since\u00a0all significant inputs required to fair-value the instrument are observable, the instrument is classified as level 2. All derivatives related to forward exchange contracts are classified as level 2. Contingent consideration qualifying as earnout and put options on non-controlling interests are classified as level 3. For the calculation basis of fair values, see also note 2.17.
The carrying amount of the other financial assets and liabilities approximates their fair value.
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 370 | 370 | \u00a0 | 370 | \u00a0 | 370 |
| Derivatives | 4 | - | \u00a0 | - | \u00a0 | 0 | \u00a0 | - |
| Other investments | 4 | 10 | 1,258 | 1,268 | \u00a0 | 1,268 | \u00a0 | 1,268 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 496,379 | 496,379 | \u00a0 | 496,379 | \u00a0 | 496,379 |
| Other receivables | 19 | 16,816 | 75,837 | 92,653 | \u00a0 | 92,653 | \u00a0 | 92,653 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 600 | \u00a0 | 600 | \u00a0 | 600 | \u00a0 | 600 |
| Cash and cash equivalents | 20 | \u00a0 | 303,945 | 303,945 | \u00a0 | 303,945 | \u00a0 | 303,945 |
| Total financial assets | \u00a0 | 17,426 | 877,793 | 895,219 | 0 | 895,219 | 0 | 895,219 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,748,391 | 1,748,391 | \u00a0 | 1,748,391 | \u00a0 | 1,748,391 |
| Other financial liabilities | \u00a0 | 26,707 | 6,459 | 33,166 | \u00a0 | 6,459 | 26,707 | 33,166 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 76,453 | 76,453 | \u00a0 | 76,453 | \u00a0 | 76,453 |
| Bank overdraft | 20 | \u00a0 | 19,146 | 19,146 | \u00a0 | 19,146 | \u00a0 | 19,146 |
| Trade payables | 24 | \u00a0 | 486,804 | 486,804 | \u00a0 | 486,804 | \u00a0 | 486,804 |
| Other current liabilities excl derivatives | 24 | 77,624 | 136,028 | 213,651 | \u00a0 | 136,028 | 77,624 | 213,651 |
| Derivatives | 24 | 112 | \u00a0 | 112 | \u00a0 | 112 | \u00a0 | 112 |
| Total financial liabilities | \u00a0 | 104,443 | 2,473,281 | 2,577,724 | 0 | 2,473,393 | 104,331 | 2,577,724 |
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 726 | 726 | \u00a0 | 726 | \u00a0 | 726 |
| Derivatives | 4 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 |
| Other investments | 4 | 0 | 1,178 | 1,178 | \u00a0 | 1,178 | \u00a0 | 1,178 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 444,863 | 444,863 | \u00a0 | 444,863 | \u00a0 | 444,863 |
| Other receivables | 19 | 11,591 | 65,442 | 77,033 | \u00a0 | 77,033 | \u00a0 | 77,033 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 57 | \u00a0 | 57 | \u00a0 | 57 | \u00a0 | 57 |
| Cash and cash equivalents | 20 | \u00a0 | 484,874 | 484,874 | \u00a0 | 484,874 | \u00a0 | 484,874 |
| Total financial assets | \u00a0 | 17,778 | 997,086 | 1,014,864 | 0 | 1,014,864 | 0 | 1,014,864 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,650,982 | 1,650,982 | \u00a0 | 1,650,982 | \u00a0 | 1,650,982 |
| Other financial liabilities | \u00a0 | 65,072 | 4,744 | 69,816 | \u00a0 | 4,744 | 65,072 | 69,816 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 106,831 | 106,831 | \u00a0 | 106,831 | \u00a0 | 106,831 |
| Bank overdraft | 20 | \u00a0 | 18,286 | 18,286 | \u00a0 | 18,286 | \u00a0 | 18,286 |
| Trade payables | 24 | \u00a0 | 434,085 | 434,085 | \u00a0 | 434,085 | \u00a0 | 434,085 |
| Other current liabilities excl derivatives | 24 | 133,969 | 227,495 | 361,464 | \u00a0 | 227,495 | 133,969 | 361,464 |
| Derivatives | 24 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 |
| Total financial liabilities | \u00a0 | 202,961 | 2,442,423 | 2,645,385 | 0 | 2,446,344 | 199,041 | 2,645,385 |
On a selective basis, the Group has outstanding foreign exchange swap contracts to manage the exposure to foreign currency risk on outstanding foreign currency receivables/payables, as well as an interest rate cap relating to its variable rate interest risk.
To limit its interest rate risk exposure, the Group entered into interest rate cap agreements (interest rate cap) in May 2022, that will expire on March 31, 2025. The interest rate cap modifies the Company\u2019s exposure to interest rate risk by converting a portion of the Company\u2019s variable-rate debt to a fixed-rate basis, thereby reducing the impact of interest rate changes on interest expense. The Group recognizes fair value gains and losses within the financial result.
In connection with business combinations, the Group has outstanding liabilities for contingent consideration and for put options on non-controlling interests. The Group\u2019s financial instruments per category are shown below including the fair value and hierarchy information.
The interest rate cap qualifies for the level 2 category in the fair value hierarchy due to the fact that it is not traded in an active market and the fair value is\u00a0determined using valuation techniques (option pricing model) which maximize the use of observable market data. Since\u00a0all significant inputs required to fair-value the instrument are observable, the instrument is classified as level 2. All derivatives related to forward exchange contracts are classified as level 2. Contingent consideration qualifying as earnout and put options on non-controlling interests are classified as level 3. For the calculation basis of fair values, see also note 2.17.
The carrying amount of the other financial assets and liabilities approximates their fair value.
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 370 | 370 | \u00a0 | 370 | \u00a0 | 370 |
| Derivatives | 4 | - | \u00a0 | - | \u00a0 | 0 | \u00a0 | - |
| Other investments | 4 | 10 | 1,258 | 1,268 | \u00a0 | 1,268 | \u00a0 | 1,268 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 496,379 | 496,379 | \u00a0 | 496,379 | \u00a0 | 496,379 |
| Other receivables | 19 | 16,816 | 75,837 | 92,653 | \u00a0 | 92,653 | \u00a0 | 92,653 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 600 | \u00a0 | 600 | \u00a0 | 600 | \u00a0 | 600 |
| Cash and cash equivalents | 20 | \u00a0 | 303,945 | 303,945 | \u00a0 | 303,945 | \u00a0 | 303,945 |
| Total financial assets | \u00a0 | 17,426 | 877,793 | 895,219 | 0 | 895,219 | 0 | 895,219 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,748,391 | 1,748,391 | \u00a0 | 1,748,391 | \u00a0 | 1,748,391 |
| Other financial liabilities | \u00a0 | 26,707 | 6,459 | 33,166 | \u00a0 | 6,459 | 26,707 | 33,166 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 76,453 | 76,453 | \u00a0 | 76,453 | \u00a0 | 76,453 |
| Bank overdraft | 20 | \u00a0 | 19,146 | 19,146 | \u00a0 | 19,146 | \u00a0 | 19,146 |
| Trade payables | 24 | \u00a0 | 486,804 | 486,804 | \u00a0 | 486,804 | \u00a0 | 486,804 |
| Other current liabilities excl derivatives | 24 | 77,624 | 136,028 | 213,651 | \u00a0 | 136,028 | 77,624 | 213,651 |
| Derivatives | 24 | 112 | \u00a0 | 112 | \u00a0 | 112 | \u00a0 | 112 |
| Total financial liabilities | \u00a0 | 104,443 | 2,473,281 | 2,577,724 | 0 | 2,473,393 | 104,331 | 2,577,724 |
| (in thousands of \u20ac) | Note | Fair value through P&L | Amortized cost | Total book value | Level 1 | Level 2 | Level 3 | Total |
|---|---|---|---|---|---|---|---|---|
| Assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Other financial receivables | 4 | \u00a0 | 726 | 726 | \u00a0 | 726 | \u00a0 | 726 |
| Derivatives | 4 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 | \u00a0 | 6,131 |
| Other investments | 4 | 0 | 1,178 | 1,178 | \u00a0 | 1,178 | \u00a0 | 1,178 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Current assets | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Trade receivables | 19 | \u00a0 | 444,863 | 444,863 | \u00a0 | 444,863 | \u00a0 | 444,863 |
| Other receivables | 19 | 11,591 | 65,442 | 77,033 | \u00a0 | 77,033 | \u00a0 | 77,033 |
| Other financial receivables | \u00a0 | \u00a0 | 4 | 4 | \u00a0 | 4 | \u00a0 | 4 |
| Derivatives | 4 | 57 | \u00a0 | 57 | \u00a0 | 57 | \u00a0 | 57 |
| Cash and cash equivalents | 20 | \u00a0 | 484,874 | 484,874 | \u00a0 | 484,874 | \u00a0 | 484,874 |
| Total financial assets | \u00a0 | 17,778 | 997,086 | 1,014,864 | 0 | 1,014,864 | 0 | 1,014,864 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 1,650,982 | 1,650,982 | \u00a0 | 1,650,982 | \u00a0 | 1,650,982 |
| Other financial liabilities | \u00a0 | 65,072 | 4,744 | 69,816 | \u00a0 | 4,744 | 65,072 | 69,816 |
| Current liabilities | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Interest bearing | 22 | \u00a0 | 106,831 | 106,831 | \u00a0 | 106,831 | \u00a0 | 106,831 |
| Bank overdraft | 20 | \u00a0 | 18,286 | 18,286 | \u00a0 | 18,286 | \u00a0 | 18,286 |
| Trade payables | 24 | \u00a0 | 434,085 | 434,085 | \u00a0 | 434,085 | \u00a0 | 434,085 |
| Other current liabilities excl derivatives | 24 | 133,969 | 227,495 | 361,464 | \u00a0 | 227,495 | 133,969 | 361,464 |
| Derivatives | 24 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 | \u00a0 | 3,921 |
| Total financial liabilities | \u00a0 | 202,961 | 2,442,423 | 2,645,385 | 0 | 2,446,344 | 199,041 | 2,645,385 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade payables | 486,804 | 434,085 |
| Other taxes | 12,199 | 13,032 |
| Employee and social security payables | 69,191 | 71,409 |
| Derivatives | 112 | 3,921 |
| Other payables | 132,261 | 277,023 |
| Total current payables | 700,567 | 799,470 |
| \u00a0 | \u00a0 | \u00a0 |
| Other payables | 33,166 | 69,816 |
| Other non-current liabilities | 33,166 | 69,816 |
The other current and non-current payables mainly consist of put options over non-controlling interests totaling \u20ac81.6 million (2023: \u20ac171.1 million), and earnouts and deferred payments in connection with acquisitions. The decrease in 2024 is mainly attributable to settlement of put option liabilities (Note 21.7).
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinancialInstrumentsAtFairValueThroughProfitOrLossExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6109-1": { "value": "The Board of Directors\u2019 policy is to maintain a good capital base so as to maintain investor, creditor, and market confidence and to sustain future profitable development of the business. The Board monitors the return on capital and seeks to maintain a balance between the returns on equity versus the levels of borrowings, as well as the advantages and security afforded by a sound capital position.
The Group defines its capital as its equity and its net interest borrowing loans:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Equity | 2,920,146 | 2,676,578 |
| Other interest-bearing loans | 1,843,990 | 1,776,099 |
| Less: Cash and cash equivalents | -303,945 | -484,874 |
| Total capital | 4,460,191 | 3,967,803 |
The Group is not exposed to significant external capital requirements other than covenant requirements from the Term Loans (refer to note 22).
", "dimensions": { "concept": "ifrs-full:DisclosureOfObjectivesPoliciesAndProcessesForManagingCapitalExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6134-1": { "value": "The Group\u2019s reportable segments are based on the regions in which it operates: EMEA, Americas, and Asia Pacific. This reflects how the Group is structured, providing its specialty chemicals distribution services in all these regions.
Operating expenses of non-operating companies are reported in the Group Holding segment. Adjusted EBITA of Group Holding represents\u00a0costs related to corporate activities and central support services, mainly at the Group\u2019s service center and headquarters in Belgium.
Transactions between companies within an operating segment have been eliminated. Revenue therefore represents external sales. Transactions between operating segments are based on arm\u2019s length principle.
The performance of the operating segments is assessed based on a measure of Adjusted EBITA. The Group currently uses Adjusted EBITA in its business operations to develop budgets, measure its performance against those budgets, and evaluate the performance of its operations, among other things.
Gross profit is defined as income less cost of goods and consumables (as disclosed in note 10), before outbound distribution cost.
Total assets and liabilities per segment are not being measured and/or reported to the key decision makers on a regular basis, whereas Net Working Capital is used as a major performance indicator of the operating segments1.
Results of the operating segments are reflected in the below table:
| (in thousands of \u20ac) | EMEA | Americas | Asia Pacific | Group holding & other | Total |
|---|---|---|---|---|---|
| Revenue | 1,792,716 | 1,536,223 | 885,076 | - | 4,214,015 |
| Gross profit | 462,825 | 383,233 | 184,988 | - | 1,031,046 |
| Adjusted EBITA | 228,232 | 189,478 | 88,054 | -35,081 | 470,684 |
| Operating profit | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 385,926 |
| Net Working Capital | 196,248 | 280,783 | 217,906 | -7,416 | 687,521 |
| (in thousands of \u20ac) | EMEA | Americas | Asia Pacific | Group holding & other | Total |
|---|---|---|---|---|---|
| Revenue | 1,793,858 | 1,454,320 | 904,047 | - | 4,152,225 |
| Gross profit | 468,092 | 344,281 | 171,747 | - | 984,120 |
| Adjusted EBITA | 237,623 | 184,577 | 78,407 | -34,347 | 466,260 |
| Operating profit | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 386,903 |
| Net Working Capital | 160,780 | 227,056 | 192,712 | -6,990 | 573,558 |
'Group holding & other' mainly includes the operating expenses for the Group holding activities and limited gross profit that remain unallocated to EMEA, Americas, or Asia Pacific.
The Group does not have material intercompany revenue across its segments. The Group has a diverse customer base in all of its reportable segments and has no individual material customers. The Group's non-financial non-current assets are broken down over its country of domicile and regions as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Belgium | 926,256 | 22.3% | 53,954 | 1.4% |
| Rest of EMEA | 747,945 | 18.0% | 1,528,151 | 38.6% |
| EMEA | 1,674,201 | 40.3% | 1,582,105 | 40.0% |
| Americas | 1,853,980 | 44.6% | 1,787,248 | 45.2% |
| Asia Pacific | 628,307 | 15.1% | 585,942 | 14.8% |
| \u00a0 | 4,156,488 | 100.0% | 3,955,295 | 100.0% |
The Group\u2019s reportable segments are based on the regions in which it operates: EMEA, Americas, and Asia Pacific. This reflects how the Group is structured, providing its specialty chemicals distribution services in all these regions.
Operating expenses of non-operating companies are reported in the Group Holding segment. Adjusted EBITA of Group Holding represents\u00a0costs related to corporate activities and central support services, mainly at the Group\u2019s service center and headquarters in Belgium.
Transactions between companies within an operating segment have been eliminated. Revenue therefore represents external sales. Transactions between operating segments are based on arm\u2019s length principle.
The performance of the operating segments is assessed based on a measure of Adjusted EBITA. The Group currently uses Adjusted EBITA in its business operations to develop budgets, measure its performance against those budgets, and evaluate the performance of its operations, among other things.
Gross profit is defined as income less cost of goods and consumables (as disclosed in note 10), before outbound distribution cost.
Total assets and liabilities per segment are not being measured and/or reported to the key decision makers on a regular basis, whereas Net Working Capital is used as a major performance indicator of the operating segments1.
Results of the operating segments are reflected in the below table:
| (in thousands of \u20ac) | EMEA | Americas | Asia Pacific | Group holding & other | Total |
|---|---|---|---|---|---|
| Revenue | 1,792,716 | 1,536,223 | 885,076 | - | 4,214,015 |
| Gross profit | 462,825 | 383,233 | 184,988 | - | 1,031,046 |
| Adjusted EBITA | 228,232 | 189,478 | 88,054 | -35,081 | 470,684 |
| Operating profit | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 385,926 |
| Net Working Capital | 196,248 | 280,783 | 217,906 | -7,416 | 687,521 |
| (in thousands of \u20ac) | EMEA | Americas | Asia Pacific | Group holding & other | Total |
|---|---|---|---|---|---|
| Revenue | 1,793,858 | 1,454,320 | 904,047 | - | 4,152,225 |
| Gross profit | 468,092 | 344,281 | 171,747 | - | 984,120 |
| Adjusted EBITA | 237,623 | 184,577 | 78,407 | -34,347 | 466,260 |
| Operating profit | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 386,903 |
| Net Working Capital | 160,780 | 227,056 | 192,712 | -6,990 | 573,558 |
'Group holding & other' mainly includes the operating expenses for the Group holding activities and limited gross profit that remain unallocated to EMEA, Americas, or Asia Pacific.
The Group does not have material intercompany revenue across its segments. The Group has a diverse customer base in all of its reportable segments and has no individual material customers. The Group's non-financial non-current assets are broken down over its country of domicile and regions as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Belgium | 926,256 | 22.3% | 53,954 | 1.4% |
| Rest of EMEA | 747,945 | 18.0% | 1,528,151 | 38.6% |
| EMEA | 1,674,201 | 40.3% | 1,582,105 | 40.0% |
| Americas | 1,853,980 | 44.6% | 1,787,248 | 45.2% |
| Asia Pacific | 628,307 | 15.1% | 585,942 | 14.8% |
| \u00a0 | 4,156,488 | 100.0% | 3,955,295 | 100.0% |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Revenue from sales, net of discounts | 4,197,242 | 4,133,899 |
| Revenue from commercial services | 1,970 | 2,270 |
| \u00a0 | 4,199,212 | 4,136,169 |
| Commissions received | 14,802 | 16,056 |
| \u00a0 | 4,214,014 | 4,152,225 |
The Group's revenues are broken down over product group as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Life Sciences | 2,653,493 | 63.0% | 2,565,485 | 61.8% |
| Industrial Chemicals | 1,560,521 | 37.0% | 1,586,740 | 38.2% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
The Group's revenues are broken down over its country of domicile and regions as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Belgium | 99,509 | 2.4% | 120,729 | 2.9% |
| Rest of EMEA | 1,693,207 | 40.2% | 1,673,128 | 40.3% |
| EMEA | 1,792,716 | 42.5% | 1,793,857 | 43.2% |
| Americas | 1,536,223 | 36.5% | 1,454,320 | 35.0% |
| Asia Pacific | 885,076 | 21.0% | 904,047 | 21.8% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Recharge of expenses to customers | 15,637 | 8,689 |
| Other income | 8,319 | 14,759 |
| \u00a0 | 23,956 | 23,448 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Purchase of goods including change in inventory | 3,128,291 | 3,122,521 |
| Freight and additional charges on purchases | 78,633 | 69,032 |
| \u00a0 | 3,206,924 | 3,191,553 |
Wages and salaries include managers\u2019 fees and current service costs from employee benefits.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Wages and salaries and other personnel related expenses | 275,263 | 269,003 |
| Social charges | 39,289 | 34,790 |
| \u00a0 | 314,552 | 303,793 |
The number of employees (FTE, including contingent workers) located in the regions is set out below:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| EMEA | 1,978 | 1,884 |
| Americas | 1,153 | 1,111 |
| Asia Pacific | 1,013 | 1,031 |
| Holdings | 177 | 180 |
| \u00a0 | 4,321 | 4,206 |
In 2024, the workforce has increased by 160 employees due to acquisitions completed during the year.
The Group is subject to the following defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| German companies | 606 | 640 |
| Belgian companies | 5,376 | 4,849 |
| French companies | 1,971 | 1,945 |
| Italian companies | 1,875 | 1,950 |
| UK companies | 4,850 | 5,653 |
| Other companies | 1,917 | 1,460 |
| Total present value of obligations | 16,594 | 16,497 |
| Fair value of plan assets | -10,727 | -12,795 |
| Amounts not recognized as asset due to asset ceiling | 410 | 2,345 |
| Recognized liability for defined benefit obligations | 6,277 | 6,047 |
| Liability for long-service leave and other employees' benefits | 7,605 | 7,590 |
| Total employee benefits recognized in the balance sheet | 13,882 | 13,637 |
The Group has defined benefit plans in place in Belgium (partly funded), France (unfunded), Italy (unfunded), United Kingdom (wholly funded), Germany (partly funded), Thailand (unfunded), Indonesia (unfunded), and the Philippines (unfunded).
The Group's net defined benefit obligation is based on the difference between the present values of the defined benefit obligations and the plan assets.
Both defined benefit plans and defined contribution plans are in place. Charges for defined contribution schemes amount to \u20ac3.8 million (2023: \u20ac4.2 million). Expenses for all plans are included in 'Wages, salaries and other personnel related expenses'.
The pension plans in place in Belgium are all legally structured as defined contribution plans but qualify as defined benefit plans due to their guaranteed minimum return, which exposes the employer to a financial risk; there is a legal obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
In the United Kingdom, the defined benefit pension plan is financed through the accumulation of plan assets held separately from those of the Group in an independently administered fund.
The actuarial calculations of the present value of defined benefit obligations were based on the following main assumptions:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| Discount rate | 2.84% - 7.1% | 3.2% - 6.3% |
| Inflation | 3.2% - 10.1% | 2.5% - 4.47% |
| Future pension increases | 0% - 6% | 0% - 6% |
| Future salary increases | 0% - 10% | 0% - 6% |
In the event that the discount rate would increase or decrease by 0.5%, the defined benefit obligation would decrease by \u20ac0.6 million or increase by \u20ac0.6 million, respectively.
The following table shows the changes in the present value of the defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Liability for defined benefit obligations at the beginning of period | 16,497 | 15,703 |
| Current service costs and interest | 1,966 | 809 |
| Benefits paid | -1,123 | 13 |
| Remeasurement arising from changes in demographic assumptions | 79 | -496 |
| Remeasurement arising from changes in financial assumptions | -359 | 228 |
| Remeasurement arising from experience | -593 | 202 |
| Business combination | 118 | 72 |
| Exchange rate differences | 9 | -34 |
| Liability for defined benefit obligations at 31 December | 16,594 | 16,497 |
The following table shows the changes in the plan assets:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Fair value of plan assets at the beginning of the period | 12,795 | 12,625 |
| Contributions paid into the plan | 501 | 822 |
| Benefits paid by the plan | -647 | -273 |
| Expected return on plan assets | 585 | -63 |
| Return on assets excluding amounts in net interests | -2,336 | -361 |
| Exchange rate differences | -171 | 45 |
| Fair value of plan assets at 31 December | 10,727 | 12,795 |
At year-end, the plan assets consisted mainly of equity instruments.
The net periodic cost for defined benefit obligations recognized in the income statement is shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Current service costs | -1,340 | -1,680 |
| Interest on obligation | -520 | -230 |
| Interest on assets | 585 | -63 |
| \u00a0 | -1,275 | -1,973 |
The changes in actuarial gains and losses from defined benefit obligations and plan assets recognized in other comprehensive income are shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Return on assets, excluding amounts in net interests | -2,336 | -361 |
| Actuarial gains and losses on benefit obligations | 872 | 66 |
| Effect of changes in asset ceiling | 1,935 | 153 |
| Exchange rate differences | 188 | -36 |
| \u00a0 | 659 | -178 |
The Group has long-term incentive plans (LTIPs) in place, granting share awards to certain directors, employees, and self-employed managers of the Group. The granting of share awards is subject to a three-year performance period (starting January 1) and takes into account the following metrics and weightings: 50% relative total shareholders' return (market condition), 35% Adjusted EBITA (non-market condition), and 15% carbon emissions reduction (non-market condition). The awards are subject to a vesting period of three years starting from the grant date and are dependent on the Remuneration and Nomination Committee determining whether performance targets have been met. Based on performance delivered, the number of performance shares awarded will be vested and become unconditionally owned by the participant.
The movement in number of performance shares outstanding and the related weighted average fair value per share are as follows:
| \u00a0 | 2024 | 2023 | ||
|---|---|---|---|---|
| (in number of shares and \u20ac) | Number of shares | Weighted average fair value | Number of shares | Weighted average fair value |
| Outstanding as of 1 January | 246,632 | 21.75 | 165,605 | 19.19 |
| Granted during the year | 228,770 | 16.91 | 172,817 | 24.07 |
| Forfeited during the year | - 29,977 | N/A | - 91,790 | N/A |
| Performance adjustment | - 202,315 | N/A | - | N/A |
| Outstanding as of 31 December | 243,110 | 22.71 | 246,632 | 21.75 |
The fair value of the performance shares was measured on the basis of Azelis' share price on the grant date and has been discounted with the sum of the expected dividend yield for the performance period. The expected dividend yield has been determined based on target pay-out ratio and consensus figures for net profit, divided by market capitalization. The market condition of total shareholders return was embedded in the fair value based on a Monte Carlo simulation incorporating a number of assumptions (volatility, expected dividend yield, and the correlation coefficients between the share price returns of the peer companies).
In 2024, above changes in outstanding performance shares resulted in an expense of \u20ac1.3 million (2023: \u20ac1.4 million), which is recognized in the consolidated income statement as part of employee benefits expenses.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Distribution | 95,033 | 86,534 |
| Utilities, communication, insurance and administrative expenses | 50,400 | 51,356 |
| Commercial expenses | 11,616 | 10,489 |
| Professional service fees | 29,535 | 28,880 |
| Lease expenses | 1,833 | 449 |
| Other expenses | 27,229 | 14,618 |
| \u00a0 | 215,646 | 192,325 |
The professional services & other expenses of 2024 include \u20ac3.2 million (2023: \u20ac5.8 million) mainly regarding M&A activities.
Audit fees included under professional service fees in the below table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Audit fees | \u00a0 | \u00a0 |
| Total fees for the audit of the annual accounts | 2,693 | 2,098 |
| Total fees for audit by non-PWC companies | 703 | 645 |
| Non-audit fees paid to group auditor network | \u00a0 | \u00a0 |
| Total fees for other attestation | 453 | 512 |
| Total fees for other non-audit services (incl. tax) | 64 | 56 |
| \u00a0 | 3,914 | 3,311 |
In 2024, audit fees increased mainly due to audit requirements for the sustainability statement under CSRD.
| (in thousands of \u20ac) | Goodwill | Trademarks | Distribution rights | Concessions and licenses | Development costs | Customer lists | Other | Intangibles in progress | Total |
|---|---|---|---|---|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,174,256 | 317,378 | 964,516 | 8,159 | 7,738 | 5,670 | 26,372 | 5,371 | 3,509,462 |
| Accumulated amortization and impairment | - | - | -137,552 | -4,702 | -3,904 | -1,663 | -13,789 | -3,106 | -164,720 |
| \u00a0 | 2,174,256 | 317,378 | 826,964 | 3,456 | 3,834 | 4,007 | 12,583 | 2,265 | 3,344,742 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 256,106 | - | 246,125 | 30 | 35 | - | 6,271 | - | 508,567 |
| Additions | - | - | 1,086 | 73 | 1,284 | 567 | 1,667 | 5,490 | 10,166 |
| Amortization | - | - | -57,319 | -395 | -1,434 | -937 | -4,372 | - | -64,458 |
| Impairment charge | - | - | -1,662 | - | - | - | - | - | -1,662 |
| Disposals | - | - | - | - | - | 13 | -383 | 12 | -358 |
| Reclassifications | - | - | - | -15 | -4 | 508 | 911 | -1,224 | 177 |
| Hyperinflation | 19,627 | - | 12,419 | 2 | - | - | 36 | - | 32,083 |
| Translation differences | -40,738 | - | -29,657 | -90 | 1 | -370 | 68 | -87 | -70,873 |
| Changes in the Period | 234,995 | - | 170,993 | -395 | -118 | -220 | 4,198 | 4,191 | 413,642 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,409,251 | 317,378 | 1,194,490 | 8,159 | 9,054 | 6,387 | 34,942 | 9,562 | 3,989,224 |
| Accumulated amortization and impairment | - | - | -196,534 | -5,097 | -5,338 | -2,600 | -18,162 | -3,106 | -230,840 |
| \u00a0 | 2,409,251 | 317,378 | 997,956 | 3,061 | 3,716 | 3,786 | 16,780 | 6,456 | 3,758,384 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 73,560 | - | 76,613 | 178 | - | - | - | - | 150,350 |
| Additions | - | - | 1,094 | 42 | 1,269 | 17 | 435 | 6,612 | 9,469 |
| Amortization | - | - | -62,791 | -819 | -1,660 | -691 | -5,205 | - | -71,166 |
| Impairment charge | - | - | -1,567 | - | - | - | - | - | -1,567 |
| Disposals | 21 | - | - | -96 | -10 | - | 36 | -82 | -132 |
| Reclassifications | - | - | - | 2,011 | 4,139 | -1 | 6,038 | -11,683 | 505 |
| Hyperinflation | 23,036 | - | 13,276 | 1 | - | - | 30 | - | 36,344 |
| Translation differences | 30,976 | - | 14,905 | 160 | 139 | 77 | 104 | 77 | 46,438 |
| Changes in the Period | 127,593 | - | 41,528 | 1,476 | 3,878 | -598 | 1,439 | -5,076 | 170,241 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,536,844 | 317,378 | 1,300,377 | 10,453 | 14,592 | 6,480 | 41,586 | 4,486 | 4,232,198 |
| Accumulated amortization and impairment | - | - | -260,893 | -5,916 | -6,998 | -3,292 | -23,366 | -3,106 | -303,573 |
| \u00a0 | 2,536,844 | 317,378 | 1,039,484 | 4,538 | 7,594 | 3,189 | 18,219 | 1,380 | 3,928,625 |
The reclassifications relate mainly to internal project costs, which are recognized at year-end as intangibles.
The trademark relates to the Azelis name. Azelis uses its name globally, and its trade name is considered to be a key asset of its distribution activities given its status as a major distributor in the specialty chemicals sector. The name both supports the Group in onboarding principals and customers, and in acquiring companies that want to become part of the Group as they know that their business will grow being part of it. The Azelis trademark is estimated to have an indefinite economic life for amortization purposes; therefore, effectively no amortization expenses are being booked through Azelis' income statement. The total value of \u20ac317.4 million on December 31, 2024, originates entirely from the EQT/PSP acquisition in November 2018 and remained unchanged since that date.
The translation differences of \u20ac46.4 million gain (2023: \u20ac70.9 million loss) are recognized in other comprehensive income and accumulated in the translation reserve within equity. Reference is made to note 21.4.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purpose of impairment testing, goodwill is allocated to the following CGUs:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| EMEA | 843,470 | 782,687 |
| Americas | 1,295,037 | 1,251,715 |
| Asia Pacific | 398,337 | 374,849 |
| Total goodwill | 2,536,844 | 2,409,251 |
All goodwill acquired in the business combinations was allocated to a CGU at the end of the reporting period. Goodwill is allocated on a regional level as it is the Group's regions that are expected to benefit from the business combinations, and as goodwill is also monitored internally at regional level. The Group expects synergies to be realized in the region of acquisition.
Trademarks with a book value of \u20ac317.4 million (2023: \u20ac317.4 million) have an indefinite life. These do not generate cash inflows independently and qualify as corporate assets. As their carrying amount cannot be allocated to the CGUs on a reasonable and consistent basis, the corporate assets are allocated to the Group as a whole, and the impairment test is performed in two stages.
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
| (in thousands of \u20ac) | Land and buildings | Plant and equipment | Other | Total |
|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 32,491 | 15,193 | 30,403 | 78,086 |
| Accumulated depreciation and impairment | -4,144 | -4,877 | -11,182 | -20,203 |
| \u00a0 | 28,347 | 10,316 | 19,221 | 57,884 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 840 | 3,398 | 11,909 | 16,148 |
| Additions | 431 | 1,605 | 6,463 | 8,499 |
| Depreciation | -1,143 | -2,278 | -5,345 | -8,765 |
| Reversal of impairment | 3,311 | - | - | 3,311 |
| Disposals | -2,136 | -353 | 82 | -2,407 |
| Reclassifications | 47 | 65 | -223 | -111 |
| Hyperinflation | - | 2 | 129 | 131 |
| Translation differences | -752 | -9 | -351 | -1,112 |
| Changes in the Period | 598 | 2,430 | 12,664 | 15,693 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 30,921 | 19,901 | 48,412 | 99,234 |
| Accumulated depreciation and impairment | -1,976 | -7,154 | -16,526 | -25,657 |
| \u00a0 | 28,945 | 12,747 | 31,886 | 73,577 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 353 | 265 | 239 | 857 |
| Additions | 90 | 1,198 | 7,833 | 9,121 |
| Depreciation | -1,189 | -2,347 | -5,827 | -9,363 |
| Impairment | -284 | - | -30 | -314 |
| Disposals | -3,850 | -684 | -612 | -5,147 |
| Reclassifications | 27 | 1 | -889 | -861 |
| Hyperinflation | - | 9 | 36 | 46 |
| Translation differences | -265 | 56 | -1,644 | -1,853 |
| Changes in the Period | -5,118 | -1,502 | -894 | -7,514 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 27,276 | 20,746 | 53,375 | 101,397 |
| Accumulated depreciation and impairment | -3,449 | -9,501 | -22,383 | -35,334 |
| \u00a0 | 23,827 | 11,245 | 30,992 | 66,063 |
The category 'Other' mainly relates to leasehold improvements, comprising also an insignificant amount of assets under construction.
On December 31, 2024, the Group had not pledged any land and buildings, or plant and equipment as security for the bank loans (2023: zero). Other restrictions are mainly related to leasehold improvements and leased machinery.
The right of use assets mainly relates to rental agreements for offices, warehouses, and cars.
| (in thousands of \u20ac) | Land and buildings | Other | Total |
|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 130,385 | 27,642 | 158,027 |
| Accumulated depreciation and impairment | -42,829 | -18,215 | -61,045 |
| \u00a0 | 87,555 | 9,426 | 96,982 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 16,174 | 1,796 | 17,971 |
| Additions | 19,432 | 9,776 | 29,209 |
| Depreciation | -19,357 | -5,950 | -25,307 |
| Disposals | -1,309 | -98 | -1,407 |
| Remeasurements | 6,212 | 1,273 | 7,485 |
| Hyperinflation | 3,566 | -188 | 3,378 |
| Translation differences | -4,775 | -487 | -5,262 |
| Changes in the Period | 19,945 | 6,122 | 26,066 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 169,686 | 39,714 | 209,399 |
| Accumulated depreciation and impairment | -62,186 | -24,166 | -86,352 |
| \u00a0 | 107,500 | 15,548 | 123,048 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 817 | 164 | 981 |
| Additions | 56,851 | 10,543 | 67,394 |
| Depreciation | -24,958 | -7,134 | -32,092 |
| Remeasurements | 8,743 | 417 | 9,159 |
| Hyperinflation | 3,011 | 257 | 3,268 |
| Translation differences | -621 | -93 | -714 |
| Changes in the Period | 34,799 | 3,699 | 38,498 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 229,443 | 50,547 | 279,990 |
| Accumulated depreciation and impairment | -87,144 | -31,300 | -118,444 |
| \u00a0 | 142,299 | 19,247 | 161,546 |
Remeasurements mainly relate to the prolongation of the lease period of existing contracts.
The Group has lease contracts that have not yet commenced as of December 31, 2024 with future lease payments of around \u20ac4.4 million (2023: \u20ac82.2 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfProfitLossFromOperatingActivitiesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "general-data-placeofbusiness-i6135": { "value": "Belgium", "dimensions": { "concept": "ifrs-full:PrincipalPlaceOfBusiness", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6394-1": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Revenue from sales, net of discounts | 4,197,242 | 4,133,899 |
| Revenue from commercial services | 1,970 | 2,270 |
| \u00a0 | 4,199,212 | 4,136,169 |
| Commissions received | 14,802 | 16,056 |
| \u00a0 | 4,214,014 | 4,152,225 |
The Group's revenues are broken down over product group as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Life Sciences | 2,653,493 | 63.0% | 2,565,485 | 61.8% |
| Industrial Chemicals | 1,560,521 | 37.0% | 1,586,740 | 38.2% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
The Group's revenues are broken down over its country of domicile and regions as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Belgium | 99,509 | 2.4% | 120,729 | 2.9% |
| Rest of EMEA | 1,693,207 | 40.2% | 1,673,128 | 40.3% |
| EMEA | 1,792,716 | 42.5% | 1,793,857 | 43.2% |
| Americas | 1,536,223 | 36.5% | 1,454,320 | 35.0% |
| Asia Pacific | 885,076 | 21.0% | 904,047 | 21.8% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Revenue from sales, net of discounts | 4,197,242 | 4,133,899 |
| Revenue from commercial services | 1,970 | 2,270 |
| \u00a0 | 4,199,212 | 4,136,169 |
| Commissions received | 14,802 | 16,056 |
| \u00a0 | 4,214,014 | 4,152,225 |
The Group's revenues are broken down over product group as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Life Sciences | 2,653,493 | 63.0% | 2,565,485 | 61.8% |
| Industrial Chemicals | 1,560,521 | 37.0% | 1,586,740 | 38.2% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
The Group's revenues are broken down over its country of domicile and regions as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Belgium | 99,509 | 2.4% | 120,729 | 2.9% |
| Rest of EMEA | 1,693,207 | 40.2% | 1,673,128 | 40.3% |
| EMEA | 1,792,716 | 42.5% | 1,793,857 | 43.2% |
| Americas | 1,536,223 | 36.5% | 1,454,320 | 35.0% |
| Asia Pacific | 885,076 | 21.0% | 904,047 | 21.8% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Revenue from sales, net of discounts | 4,197,242 | 4,133,899 |
| Revenue from commercial services | 1,970 | 2,270 |
| \u00a0 | 4,199,212 | 4,136,169 |
| Commissions received | 14,802 | 16,056 |
| \u00a0 | 4,214,014 | 4,152,225 |
The Group's revenues are broken down over product group as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Life Sciences | 2,653,493 | 63.0% | 2,565,485 | 61.8% |
| Industrial Chemicals | 1,560,521 | 37.0% | 1,586,740 | 38.2% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
The Group's revenues are broken down over its country of domicile and regions as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Belgium | 99,509 | 2.4% | 120,729 | 2.9% |
| Rest of EMEA | 1,693,207 | 40.2% | 1,673,128 | 40.3% |
| EMEA | 1,792,716 | 42.5% | 1,793,857 | 43.2% |
| Americas | 1,536,223 | 36.5% | 1,454,320 | 35.0% |
| Asia Pacific | 885,076 | 21.0% | 904,047 | 21.8% |
| \u00a0 | 4,214,014 | 100.0% | 4,152,225 | 100.0% |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Recharge of expenses to customers | 15,637 | 8,689 |
| Other income | 8,319 | 14,759 |
| \u00a0 | 23,956 | 23,448 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Recharge of expenses to customers | 15,637 | 8,689 |
| Other income | 8,319 | 14,759 |
| \u00a0 | 23,956 | 23,448 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Distribution | 95,033 | 86,534 |
| Utilities, communication, insurance and administrative expenses | 50,400 | 51,356 |
| Commercial expenses | 11,616 | 10,489 |
| Professional service fees | 29,535 | 28,880 |
| Lease expenses | 1,833 | 449 |
| Other expenses | 27,229 | 14,618 |
| \u00a0 | 215,646 | 192,325 |
The professional services & other expenses of 2024 include \u20ac3.2 million (2023: \u20ac5.8 million) mainly regarding M&A activities.
Audit fees included under professional service fees in the below table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Audit fees | \u00a0 | \u00a0 |
| Total fees for the audit of the annual accounts | 2,693 | 2,098 |
| Total fees for audit by non-PWC companies | 703 | 645 |
| Non-audit fees paid to group auditor network | \u00a0 | \u00a0 |
| Total fees for other attestation | 453 | 512 |
| Total fees for other non-audit services (incl. tax) | 64 | 56 |
| \u00a0 | 3,914 | 3,311 |
In 2024, audit fees increased mainly due to audit requirements for the sustainability statement under CSRD.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingIncomeExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6518-1": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Purchase of goods including change in inventory | 3,128,291 | 3,122,521 |
| Freight and additional charges on purchases | 78,633 | 69,032 |
| \u00a0 | 3,206,924 | 3,191,553 |
Usage of inventories is recorded under 'Costs for goods and consumables' in the consolidated income statement. In 2024, write-downs of inventory of \u20ac15.6 million (2023: \u20ac10.3 million) are included under 'Costs for goods and consumables'.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCostOfSalesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6518-2": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Purchase of goods including change in inventory | 3,128,291 | 3,122,521 |
| Freight and additional charges on purchases | 78,633 | 69,032 |
| \u00a0 | 3,206,924 | 3,191,553 |
Wages and salaries include managers\u2019 fees and current service costs from employee benefits.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Wages and salaries and other personnel related expenses | 275,263 | 269,003 |
| Social charges | 39,289 | 34,790 |
| \u00a0 | 314,552 | 303,793 |
The number of employees (FTE, including contingent workers) located in the regions is set out below:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| EMEA | 1,978 | 1,884 |
| Americas | 1,153 | 1,111 |
| Asia Pacific | 1,013 | 1,031 |
| Holdings | 177 | 180 |
| \u00a0 | 4,321 | 4,206 |
In 2024, the workforce has increased by 160 employees due to acquisitions completed during the year.
The Group is subject to the following defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| German companies | 606 | 640 |
| Belgian companies | 5,376 | 4,849 |
| French companies | 1,971 | 1,945 |
| Italian companies | 1,875 | 1,950 |
| UK companies | 4,850 | 5,653 |
| Other companies | 1,917 | 1,460 |
| Total present value of obligations | 16,594 | 16,497 |
| Fair value of plan assets | -10,727 | -12,795 |
| Amounts not recognized as asset due to asset ceiling | 410 | 2,345 |
| Recognized liability for defined benefit obligations | 6,277 | 6,047 |
| Liability for long-service leave and other employees' benefits | 7,605 | 7,590 |
| Total employee benefits recognized in the balance sheet | 13,882 | 13,637 |
The Group has defined benefit plans in place in Belgium (partly funded), France (unfunded), Italy (unfunded), United Kingdom (wholly funded), Germany (partly funded), Thailand (unfunded), Indonesia (unfunded), and the Philippines (unfunded).
The Group's net defined benefit obligation is based on the difference between the present values of the defined benefit obligations and the plan assets.
Both defined benefit plans and defined contribution plans are in place. Charges for defined contribution schemes amount to \u20ac3.8 million (2023: \u20ac4.2 million). Expenses for all plans are included in 'Wages, salaries and other personnel related expenses'.
The pension plans in place in Belgium are all legally structured as defined contribution plans but qualify as defined benefit plans due to their guaranteed minimum return, which exposes the employer to a financial risk; there is a legal obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
In the United Kingdom, the defined benefit pension plan is financed through the accumulation of plan assets held separately from those of the Group in an independently administered fund.
The actuarial calculations of the present value of defined benefit obligations were based on the following main assumptions:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| Discount rate | 2.84% - 7.1% | 3.2% - 6.3% |
| Inflation | 3.2% - 10.1% | 2.5% - 4.47% |
| Future pension increases | 0% - 6% | 0% - 6% |
| Future salary increases | 0% - 10% | 0% - 6% |
In the event that the discount rate would increase or decrease by 0.5%, the defined benefit obligation would decrease by \u20ac0.6 million or increase by \u20ac0.6 million, respectively.
The following table shows the changes in the present value of the defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Liability for defined benefit obligations at the beginning of period | 16,497 | 15,703 |
| Current service costs and interest | 1,966 | 809 |
| Benefits paid | -1,123 | 13 |
| Remeasurement arising from changes in demographic assumptions | 79 | -496 |
| Remeasurement arising from changes in financial assumptions | -359 | 228 |
| Remeasurement arising from experience | -593 | 202 |
| Business combination | 118 | 72 |
| Exchange rate differences | 9 | -34 |
| Liability for defined benefit obligations at 31 December | 16,594 | 16,497 |
The following table shows the changes in the plan assets:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Fair value of plan assets at the beginning of the period | 12,795 | 12,625 |
| Contributions paid into the plan | 501 | 822 |
| Benefits paid by the plan | -647 | -273 |
| Expected return on plan assets | 585 | -63 |
| Return on assets excluding amounts in net interests | -2,336 | -361 |
| Exchange rate differences | -171 | 45 |
| Fair value of plan assets at 31 December | 10,727 | 12,795 |
At year-end, the plan assets consisted mainly of equity instruments.
The net periodic cost for defined benefit obligations recognized in the income statement is shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Current service costs | -1,340 | -1,680 |
| Interest on obligation | -520 | -230 |
| Interest on assets | 585 | -63 |
| \u00a0 | -1,275 | -1,973 |
The changes in actuarial gains and losses from defined benefit obligations and plan assets recognized in other comprehensive income are shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Return on assets, excluding amounts in net interests | -2,336 | -361 |
| Actuarial gains and losses on benefit obligations | 872 | 66 |
| Effect of changes in asset ceiling | 1,935 | 153 |
| Exchange rate differences | 188 | -36 |
| \u00a0 | 659 | -178 |
The Group has long-term incentive plans (LTIPs) in place, granting share awards to certain directors, employees, and self-employed managers of the Group. The granting of share awards is subject to a three-year performance period (starting January 1) and takes into account the following metrics and weightings: 50% relative total shareholders' return (market condition), 35% Adjusted EBITA (non-market condition), and 15% carbon emissions reduction (non-market condition). The awards are subject to a vesting period of three years starting from the grant date and are dependent on the Remuneration and Nomination Committee determining whether performance targets have been met. Based on performance delivered, the number of performance shares awarded will be vested and become unconditionally owned by the participant.
The movement in number of performance shares outstanding and the related weighted average fair value per share are as follows:
| \u00a0 | 2024 | 2023 | ||
|---|---|---|---|---|
| (in number of shares and \u20ac) | Number of shares | Weighted average fair value | Number of shares | Weighted average fair value |
| Outstanding as of 1 January | 246,632 | 21.75 | 165,605 | 19.19 |
| Granted during the year | 228,770 | 16.91 | 172,817 | 24.07 |
| Forfeited during the year | - 29,977 | N/A | - 91,790 | N/A |
| Performance adjustment | - 202,315 | N/A | - | N/A |
| Outstanding as of 31 December | 243,110 | 22.71 | 246,632 | 21.75 |
The fair value of the performance shares was measured on the basis of Azelis' share price on the grant date and has been discounted with the sum of the expected dividend yield for the performance period. The expected dividend yield has been determined based on target pay-out ratio and consensus figures for net profit, divided by market capitalization. The market condition of total shareholders return was embedded in the fair value based on a Monte Carlo simulation incorporating a number of assumptions (volatility, expected dividend yield, and the correlation coefficients between the share price returns of the peer companies).
In 2024, above changes in outstanding performance shares resulted in an expense of \u20ac1.3 million (2023: \u20ac1.4 million), which is recognized in the consolidated income statement as part of employee benefits expenses.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Distribution | 95,033 | 86,534 |
| Utilities, communication, insurance and administrative expenses | 50,400 | 51,356 |
| Commercial expenses | 11,616 | 10,489 |
| Professional service fees | 29,535 | 28,880 |
| Lease expenses | 1,833 | 449 |
| Other expenses | 27,229 | 14,618 |
| \u00a0 | 215,646 | 192,325 |
The professional services & other expenses of 2024 include \u20ac3.2 million (2023: \u20ac5.8 million) mainly regarding M&A activities.
Audit fees included under professional service fees in the below table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Audit fees | \u00a0 | \u00a0 |
| Total fees for the audit of the annual accounts | 2,693 | 2,098 |
| Total fees for audit by non-PWC companies | 703 | 645 |
| Non-audit fees paid to group auditor network | \u00a0 | \u00a0 |
| Total fees for other attestation | 453 | 512 |
| Total fees for other non-audit services (incl. tax) | 64 | 56 |
| \u00a0 | 3,914 | 3,311 |
In 2024, audit fees increased mainly due to audit requirements for the sustainability statement under CSRD.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
The income tax expenses consist of:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Current period tax expense (-) / income | -78,110 | -78,013 |
| Adjustments to prior years income tax expense (-) / income | 257 | -1,419 |
| Provisions for tax risks | -45 | -38 |
| \u00a0 | -77,898 | -79,470 |
| Deferred tax income / loss (-) | 11,258 | 21,544 |
| Total income tax income / expense (-) | -66,640 | -57,926 |
Income tax expense consists primarily of income taxes for the current period and prior period of Group companies.
The differences between the taxable income related to the Belgian tax rate and the effective tax rate are reconciled as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Profit/loss (-) before tax | 256,108 | \u00a0 | 247,238 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income tax using the domestic corporation tax rate | -63,617 | -25% | -61,810 | -25% |
| Impact of tax in different jurisdictions with difference to domestic rate | 1,763 | 1% | 1,013 | 0% |
| Tax effect of income not subject to tax | 11,026 | 4% | 9,381 | 4% |
| Tax effect of expenses not deductible for tax purposes | -12,272 | -5% | -16,482 | -7% |
| Utilization of previously unrecognized tax losses | 109 | 0% | 1,622 | 1% |
| Tax effect of unrecognized current tax losses | -3,164 | -1% | -2,706 | -1% |
| Deferred tax assets on previously unrecognized tax losses | 4,330 | 2% | 15,707 | 6% |
| Adjustments on applicable tax rate | -819 | 0% | -2,505 | -1% |
| Adjustments to prior year income tax expense (income) | 257 | 0% | -2,739 | -1% |
| Pillar Two | -1,115 | 0% | 0 | 0% |
| Other | -3,138 | -1% | 593 | 0% |
| Total income tax income / expense (-) in income statement | -66,640 | -26.0% | -57,926 | -23.4% |
The effective tax rate 2024 has mainly been affected by:
Non-deductible expenses mainly driven by monetary loss on hyperinflation
Fair value adjustment on financial liabilities regarding acquisition-related earnout liabilities and put options on non-controlling interests
Recognition of deferred tax assets on previously unrecognized tax losses, based on the projection of future tax profits
Deferred tax assets and liabilities are attributable to the following:
| (in thousands of \u20ac) | 1 January | Business combinations | Income statement | OCI | Other | Translation differences | December 31 |
|---|---|---|---|---|---|---|---|
| Property, plant and equipment | -35,699 | -2,237 | 13,954 | - | - | 192 | -23,790 |
| Intangible assets | -255,071 | -14,097 | -385 | - | 65,234 | -4,390 | -208,708 |
| Inventories | 10,323 | 749 | -3,738 | - | -6,857 | -48 | 429 |
| Trade receivables | 5,636 | 589 | -1,454 | - | -2,985 | -92 | 1,694 |
| Loans and borrowings | 37,657 | 233 | -4,670 | 6,508 | -34,094 | -100 | 5,535 |
| Employee benefits | 6,343 | 54 | 489 | -165 | -5,510 | 144 | 1,355 |
| Provisions, derivatives and other items | 2,212 | - | 5,122 | - | -3,617 | 131 | 3,848 |
| Untaxed reserves | 76 | - | 32 | - | -38 | -3 | 67 |
| Tax value of loss carry-forwards | 25,910 | - | 1,908 | - | -12,133 | 82 | 15,766 |
| \u00a0 | -202,613 | -14,709 | 11,258 | 6,343 | - | -4,084 | -203,804 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Deferred Tax liability | -218,306 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -225,904 |
| Deferred Tax assets | 15,693 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 22,100 |
| \u00a0 | -202,613 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -203,804 |
Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible for the Group companies, management believes it is probable that the Group will realize the benefits of these deductible differences.
| (in thousands of \u20ac) | 1 January | Business combinations | Income statement | OCI | Other | Translation differences | December 31 |
|---|---|---|---|---|---|---|---|
| Property, plant and equipment | -2,640 | -6,123 | -2,787 | - | -27,305 | 3,156 | -35,699 |
| Intangible assets | -190,198 | -66,188 | -3,719 | - | 3,908 | 1,126 | -255,071 |
| Inventories | 9,589 | 5,445 | -4,432 | - | - | -279 | 10,323 |
| Trade receivables | 3,835 | 1,863 | 10 | - | - | -72 | 5,636 |
| Loans and borrowings | 1,792 | 5,133 | 6,486 | - | 27,305 | -3,059 | 37,657 |
| Employee benefits | 1,492 | 402 | 4,626 | -17 | - | -160 | 6,343 |
| Provisions, derivatives and other items | 714 | 123 | 1,473 | - | - | -98 | 2,212 |
| Untaxed reserves | 8,344 | - | -8,142 | - | - | -126 | 76 |
| Tax value of loss carry-forwards | -3,078 | 125 | 28,029 | - | - | 834 | 25,910 |
| \u00a0 | -170,150 | -59,220 | 21,544 | -17 | 3,908 | 1,322 | -202,613 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Deferred Tax liability | -190,755 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -218,306 |
| Deferred Tax assets | 20,605 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 15,693 |
| \u00a0 | -170,150 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -202,613 |
The following deferred tax assets related to compensable losses of Group companies have not been recognized:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Gross | Tax | Gross | Tax | |
| Tax losses | 41,324 | 10,331 | 75,321 | 18,830 |
Unrecognized carry forward losses of \u20ac37.0 million (2023: \u20ac69.8 million) can be used unlimited in time, and \u20ac4.3 million (2023: \u20ac5.6 million for period 2023-2037) need to be used until 2031.
No deferred tax assets have been recognized on these carry forward losses, due to the fact that they do not meet the recognition criteria for a deferred tax asset.
The Group may have unrecognized tax liabilities in respect of taxable temporary differences relating to the non-distributed reserves of one of its subsidiaries that would be taxed when distributed. No deferred tax liability has been recognized because the Group controls whether the liability will be incurred, and management is satisfied that the liability will not be incurred in the foreseeable future.
The Group is within the scope of the OECD Pillar Two model rules. In Belgium, the jurisdiction in which Azelis Group NV is incorporated, Pillar Two legislation has come into effect from January 1, 2024. Under the legislation, the parent company is liable to pay a top-up tax for the difference between the GloBE effective tax rate per jurisdiction and the 15% minimum rate for its subsidiaries that are taxed at a GloBE effective tax rate of less than 15%. The Group has a limited number of jurisdictions with an effective tax rate lower than 15%. As at December 31, 2024, \u20ac15.7 million of the Group\u2019s GloBE income is taxed at an average effective tax rate of 8.2% and is subject to the top-up tax. As of December 31, 2024, the Group has recognized in its corporate income tax expense a Pillar Two top-up tax expense for \u20ac1.1 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfExpensesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6539-1": { "value": "Wages and salaries include managers\u2019 fees and current service costs from employee benefits.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Wages and salaries and other personnel related expenses | 275,263 | 269,003 |
| Social charges | 39,289 | 34,790 |
| \u00a0 | 314,552 | 303,793 |
The number of employees (FTE, including contingent workers) located in the regions is set out below:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| EMEA | 1,978 | 1,884 |
| Americas | 1,153 | 1,111 |
| Asia Pacific | 1,013 | 1,031 |
| Holdings | 177 | 180 |
| \u00a0 | 4,321 | 4,206 |
In 2024, the workforce has increased by 160 employees due to acquisitions completed during the year.
The Group is subject to the following defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| German companies | 606 | 640 |
| Belgian companies | 5,376 | 4,849 |
| French companies | 1,971 | 1,945 |
| Italian companies | 1,875 | 1,950 |
| UK companies | 4,850 | 5,653 |
| Other companies | 1,917 | 1,460 |
| Total present value of obligations | 16,594 | 16,497 |
| Fair value of plan assets | -10,727 | -12,795 |
| Amounts not recognized as asset due to asset ceiling | 410 | 2,345 |
| Recognized liability for defined benefit obligations | 6,277 | 6,047 |
| Liability for long-service leave and other employees' benefits | 7,605 | 7,590 |
| Total employee benefits recognized in the balance sheet | 13,882 | 13,637 |
The Group has defined benefit plans in place in Belgium (partly funded), France (unfunded), Italy (unfunded), United Kingdom (wholly funded), Germany (partly funded), Thailand (unfunded), Indonesia (unfunded), and the Philippines (unfunded).
The Group's net defined benefit obligation is based on the difference between the present values of the defined benefit obligations and the plan assets.
Both defined benefit plans and defined contribution plans are in place. Charges for defined contribution schemes amount to \u20ac3.8 million (2023: \u20ac4.2 million). Expenses for all plans are included in 'Wages, salaries and other personnel related expenses'.
The pension plans in place in Belgium are all legally structured as defined contribution plans but qualify as defined benefit plans due to their guaranteed minimum return, which exposes the employer to a financial risk; there is a legal obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
In the United Kingdom, the defined benefit pension plan is financed through the accumulation of plan assets held separately from those of the Group in an independently administered fund.
The actuarial calculations of the present value of defined benefit obligations were based on the following main assumptions:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| Discount rate | 2.84% - 7.1% | 3.2% - 6.3% |
| Inflation | 3.2% - 10.1% | 2.5% - 4.47% |
| Future pension increases | 0% - 6% | 0% - 6% |
| Future salary increases | 0% - 10% | 0% - 6% |
In the event that the discount rate would increase or decrease by 0.5%, the defined benefit obligation would decrease by \u20ac0.6 million or increase by \u20ac0.6 million, respectively.
The following table shows the changes in the present value of the defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Liability for defined benefit obligations at the beginning of period | 16,497 | 15,703 |
| Current service costs and interest | 1,966 | 809 |
| Benefits paid | -1,123 | 13 |
| Remeasurement arising from changes in demographic assumptions | 79 | -496 |
| Remeasurement arising from changes in financial assumptions | -359 | 228 |
| Remeasurement arising from experience | -593 | 202 |
| Business combination | 118 | 72 |
| Exchange rate differences | 9 | -34 |
| Liability for defined benefit obligations at 31 December | 16,594 | 16,497 |
The following table shows the changes in the plan assets:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Fair value of plan assets at the beginning of the period | 12,795 | 12,625 |
| Contributions paid into the plan | 501 | 822 |
| Benefits paid by the plan | -647 | -273 |
| Expected return on plan assets | 585 | -63 |
| Return on assets excluding amounts in net interests | -2,336 | -361 |
| Exchange rate differences | -171 | 45 |
| Fair value of plan assets at 31 December | 10,727 | 12,795 |
At year-end, the plan assets consisted mainly of equity instruments.
The net periodic cost for defined benefit obligations recognized in the income statement is shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Current service costs | -1,340 | -1,680 |
| Interest on obligation | -520 | -230 |
| Interest on assets | 585 | -63 |
| \u00a0 | -1,275 | -1,973 |
The changes in actuarial gains and losses from defined benefit obligations and plan assets recognized in other comprehensive income are shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Return on assets, excluding amounts in net interests | -2,336 | -361 |
| Actuarial gains and losses on benefit obligations | 872 | 66 |
| Effect of changes in asset ceiling | 1,935 | 153 |
| Exchange rate differences | 188 | -36 |
| \u00a0 | 659 | -178 |
The Group has long-term incentive plans (LTIPs) in place, granting share awards to certain directors, employees, and self-employed managers of the Group. The granting of share awards is subject to a three-year performance period (starting January 1) and takes into account the following metrics and weightings: 50% relative total shareholders' return (market condition), 35% Adjusted EBITA (non-market condition), and 15% carbon emissions reduction (non-market condition). The awards are subject to a vesting period of three years starting from the grant date and are dependent on the Remuneration and Nomination Committee determining whether performance targets have been met. Based on performance delivered, the number of performance shares awarded will be vested and become unconditionally owned by the participant.
The movement in number of performance shares outstanding and the related weighted average fair value per share are as follows:
| \u00a0 | 2024 | 2023 | ||
|---|---|---|---|---|
| (in number of shares and \u20ac) | Number of shares | Weighted average fair value | Number of shares | Weighted average fair value |
| Outstanding as of 1 January | 246,632 | 21.75 | 165,605 | 19.19 |
| Granted during the year | 228,770 | 16.91 | 172,817 | 24.07 |
| Forfeited during the year | - 29,977 | N/A | - 91,790 | N/A |
| Performance adjustment | - 202,315 | N/A | - | N/A |
| Outstanding as of 31 December | 243,110 | 22.71 | 246,632 | 21.75 |
The fair value of the performance shares was measured on the basis of Azelis' share price on the grant date and has been discounted with the sum of the expected dividend yield for the performance period. The expected dividend yield has been determined based on target pay-out ratio and consensus figures for net profit, divided by market capitalization. The market condition of total shareholders return was embedded in the fair value based on a Monte Carlo simulation incorporating a number of assumptions (volatility, expected dividend yield, and the correlation coefficients between the share price returns of the peer companies).
In 2024, above changes in outstanding performance shares resulted in an expense of \u20ac1.3 million (2023: \u20ac1.4 million), which is recognized in the consolidated income statement as part of employee benefits expenses.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade payables | 486,804 | 434,085 |
| Other taxes | 12,199 | 13,032 |
| Employee and social security payables | 69,191 | 71,409 |
| Derivatives | 112 | 3,921 |
| Other payables | 132,261 | 277,023 |
| Total current payables | 700,567 | 799,470 |
| \u00a0 | \u00a0 | \u00a0 |
| Other payables | 33,166 | 69,816 |
| Other non-current liabilities | 33,166 | 69,816 |
The other current and non-current payables mainly consist of put options over non-controlling interests totaling \u20ac81.6 million (2023: \u20ac171.1 million), and earnouts and deferred payments in connection with acquisitions. The decrease in 2024 is mainly attributable to settlement of put option liabilities (Note 21.7).
", "dimensions": { "concept": "ifrs-full:DisclosureOfEmployeeBenefitsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i6560-1": { "value": "The number of employees (FTE, including contingent workers) located in the regions is set out below:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| EMEA | 1,978 | 1,884 |
| Americas | 1,153 | 1,111 |
| Asia Pacific | 1,013 | 1,031 |
| Holdings | 177 | 180 |
| \u00a0 | 4,321 | 4,206 |
The Group is subject to the following defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| German companies | 606 | 640 |
| Belgian companies | 5,376 | 4,849 |
| French companies | 1,971 | 1,945 |
| Italian companies | 1,875 | 1,950 |
| UK companies | 4,850 | 5,653 |
| Other companies | 1,917 | 1,460 |
| Total present value of obligations | 16,594 | 16,497 |
| Fair value of plan assets | -10,727 | -12,795 |
| Amounts not recognized as asset due to asset ceiling | 410 | 2,345 |
| Recognized liability for defined benefit obligations | 6,277 | 6,047 |
| Liability for long-service leave and other employees' benefits | 7,605 | 7,590 |
| Total employee benefits recognized in the balance sheet | 13,882 | 13,637 |
The Group has defined benefit plans in place in Belgium (partly funded), France (unfunded), Italy (unfunded), United Kingdom (wholly funded), Germany (partly funded), Thailand (unfunded), Indonesia (unfunded), and the Philippines (unfunded).
The Group's net defined benefit obligation is based on the difference between the present values of the defined benefit obligations and the plan assets.
Both defined benefit plans and defined contribution plans are in place. Charges for defined contribution schemes amount to \u20ac3.8 million (2023: \u20ac4.2 million). Expenses for all plans are included in 'Wages, salaries and other personnel related expenses'.
The pension plans in place in Belgium are all legally structured as defined contribution plans but qualify as defined benefit plans due to their guaranteed minimum return, which exposes the employer to a financial risk; there is a legal obligation to pay further contributions if the fund does not hold sufficient assets to pay all employee benefits relating to employee service in the current and prior periods.
In the United Kingdom, the defined benefit pension plan is financed through the accumulation of plan assets held separately from those of the Group in an independently administered fund.
The actuarial calculations of the present value of defined benefit obligations were based on the following main assumptions:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| Discount rate | 2.84% - 7.1% | 3.2% - 6.3% |
| Inflation | 3.2% - 10.1% | 2.5% - 4.47% |
| Future pension increases | 0% - 6% | 0% - 6% |
| Future salary increases | 0% - 10% | 0% - 6% |
In the event that the discount rate would increase or decrease by 0.5%, the defined benefit obligation would decrease by \u20ac0.6 million or increase by \u20ac0.6 million, respectively.
The following table shows the changes in the present value of the defined benefit obligations:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Liability for defined benefit obligations at the beginning of period | 16,497 | 15,703 |
| Current service costs and interest | 1,966 | 809 |
| Benefits paid | -1,123 | 13 |
| Remeasurement arising from changes in demographic assumptions | 79 | -496 |
| Remeasurement arising from changes in financial assumptions | -359 | 228 |
| Remeasurement arising from experience | -593 | 202 |
| Business combination | 118 | 72 |
| Exchange rate differences | 9 | -34 |
| Liability for defined benefit obligations at 31 December | 16,594 | 16,497 |
The following table shows the changes in the plan assets:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Fair value of plan assets at the beginning of the period | 12,795 | 12,625 |
| Contributions paid into the plan | 501 | 822 |
| Benefits paid by the plan | -647 | -273 |
| Expected return on plan assets | 585 | -63 |
| Return on assets excluding amounts in net interests | -2,336 | -361 |
| Exchange rate differences | -171 | 45 |
| Fair value of plan assets at 31 December | 10,727 | 12,795 |
At year-end, the plan assets consisted mainly of equity instruments.
The net periodic cost for defined benefit obligations recognized in the income statement is shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Current service costs | -1,340 | -1,680 |
| Interest on obligation | -520 | -230 |
| Interest on assets | 585 | -63 |
| \u00a0 | -1,275 | -1,973 |
The changes in actuarial gains and losses from defined benefit obligations and plan assets recognized in other comprehensive income are shown in the following table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Return on assets, excluding amounts in net interests | -2,336 | -361 |
| Actuarial gains and losses on benefit obligations | 872 | 66 |
| Effect of changes in asset ceiling | 1,935 | 153 |
| Exchange rate differences | 188 | -36 |
| \u00a0 | 659 | -178 |
| (in thousands of \u20ac) | Tax Claims | Other provisions | Total |
|---|---|---|---|
| As of January 1 2023 | 2,997 | 5,144 | 8,141 |
| Business combination | 626 | 280 | 906 |
| Provisions made | 648 | 506 | 1,154 |
| Provisions used | -73 | -1,055 | -1,128 |
| Provisions released | -588 | -1,394 | -1,982 |
| Translation differences | -208 | -55 | -263 |
| As of December 31, 2023 | 3,402 | 3,426 | 6,828 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current | 2,226 | 932 | 3,158 |
| Current | 1,176 | 2,494 | 3,670 |
| Total provisions | 3,402 | 3,426 | 6,828 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of January 1 2024 | 3,402 | 3,426 | 6,828 |
| Business combination | 799 | - | 799 |
| Provisions made during the period | 237 | 1,011 | 1,248 |
| Provisions used during the period | -548 | -959 | -1,507 |
| Provisions released during the period | -1,311 | -799 | -2,110 |
| Translation differences | -216 | -40 | -256 |
| As of December 31, 2024 | 2,363 | 2,639 | 5,002 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current | 1,640 | 877 | 2,517 |
| Current | 723 | 1,764 | 2,487 |
| Total provisions | 2,363 | 2,641 | 5,004 |
The provisions relate to tax risks, administrative fines, labor, and commercial matters including claims and litigations, concerning the past and current activities of the Group companies.
", "dimensions": { "concept": "ifrs-full:DisclosureOfProvisionsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6849-1": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Distribution | 95,033 | 86,534 |
| Utilities, communication, insurance and administrative expenses | 50,400 | 51,356 |
| Commercial expenses | 11,616 | 10,489 |
| Professional service fees | 29,535 | 28,880 |
| Lease expenses | 1,833 | 449 |
| Other expenses | 27,229 | 14,618 |
| \u00a0 | 215,646 | 192,325 |
The professional services & other expenses of 2024 include \u20ac3.2 million (2023: \u20ac5.8 million) mainly regarding M&A activities.
Audit fees included under professional service fees in the below table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Audit fees | \u00a0 | \u00a0 |
| Total fees for the audit of the annual accounts | 2,693 | 2,098 |
| Total fees for audit by non-PWC companies | 703 | 645 |
| Non-audit fees paid to group auditor network | \u00a0 | \u00a0 |
| Total fees for other attestation | 453 | 512 |
| Total fees for other non-audit services (incl. tax) | 64 | 56 |
| \u00a0 | 3,914 | 3,311 |
In 2024, audit fees increased mainly due to audit requirements for the sustainability statement under CSRD.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherOperatingExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6849-3": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Distribution | 95,033 | 86,534 |
| Utilities, communication, insurance and administrative expenses | 50,400 | 51,356 |
| Commercial expenses | 11,616 | 10,489 |
| Professional service fees | 29,535 | 28,880 |
| Lease expenses | 1,833 | 449 |
| Other expenses | 27,229 | 14,618 |
| \u00a0 | 215,646 | 192,325 |
The professional services & other expenses of 2024 include \u20ac3.2 million (2023: \u20ac5.8 million) mainly regarding M&A activities.
Audit fees included under professional service fees in the below table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Audit fees | \u00a0 | \u00a0 |
| Total fees for the audit of the annual accounts | 2,693 | 2,098 |
| Total fees for audit by non-PWC companies | 703 | 645 |
| Non-audit fees paid to group auditor network | \u00a0 | \u00a0 |
| Total fees for other attestation | 453 | 512 |
| Total fees for other non-audit services (incl. tax) | 64 | 56 |
| \u00a0 | 3,914 | 3,311 |
In 2024, audit fees increased mainly due to audit requirements for the sustainability statement under CSRD.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGeneralAndAdministrativeExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i6886-1": { "value": "Audit fees included under professional service fees in the below table:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Audit fees | \u00a0 | \u00a0 |
| Total fees for the audit of the annual accounts | 2,693 | 2,098 |
| Total fees for audit by non-PWC companies | 703 | 645 |
| Non-audit fees paid to group auditor network | \u00a0 | \u00a0 |
| Total fees for other attestation | 453 | 512 |
| Total fees for other non-audit services (incl. tax) | 64 | 56 |
| \u00a0 | 3,914 | 3,311 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceCostExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6923-3": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6923-4": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
", "dimensions": { "concept": "ifrs-full:DisclosureOfFinanceIncomeExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6923-8": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6923-9": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6923-10": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Financial income | \u00a0 | \u00a0 |
| Interest income | 14,824 | 10,689 |
| Gains on financial instruments at FV through P&L | 32,451 | 6,663 |
| Other financial income | 1,101 | 321 |
| \u00a0 | 48,376 | 17,674 |
| Financial expenses | \u00a0 | \u00a0 |
| Interest expense on loans and borrowings | -97,770 | -92,805 |
| Interest lease commitments | -8,206 | -4,562 |
| Transaction costs for bank loans | -7,558 | -3,113 |
| Losses on changes in fair value of derivatives | -4,657 | -6,741 |
| Monetary loss on hyperinflation | -22,055 | -21,071 |
| Foreign exchange losses | -12,119 | -7,677 |
| Other financial expenses | -25,848 | -21,470 |
| \u00a0 | -178,213 | -157,439 |
The fair value adjustment on financial instruments relates to acquisition-related earnout liabilities and put options on non-controlling interests. The gain of \u20ac32.5 million is composed of \u20ac36.7 million gains and \u20ac4.3 million losses.
The fair value adjustment on derivatives relates mainly to the interest rate caps.
The monetary loss on hyperinflation relates to the translation of foreign exchange impact regarding Azelis' subsidiaries in Turkey. The majority of the loss relates to translation of their balance sheets, funded by equity mainly, with low exposure to cash and debt in local currencies. The translation-impact on the income statement is limited as operational activities are merely settled in hard currencies (USD, EUR).
The main impact of the application of hyperinflation accounting relates to intangible assets, property, plant and equipment and equity and is shown in note 15, 16 and in the statement of changes in equity, respectively.
The foreign exchange losses include unrealized translation of intercompany loans, mainly relating to non-EUR nominated loans to subsidiaries.
Other financial expenses primarily relate to factoring fees and other bank fees.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInterestIncomeExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6988-1": { "value": "The income tax expenses consist of:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Current period tax expense (-) / income | -78,110 | -78,013 |
| Adjustments to prior years income tax expense (-) / income | 257 | -1,419 |
| Provisions for tax risks | -45 | -38 |
| \u00a0 | -77,898 | -79,470 |
| Deferred tax income / loss (-) | 11,258 | 21,544 |
| Total income tax income / expense (-) | -66,640 | -57,926 |
Income tax expense consists primarily of income taxes for the current period and prior period of Group companies.
The differences between the taxable income related to the Belgian tax rate and the effective tax rate are reconciled as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Profit/loss (-) before tax | 256,108 | \u00a0 | 247,238 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income tax using the domestic corporation tax rate | -63,617 | -25% | -61,810 | -25% |
| Impact of tax in different jurisdictions with difference to domestic rate | 1,763 | 1% | 1,013 | 0% |
| Tax effect of income not subject to tax | 11,026 | 4% | 9,381 | 4% |
| Tax effect of expenses not deductible for tax purposes | -12,272 | -5% | -16,482 | -7% |
| Utilization of previously unrecognized tax losses | 109 | 0% | 1,622 | 1% |
| Tax effect of unrecognized current tax losses | -3,164 | -1% | -2,706 | -1% |
| Deferred tax assets on previously unrecognized tax losses | 4,330 | 2% | 15,707 | 6% |
| Adjustments on applicable tax rate | -819 | 0% | -2,505 | -1% |
| Adjustments to prior year income tax expense (income) | 257 | 0% | -2,739 | -1% |
| Pillar Two | -1,115 | 0% | 0 | 0% |
| Other | -3,138 | -1% | 593 | 0% |
| Total income tax income / expense (-) in income statement | -66,640 | -26.0% | -57,926 | -23.4% |
The effective tax rate 2024 has mainly been affected by:
Non-deductible expenses mainly driven by monetary loss on hyperinflation
Fair value adjustment on financial liabilities regarding acquisition-related earnout liabilities and put options on non-controlling interests
Recognition of deferred tax assets on previously unrecognized tax losses, based on the projection of future tax profits
Deferred tax assets and liabilities are attributable to the following:
| (in thousands of \u20ac) | 1 January | Business combinations | Income statement | OCI | Other | Translation differences | December 31 |
|---|---|---|---|---|---|---|---|
| Property, plant and equipment | -35,699 | -2,237 | 13,954 | - | - | 192 | -23,790 |
| Intangible assets | -255,071 | -14,097 | -385 | - | 65,234 | -4,390 | -208,708 |
| Inventories | 10,323 | 749 | -3,738 | - | -6,857 | -48 | 429 |
| Trade receivables | 5,636 | 589 | -1,454 | - | -2,985 | -92 | 1,694 |
| Loans and borrowings | 37,657 | 233 | -4,670 | 6,508 | -34,094 | -100 | 5,535 |
| Employee benefits | 6,343 | 54 | 489 | -165 | -5,510 | 144 | 1,355 |
| Provisions, derivatives and other items | 2,212 | - | 5,122 | - | -3,617 | 131 | 3,848 |
| Untaxed reserves | 76 | - | 32 | - | -38 | -3 | 67 |
| Tax value of loss carry-forwards | 25,910 | - | 1,908 | - | -12,133 | 82 | 15,766 |
| \u00a0 | -202,613 | -14,709 | 11,258 | 6,343 | - | -4,084 | -203,804 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Deferred Tax liability | -218,306 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -225,904 |
| Deferred Tax assets | 15,693 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 22,100 |
| \u00a0 | -202,613 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -203,804 |
Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible for the Group companies, management believes it is probable that the Group will realize the benefits of these deductible differences.
| (in thousands of \u20ac) | 1 January | Business combinations | Income statement | OCI | Other | Translation differences | December 31 |
|---|---|---|---|---|---|---|---|
| Property, plant and equipment | -2,640 | -6,123 | -2,787 | - | -27,305 | 3,156 | -35,699 |
| Intangible assets | -190,198 | -66,188 | -3,719 | - | 3,908 | 1,126 | -255,071 |
| Inventories | 9,589 | 5,445 | -4,432 | - | - | -279 | 10,323 |
| Trade receivables | 3,835 | 1,863 | 10 | - | - | -72 | 5,636 |
| Loans and borrowings | 1,792 | 5,133 | 6,486 | - | 27,305 | -3,059 | 37,657 |
| Employee benefits | 1,492 | 402 | 4,626 | -17 | - | -160 | 6,343 |
| Provisions, derivatives and other items | 714 | 123 | 1,473 | - | - | -98 | 2,212 |
| Untaxed reserves | 8,344 | - | -8,142 | - | - | -126 | 76 |
| Tax value of loss carry-forwards | -3,078 | 125 | 28,029 | - | - | 834 | 25,910 |
| \u00a0 | -170,150 | -59,220 | 21,544 | -17 | 3,908 | 1,322 | -202,613 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Deferred Tax liability | -190,755 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -218,306 |
| Deferred Tax assets | 20,605 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 15,693 |
| \u00a0 | -170,150 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -202,613 |
The following deferred tax assets related to compensable losses of Group companies have not been recognized:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Gross | Tax | Gross | Tax | |
| Tax losses | 41,324 | 10,331 | 75,321 | 18,830 |
Unrecognized carry forward losses of \u20ac37.0 million (2023: \u20ac69.8 million) can be used unlimited in time, and \u20ac4.3 million (2023: \u20ac5.6 million for period 2023-2037) need to be used until 2031.
No deferred tax assets have been recognized on these carry forward losses, due to the fact that they do not meet the recognition criteria for a deferred tax asset.
The Group may have unrecognized tax liabilities in respect of taxable temporary differences relating to the non-distributed reserves of one of its subsidiaries that would be taxed when distributed. No deferred tax liability has been recognized because the Group controls whether the liability will be incurred, and management is satisfied that the liability will not be incurred in the foreseeable future.
The Group is within the scope of the OECD Pillar Two model rules. In Belgium, the jurisdiction in which Azelis Group NV is incorporated, Pillar Two legislation has come into effect from January 1, 2024. Under the legislation, the parent company is liable to pay a top-up tax for the difference between the GloBE effective tax rate per jurisdiction and the 15% minimum rate for its subsidiaries that are taxed at a GloBE effective tax rate of less than 15%. The Group has a limited number of jurisdictions with an effective tax rate lower than 15%. As at December 31, 2024, \u20ac15.7 million of the Group\u2019s GloBE income is taxed at an average effective tax rate of 8.2% and is subject to the top-up tax. As of December 31, 2024, the Group has recognized in its corporate income tax expense a Pillar Two top-up tax expense for \u20ac1.1 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIncomeTaxExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i6988-3": { "value": "The income tax expenses consist of:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Current period tax expense (-) / income | -78,110 | -78,013 |
| Adjustments to prior years income tax expense (-) / income | 257 | -1,419 |
| Provisions for tax risks | -45 | -38 |
| \u00a0 | -77,898 | -79,470 |
| Deferred tax income / loss (-) | 11,258 | 21,544 |
| Total income tax income / expense (-) | -66,640 | -57,926 |
Income tax expense consists primarily of income taxes for the current period and prior period of Group companies.
The differences between the taxable income related to the Belgian tax rate and the effective tax rate are reconciled as follows:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Profit/loss (-) before tax | 256,108 | \u00a0 | 247,238 | \u00a0 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Income tax using the domestic corporation tax rate | -63,617 | -25% | -61,810 | -25% |
| Impact of tax in different jurisdictions with difference to domestic rate | 1,763 | 1% | 1,013 | 0% |
| Tax effect of income not subject to tax | 11,026 | 4% | 9,381 | 4% |
| Tax effect of expenses not deductible for tax purposes | -12,272 | -5% | -16,482 | -7% |
| Utilization of previously unrecognized tax losses | 109 | 0% | 1,622 | 1% |
| Tax effect of unrecognized current tax losses | -3,164 | -1% | -2,706 | -1% |
| Deferred tax assets on previously unrecognized tax losses | 4,330 | 2% | 15,707 | 6% |
| Adjustments on applicable tax rate | -819 | 0% | -2,505 | -1% |
| Adjustments to prior year income tax expense (income) | 257 | 0% | -2,739 | -1% |
| Pillar Two | -1,115 | 0% | 0 | 0% |
| Other | -3,138 | -1% | 593 | 0% |
| Total income tax income / expense (-) in income statement | -66,640 | -26.0% | -57,926 | -23.4% |
The effective tax rate 2024 has mainly been affected by:
Non-deductible expenses mainly driven by monetary loss on hyperinflation
Fair value adjustment on financial liabilities regarding acquisition-related earnout liabilities and put options on non-controlling interests
Recognition of deferred tax assets on previously unrecognized tax losses, based on the projection of future tax profits
Deferred tax assets and liabilities are attributable to the following:
| (in thousands of \u20ac) | 1 January | Business combinations | Income statement | OCI | Other | Translation differences | December 31 |
|---|---|---|---|---|---|---|---|
| Property, plant and equipment | -35,699 | -2,237 | 13,954 | - | - | 192 | -23,790 |
| Intangible assets | -255,071 | -14,097 | -385 | - | 65,234 | -4,390 | -208,708 |
| Inventories | 10,323 | 749 | -3,738 | - | -6,857 | -48 | 429 |
| Trade receivables | 5,636 | 589 | -1,454 | - | -2,985 | -92 | 1,694 |
| Loans and borrowings | 37,657 | 233 | -4,670 | 6,508 | -34,094 | -100 | 5,535 |
| Employee benefits | 6,343 | 54 | 489 | -165 | -5,510 | 144 | 1,355 |
| Provisions, derivatives and other items | 2,212 | - | 5,122 | - | -3,617 | 131 | 3,848 |
| Untaxed reserves | 76 | - | 32 | - | -38 | -3 | 67 |
| Tax value of loss carry-forwards | 25,910 | - | 1,908 | - | -12,133 | 82 | 15,766 |
| \u00a0 | -202,613 | -14,709 | 11,258 | 6,343 | - | -4,084 | -203,804 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Deferred Tax liability | -218,306 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -225,904 |
| Deferred Tax assets | 15,693 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 22,100 |
| \u00a0 | -202,613 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -203,804 |
Based upon the level of historical taxable income and projections for future taxable income over the periods in which the deferred tax assets are deductible for the Group companies, management believes it is probable that the Group will realize the benefits of these deductible differences.
| (in thousands of \u20ac) | 1 January | Business combinations | Income statement | OCI | Other | Translation differences | December 31 |
|---|---|---|---|---|---|---|---|
| Property, plant and equipment | -2,640 | -6,123 | -2,787 | - | -27,305 | 3,156 | -35,699 |
| Intangible assets | -190,198 | -66,188 | -3,719 | - | 3,908 | 1,126 | -255,071 |
| Inventories | 9,589 | 5,445 | -4,432 | - | - | -279 | 10,323 |
| Trade receivables | 3,835 | 1,863 | 10 | - | - | -72 | 5,636 |
| Loans and borrowings | 1,792 | 5,133 | 6,486 | - | 27,305 | -3,059 | 37,657 |
| Employee benefits | 1,492 | 402 | 4,626 | -17 | - | -160 | 6,343 |
| Provisions, derivatives and other items | 714 | 123 | 1,473 | - | - | -98 | 2,212 |
| Untaxed reserves | 8,344 | - | -8,142 | - | - | -126 | 76 |
| Tax value of loss carry-forwards | -3,078 | 125 | 28,029 | - | - | 834 | 25,910 |
| \u00a0 | -170,150 | -59,220 | 21,544 | -17 | 3,908 | 1,322 | -202,613 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Deferred Tax liability | -190,755 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -218,306 |
| Deferred Tax assets | 20,605 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | 15,693 |
| \u00a0 | -170,150 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | -202,613 |
The following deferred tax assets related to compensable losses of Group companies have not been recognized:
| (in thousands of \u20ac) | 2024 | 2023 | ||
|---|---|---|---|---|
| Gross | Tax | Gross | Tax | |
| Tax losses | 41,324 | 10,331 | 75,321 | 18,830 |
Unrecognized carry forward losses of \u20ac37.0 million (2023: \u20ac69.8 million) can be used unlimited in time, and \u20ac4.3 million (2023: \u20ac5.6 million for period 2023-2037) need to be used until 2031.
No deferred tax assets have been recognized on these carry forward losses, due to the fact that they do not meet the recognition criteria for a deferred tax asset.
The Group may have unrecognized tax liabilities in respect of taxable temporary differences relating to the non-distributed reserves of one of its subsidiaries that would be taxed when distributed. No deferred tax liability has been recognized because the Group controls whether the liability will be incurred, and management is satisfied that the liability will not be incurred in the foreseeable future.
The Group is within the scope of the OECD Pillar Two model rules. In Belgium, the jurisdiction in which Azelis Group NV is incorporated, Pillar Two legislation has come into effect from January 1, 2024. Under the legislation, the parent company is liable to pay a top-up tax for the difference between the GloBE effective tax rate per jurisdiction and the 15% minimum rate for its subsidiaries that are taxed at a GloBE effective tax rate of less than 15%. The Group has a limited number of jurisdictions with an effective tax rate lower than 15%. As at December 31, 2024, \u20ac15.7 million of the Group\u2019s GloBE income is taxed at an average effective tax rate of 8.2% and is subject to the top-up tax. As of December 31, 2024, the Group has recognized in its corporate income tax expense a Pillar Two top-up tax expense for \u20ac1.1 million.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDeferredTaxesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i7425-1": { "value": "| (in thousands of \u20ac) | Goodwill | Trademarks | Distribution rights | Concessions and licenses | Development costs | Customer lists | Other | Intangibles in progress | Total |
|---|---|---|---|---|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,174,256 | 317,378 | 964,516 | 8,159 | 7,738 | 5,670 | 26,372 | 5,371 | 3,509,462 |
| Accumulated amortization and impairment | - | - | -137,552 | -4,702 | -3,904 | -1,663 | -13,789 | -3,106 | -164,720 |
| \u00a0 | 2,174,256 | 317,378 | 826,964 | 3,456 | 3,834 | 4,007 | 12,583 | 2,265 | 3,344,742 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 256,106 | - | 246,125 | 30 | 35 | - | 6,271 | - | 508,567 |
| Additions | - | - | 1,086 | 73 | 1,284 | 567 | 1,667 | 5,490 | 10,166 |
| Amortization | - | - | -57,319 | -395 | -1,434 | -937 | -4,372 | - | -64,458 |
| Impairment charge | - | - | -1,662 | - | - | - | - | - | -1,662 |
| Disposals | - | - | - | - | - | 13 | -383 | 12 | -358 |
| Reclassifications | - | - | - | -15 | -4 | 508 | 911 | -1,224 | 177 |
| Hyperinflation | 19,627 | - | 12,419 | 2 | - | - | 36 | - | 32,083 |
| Translation differences | -40,738 | - | -29,657 | -90 | 1 | -370 | 68 | -87 | -70,873 |
| Changes in the Period | 234,995 | - | 170,993 | -395 | -118 | -220 | 4,198 | 4,191 | 413,642 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,409,251 | 317,378 | 1,194,490 | 8,159 | 9,054 | 6,387 | 34,942 | 9,562 | 3,989,224 |
| Accumulated amortization and impairment | - | - | -196,534 | -5,097 | -5,338 | -2,600 | -18,162 | -3,106 | -230,840 |
| \u00a0 | 2,409,251 | 317,378 | 997,956 | 3,061 | 3,716 | 3,786 | 16,780 | 6,456 | 3,758,384 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 73,560 | - | 76,613 | 178 | - | - | - | - | 150,350 |
| Additions | - | - | 1,094 | 42 | 1,269 | 17 | 435 | 6,612 | 9,469 |
| Amortization | - | - | -62,791 | -819 | -1,660 | -691 | -5,205 | - | -71,166 |
| Impairment charge | - | - | -1,567 | - | - | - | - | - | -1,567 |
| Disposals | 21 | - | - | -96 | -10 | - | 36 | -82 | -132 |
| Reclassifications | - | - | - | 2,011 | 4,139 | -1 | 6,038 | -11,683 | 505 |
| Hyperinflation | 23,036 | - | 13,276 | 1 | - | - | 30 | - | 36,344 |
| Translation differences | 30,976 | - | 14,905 | 160 | 139 | 77 | 104 | 77 | 46,438 |
| Changes in the Period | 127,593 | - | 41,528 | 1,476 | 3,878 | -598 | 1,439 | -5,076 | 170,241 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,536,844 | 317,378 | 1,300,377 | 10,453 | 14,592 | 6,480 | 41,586 | 4,486 | 4,232,198 |
| Accumulated amortization and impairment | - | - | -260,893 | -5,916 | -6,998 | -3,292 | -23,366 | -3,106 | -303,573 |
| \u00a0 | 2,536,844 | 317,378 | 1,039,484 | 4,538 | 7,594 | 3,189 | 18,219 | 1,380 | 3,928,625 |
The reclassifications relate mainly to internal project costs, which are recognized at year-end as intangibles.
The trademark relates to the Azelis name. Azelis uses its name globally, and its trade name is considered to be a key asset of its distribution activities given its status as a major distributor in the specialty chemicals sector. The name both supports the Group in onboarding principals and customers, and in acquiring companies that want to become part of the Group as they know that their business will grow being part of it. The Azelis trademark is estimated to have an indefinite economic life for amortization purposes; therefore, effectively no amortization expenses are being booked through Azelis' income statement. The total value of \u20ac317.4 million on December 31, 2024, originates entirely from the EQT/PSP acquisition in November 2018 and remained unchanged since that date.
The translation differences of \u20ac46.4 million gain (2023: \u20ac70.9 million loss) are recognized in other comprehensive income and accumulated in the translation reserve within equity. Reference is made to note 21.4.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purpose of impairment testing, goodwill is allocated to the following CGUs:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| EMEA | 843,470 | 782,687 |
| Americas | 1,295,037 | 1,251,715 |
| Asia Pacific | 398,337 | 374,849 |
| Total goodwill | 2,536,844 | 2,409,251 |
All goodwill acquired in the business combinations was allocated to a CGU at the end of the reporting period. Goodwill is allocated on a regional level as it is the Group's regions that are expected to benefit from the business combinations, and as goodwill is also monitored internally at regional level. The Group expects synergies to be realized in the region of acquisition.
Trademarks with a book value of \u20ac317.4 million (2023: \u20ac317.4 million) have an indefinite life. These do not generate cash inflows independently and qualify as corporate assets. As their carrying amount cannot be allocated to the CGUs on a reasonable and consistent basis, the corporate assets are allocated to the Group as a whole, and the impairment test is performed in two stages.
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
| (in thousands of \u20ac) | Land and buildings | Plant and equipment | Other | Total |
|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 32,491 | 15,193 | 30,403 | 78,086 |
| Accumulated depreciation and impairment | -4,144 | -4,877 | -11,182 | -20,203 |
| \u00a0 | 28,347 | 10,316 | 19,221 | 57,884 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 840 | 3,398 | 11,909 | 16,148 |
| Additions | 431 | 1,605 | 6,463 | 8,499 |
| Depreciation | -1,143 | -2,278 | -5,345 | -8,765 |
| Reversal of impairment | 3,311 | - | - | 3,311 |
| Disposals | -2,136 | -353 | 82 | -2,407 |
| Reclassifications | 47 | 65 | -223 | -111 |
| Hyperinflation | - | 2 | 129 | 131 |
| Translation differences | -752 | -9 | -351 | -1,112 |
| Changes in the Period | 598 | 2,430 | 12,664 | 15,693 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 30,921 | 19,901 | 48,412 | 99,234 |
| Accumulated depreciation and impairment | -1,976 | -7,154 | -16,526 | -25,657 |
| \u00a0 | 28,945 | 12,747 | 31,886 | 73,577 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 353 | 265 | 239 | 857 |
| Additions | 90 | 1,198 | 7,833 | 9,121 |
| Depreciation | -1,189 | -2,347 | -5,827 | -9,363 |
| Impairment | -284 | - | -30 | -314 |
| Disposals | -3,850 | -684 | -612 | -5,147 |
| Reclassifications | 27 | 1 | -889 | -861 |
| Hyperinflation | - | 9 | 36 | 46 |
| Translation differences | -265 | 56 | -1,644 | -1,853 |
| Changes in the Period | -5,118 | -1,502 | -894 | -7,514 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 27,276 | 20,746 | 53,375 | 101,397 |
| Accumulated depreciation and impairment | -3,449 | -9,501 | -22,383 | -35,334 |
| \u00a0 | 23,827 | 11,245 | 30,992 | 66,063 |
The category 'Other' mainly relates to leasehold improvements, comprising also an insignificant amount of assets under construction.
On December 31, 2024, the Group had not pledged any land and buildings, or plant and equipment as security for the bank loans (2023: zero). Other restrictions are mainly related to leasehold improvements and leased machinery.
The right of use assets mainly relates to rental agreements for offices, warehouses, and cars.
| (in thousands of \u20ac) | Land and buildings | Other | Total |
|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 130,385 | 27,642 | 158,027 |
| Accumulated depreciation and impairment | -42,829 | -18,215 | -61,045 |
| \u00a0 | 87,555 | 9,426 | 96,982 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 16,174 | 1,796 | 17,971 |
| Additions | 19,432 | 9,776 | 29,209 |
| Depreciation | -19,357 | -5,950 | -25,307 |
| Disposals | -1,309 | -98 | -1,407 |
| Remeasurements | 6,212 | 1,273 | 7,485 |
| Hyperinflation | 3,566 | -188 | 3,378 |
| Translation differences | -4,775 | -487 | -5,262 |
| Changes in the Period | 19,945 | 6,122 | 26,066 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 169,686 | 39,714 | 209,399 |
| Accumulated depreciation and impairment | -62,186 | -24,166 | -86,352 |
| \u00a0 | 107,500 | 15,548 | 123,048 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 817 | 164 | 981 |
| Additions | 56,851 | 10,543 | 67,394 |
| Depreciation | -24,958 | -7,134 | -32,092 |
| Remeasurements | 8,743 | 417 | 9,159 |
| Hyperinflation | 3,011 | 257 | 3,268 |
| Translation differences | -621 | -93 | -714 |
| Changes in the Period | 34,799 | 3,699 | 38,498 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 229,443 | 50,547 | 279,990 |
| Accumulated depreciation and impairment | -87,144 | -31,300 | -118,444 |
| \u00a0 | 142,299 | 19,247 | 161,546 |
Remeasurements mainly relate to the prolongation of the lease period of existing contracts.
The Group has lease contracts that have not yet commenced as of December 31, 2024 with future lease payments of around \u20ac4.4 million (2023: \u20ac82.2 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfDepreciationAndAmortisationExpenseExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i7425-2": { "value": "| (in thousands of \u20ac) | Goodwill | Trademarks | Distribution rights | Concessions and licenses | Development costs | Customer lists | Other | Intangibles in progress | Total |
|---|---|---|---|---|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,174,256 | 317,378 | 964,516 | 8,159 | 7,738 | 5,670 | 26,372 | 5,371 | 3,509,462 |
| Accumulated amortization and impairment | - | - | -137,552 | -4,702 | -3,904 | -1,663 | -13,789 | -3,106 | -164,720 |
| \u00a0 | 2,174,256 | 317,378 | 826,964 | 3,456 | 3,834 | 4,007 | 12,583 | 2,265 | 3,344,742 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 256,106 | - | 246,125 | 30 | 35 | - | 6,271 | - | 508,567 |
| Additions | - | - | 1,086 | 73 | 1,284 | 567 | 1,667 | 5,490 | 10,166 |
| Amortization | - | - | -57,319 | -395 | -1,434 | -937 | -4,372 | - | -64,458 |
| Impairment charge | - | - | -1,662 | - | - | - | - | - | -1,662 |
| Disposals | - | - | - | - | - | 13 | -383 | 12 | -358 |
| Reclassifications | - | - | - | -15 | -4 | 508 | 911 | -1,224 | 177 |
| Hyperinflation | 19,627 | - | 12,419 | 2 | - | - | 36 | - | 32,083 |
| Translation differences | -40,738 | - | -29,657 | -90 | 1 | -370 | 68 | -87 | -70,873 |
| Changes in the Period | 234,995 | - | 170,993 | -395 | -118 | -220 | 4,198 | 4,191 | 413,642 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,409,251 | 317,378 | 1,194,490 | 8,159 | 9,054 | 6,387 | 34,942 | 9,562 | 3,989,224 |
| Accumulated amortization and impairment | - | - | -196,534 | -5,097 | -5,338 | -2,600 | -18,162 | -3,106 | -230,840 |
| \u00a0 | 2,409,251 | 317,378 | 997,956 | 3,061 | 3,716 | 3,786 | 16,780 | 6,456 | 3,758,384 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 73,560 | - | 76,613 | 178 | - | - | - | - | 150,350 |
| Additions | - | - | 1,094 | 42 | 1,269 | 17 | 435 | 6,612 | 9,469 |
| Amortization | - | - | -62,791 | -819 | -1,660 | -691 | -5,205 | - | -71,166 |
| Impairment charge | - | - | -1,567 | - | - | - | - | - | -1,567 |
| Disposals | 21 | - | - | -96 | -10 | - | 36 | -82 | -132 |
| Reclassifications | - | - | - | 2,011 | 4,139 | -1 | 6,038 | -11,683 | 505 |
| Hyperinflation | 23,036 | - | 13,276 | 1 | - | - | 30 | - | 36,344 |
| Translation differences | 30,976 | - | 14,905 | 160 | 139 | 77 | 104 | 77 | 46,438 |
| Changes in the Period | 127,593 | - | 41,528 | 1,476 | 3,878 | -598 | 1,439 | -5,076 | 170,241 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,536,844 | 317,378 | 1,300,377 | 10,453 | 14,592 | 6,480 | 41,586 | 4,486 | 4,232,198 |
| Accumulated amortization and impairment | - | - | -260,893 | -5,916 | -6,998 | -3,292 | -23,366 | -3,106 | -303,573 |
| \u00a0 | 2,536,844 | 317,378 | 1,039,484 | 4,538 | 7,594 | 3,189 | 18,219 | 1,380 | 3,928,625 |
The reclassifications relate mainly to internal project costs, which are recognized at year-end as intangibles.
The trademark relates to the Azelis name. Azelis uses its name globally, and its trade name is considered to be a key asset of its distribution activities given its status as a major distributor in the specialty chemicals sector. The name both supports the Group in onboarding principals and customers, and in acquiring companies that want to become part of the Group as they know that their business will grow being part of it. The Azelis trademark is estimated to have an indefinite economic life for amortization purposes; therefore, effectively no amortization expenses are being booked through Azelis' income statement. The total value of \u20ac317.4 million on December 31, 2024, originates entirely from the EQT/PSP acquisition in November 2018 and remained unchanged since that date.
The translation differences of \u20ac46.4 million gain (2023: \u20ac70.9 million loss) are recognized in other comprehensive income and accumulated in the translation reserve within equity. Reference is made to note 21.4.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purpose of impairment testing, goodwill is allocated to the following CGUs:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| EMEA | 843,470 | 782,687 |
| Americas | 1,295,037 | 1,251,715 |
| Asia Pacific | 398,337 | 374,849 |
| Total goodwill | 2,536,844 | 2,409,251 |
All goodwill acquired in the business combinations was allocated to a CGU at the end of the reporting period. Goodwill is allocated on a regional level as it is the Group's regions that are expected to benefit from the business combinations, and as goodwill is also monitored internally at regional level. The Group expects synergies to be realized in the region of acquisition.
Trademarks with a book value of \u20ac317.4 million (2023: \u20ac317.4 million) have an indefinite life. These do not generate cash inflows independently and qualify as corporate assets. As their carrying amount cannot be allocated to the CGUs on a reasonable and consistent basis, the corporate assets are allocated to the Group as a whole, and the impairment test is performed in two stages.
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
", "dimensions": { "concept": "ifrs-full:DisclosureOfGoodwillExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i7425-4": { "value": "| (in thousands of \u20ac) | Goodwill | Trademarks | Distribution rights | Concessions and licenses | Development costs | Customer lists | Other | Intangibles in progress | Total |
|---|---|---|---|---|---|---|---|---|---|
| As of December 31, 2022 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,174,256 | 317,378 | 964,516 | 8,159 | 7,738 | 5,670 | 26,372 | 5,371 | 3,509,462 |
| Accumulated amortization and impairment | - | - | -137,552 | -4,702 | -3,904 | -1,663 | -13,789 | -3,106 | -164,720 |
| \u00a0 | 2,174,256 | 317,378 | 826,964 | 3,456 | 3,834 | 4,007 | 12,583 | 2,265 | 3,344,742 |
| Changes in 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 256,106 | - | 246,125 | 30 | 35 | - | 6,271 | - | 508,567 |
| Additions | - | - | 1,086 | 73 | 1,284 | 567 | 1,667 | 5,490 | 10,166 |
| Amortization | - | - | -57,319 | -395 | -1,434 | -937 | -4,372 | - | -64,458 |
| Impairment charge | - | - | -1,662 | - | - | - | - | - | -1,662 |
| Disposals | - | - | - | - | - | 13 | -383 | 12 | -358 |
| Reclassifications | - | - | - | -15 | -4 | 508 | 911 | -1,224 | 177 |
| Hyperinflation | 19,627 | - | 12,419 | 2 | - | - | 36 | - | 32,083 |
| Translation differences | -40,738 | - | -29,657 | -90 | 1 | -370 | 68 | -87 | -70,873 |
| Changes in the Period | 234,995 | - | 170,993 | -395 | -118 | -220 | 4,198 | 4,191 | 413,642 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2023 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,409,251 | 317,378 | 1,194,490 | 8,159 | 9,054 | 6,387 | 34,942 | 9,562 | 3,989,224 |
| Accumulated amortization and impairment | - | - | -196,534 | -5,097 | -5,338 | -2,600 | -18,162 | -3,106 | -230,840 |
| \u00a0 | 2,409,251 | 317,378 | 997,956 | 3,061 | 3,716 | 3,786 | 16,780 | 6,456 | 3,758,384 |
| Changes in 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Business combination | 73,560 | - | 76,613 | 178 | - | - | - | - | 150,350 |
| Additions | - | - | 1,094 | 42 | 1,269 | 17 | 435 | 6,612 | 9,469 |
| Amortization | - | - | -62,791 | -819 | -1,660 | -691 | -5,205 | - | -71,166 |
| Impairment charge | - | - | -1,567 | - | - | - | - | - | -1,567 |
| Disposals | 21 | - | - | -96 | -10 | - | 36 | -82 | -132 |
| Reclassifications | - | - | - | 2,011 | 4,139 | -1 | 6,038 | -11,683 | 505 |
| Hyperinflation | 23,036 | - | 13,276 | 1 | - | - | 30 | - | 36,344 |
| Translation differences | 30,976 | - | 14,905 | 160 | 139 | 77 | 104 | 77 | 46,438 |
| Changes in the Period | 127,593 | - | 41,528 | 1,476 | 3,878 | -598 | 1,439 | -5,076 | 170,241 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of December 31, 2024 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Cost | 2,536,844 | 317,378 | 1,300,377 | 10,453 | 14,592 | 6,480 | 41,586 | 4,486 | 4,232,198 |
| Accumulated amortization and impairment | - | - | -260,893 | -5,916 | -6,998 | -3,292 | -23,366 | -3,106 | -303,573 |
| \u00a0 | 2,536,844 | 317,378 | 1,039,484 | 4,538 | 7,594 | 3,189 | 18,219 | 1,380 | 3,928,625 |
The reclassifications relate mainly to internal project costs, which are recognized at year-end as intangibles.
The trademark relates to the Azelis name. Azelis uses its name globally, and its trade name is considered to be a key asset of its distribution activities given its status as a major distributor in the specialty chemicals sector. The name both supports the Group in onboarding principals and customers, and in acquiring companies that want to become part of the Group as they know that their business will grow being part of it. The Azelis trademark is estimated to have an indefinite economic life for amortization purposes; therefore, effectively no amortization expenses are being booked through Azelis' income statement. The total value of \u20ac317.4 million on December 31, 2024, originates entirely from the EQT/PSP acquisition in November 2018 and remained unchanged since that date.
The translation differences of \u20ac46.4 million gain (2023: \u20ac70.9 million loss) are recognized in other comprehensive income and accumulated in the translation reserve within equity. Reference is made to note 21.4.
A cash-generating unit (CGU) is the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets. For the purpose of impairment testing, goodwill is allocated to the following CGUs:
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| EMEA | 843,470 | 782,687 |
| Americas | 1,295,037 | 1,251,715 |
| Asia Pacific | 398,337 | 374,849 |
| Total goodwill | 2,536,844 | 2,409,251 |
All goodwill acquired in the business combinations was allocated to a CGU at the end of the reporting period. Goodwill is allocated on a regional level as it is the Group's regions that are expected to benefit from the business combinations, and as goodwill is also monitored internally at regional level. The Group expects synergies to be realized in the region of acquisition.
Trademarks with a book value of \u20ac317.4 million (2023: \u20ac317.4 million) have an indefinite life. These do not generate cash inflows independently and qualify as corporate assets. As their carrying amount cannot be allocated to the CGUs on a reasonable and consistent basis, the corporate assets are allocated to the Group as a whole, and the impairment test is performed in two stages.
The impairment tests have been performed by discounting future pre-tax cash flows from continuing operations of the unit. The recoverable amounts of the CGU's on December 31, 2024, have been determined based on a value in use calculation using cash flow projections from a five-year detailed business plan, which is approved by senior management and serves as a basis to determine the future free cash flows and the Adjusted EBITAs. The business plan is based on the market growth assumptions and on some general economic indicators (inflation, GDP, etc.). It also properly reflects the future strategy of the CGUs. For cash flows beyond the business plan period, an extrapolation was made based on steady terminal growth rates.
The key assumptions used in the impairment tests are the pre-tax WACC, terminal growth rate, and Adjusted EBITA margin. The pre-tax WACC is estimated per CGU based on a weighing of the countries' WACCs and is consistent with external sources of information. The terminal growth rates are based on industry benchmarks by region and are consistent with the Group's past experience and based on external sources of information. Adjusted EBITA margin reflects the Group's past experience and future expectation of regional business development.
The key assumptions used for the second stage impairment test, at the level of the Group as a whole including corporate assets, are identical to those used for the CGU impairment tests.
The values attributed to pre-tax WACC and the growth rates are as follows:
| Cash Generating Unit | 2024 | 2025-2029 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 11.9% | 2.7% | 12.58% - 14.15% |
| Americas | 12.9% | 2.5% | 12.45% - 14.21% |
| Asia Pacific | 11.1% | 3.9% | 9.49% - 11.63% |
| Cash Generating Unit | 2023 | 2024-2028 assumptions | |
|---|---|---|---|
| \u00a0 | Pre-tax WACC | Growth rate for terminal value | EBITA % |
| EMEA | 13.5% | 3.3% | 12,7% - 13,0% |
| Americas | 13.4% | 2.7% | 11,7% - 13,1% |
| Asia Pacific | 12.0% | 5.1% | 8,7% - 9,3% |
The impairment tests on the recoverable amount of CGUs show sufficient headroom on the carrying amount of goodwill. In the second stage impairment test, the recoverable amount of the CGUs considered as a whole exceeds the carrying amount of the CGUs including the carrying amount of the corporate assets.
In order to test the resilience of the headroom against changes in key assumptions, Azelis has selected reasonably expectable changes in the assumptions as follows:
A WACC increase by 1%
A decrease of the growth rate in the terminal value by 1%
A decrease of Adjusted EBITA margin by 0.5%
In each of the above independent scenarios and for each CGU, the sensitivity test shows sufficient headroom on the carrying amount of goodwill.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIntangibleAssetsAndGoodwillExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i8129-1": { "value": "On December 31, 2024, the Group had not pledged any land and buildings, or plant and equipment as security for the bank loans (2023: zero). Other restrictions are mainly related to leasehold improvements and leased machinery.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCollateralExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8296-1": { "value": "Azelis holds a 50% investment in Chemlog S.A.S. (refer to note 26.4). Chemlog's aggregated figures are presented as follows:
| (in thousands of \u20ac) | Assets | Liabilities | Equity | Revenue | Net result for the period |
|---|---|---|---|---|---|
| 31 December 2024 | 949 | 441 | 508 | 1,881 | 28 |
| 31 December 2023 | 974 | 393 | 581 | 1,925 | 111 |
The Group has a related party relationship with certain of its subsidiaries, shareholders, managers, executive officers, and associates. The Group has one minor investment in associates, see note 17.
", "dimensions": { "concept": "ifrs-full:DisclosureOfSignificantInvestmentsInAssociatesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8296-2": { "value": "Azelis holds a 50% investment in Chemlog S.A.S. (refer to note 26.4). Chemlog's aggregated figures are presented as follows:
| (in thousands of \u20ac) | Assets | Liabilities | Equity | Revenue | Net result for the period |
|---|---|---|---|---|---|
| 31 December 2024 | 949 | 441 | 508 | 1,881 | 28 |
| 31 December 2023 | 974 | 393 | 581 | 1,925 | 111 |
Non-controlling interests reflect the share of equity ownership in the Group's subsidiaries that is not owned by the Group, even though those subsidiaries are consolidated in the Group's consolidated financial statements. Ashapura Aromas (India), Vogler Ingredients (Brazil) and Azelis South Africa (South Africa) are the main contributors for the non-controlling interests. Refer also to note 26.4.
In 2024, the Group acquired the full non-controlling interests in Catalite (Thailand), MKVN Chemicals (Vietnam), Viet Chemicals Trading (Vietnam), Asia Primera Kimika (Philippines), Phil-Asiatic Supply & Services (Philippines) and part of the non-controlling interest in Vogler Ingredients (Brazil) by settling the related put option redemption liabilities.
The following table lists the Group\u2019s subsidiaries:
| Name | Country of incorporation | Type | % of interest 2024 | % of interest 2023 |
|---|---|---|---|---|
| Consolidated companies | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Group NV | Belgium | Non-operating | Parent company | Parent company |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Direct Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Finance NV | Belgium | Non-operating | 100 | 100 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Orkila Alg\u00e9rie spa | Algeria | Operating | 100 | 100 |
| Agspec Australia Pty Ltd | Australia | Operating | 100 | 0 |
| Azelis Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Chemcolour Industries Australia Pty Ltd | Australia | Operating | 100 | 100 |
| TimTechChem Australia Pty Ltd | Australia | Operating | 100 | 100 |
| EB1 Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Specialties Pty Limited | Australia | Operating | 100 | 100 |
| Elle Bee Exports Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Pty Ltd | Australia | Operating | 100 | 100 |
| Chemiplas Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Azelis Austria GmbH | Austria | Operating | 100 | 100 |
| Azelis Benelux N.V. | Belgium | Operating | 100 | 100 |
| Azelis EMEA Hub NV | Belgium | Operating | 100 | 100 |
| Azelis Products International SA | Belgium | Operating | 100 | 100 |
| Azelis Brasil Ltda | Brazil | Operating | 100 | 100 |
| Viveiruz Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 40 | 20 |
| Ybiap\u00ea Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 100 | 100 |
| Vogler Ingredientes Ltda. | Brazil | Operating | 70 | 60 |
| Azelis Bulgaria EAD | Bulgaria | Operating | 100 | 100 |
| Azelis Canada Inc. | Canada | Operating | 100 | 100 |
| Azelis China Ltd | China | Operating | 100 | 100 |
| Azelis (Shanghai) Co. Ltd. | China | Operating | 100 | 100 |
| Azelis (Shanghai) International Trading Co., Ltd | China | Operating | 100 | 100 |
| Azelis Hong Kong Ltd | China | Operating | 100 | 100 |
| CosBond China Ltd | China | Operating | 100 | 100 |
| CosBond (Shanghai) International Trading Co. Ltd | China | Operating | 100 | 100 |
| Azelis Trading Ltd | China | Operating | 100 | 100 |
| Danxia Trading (Shanghai) Co, Ltd | China | Operating | 100 | 100 |
| Guangzhou Danxia Trading Co, Ltd | China | Operating | 100 | 100 |
| Azelis Industrial Chemical Ltd | China | Operating | 100 | 100 |
| Azelis Chemical (Guangzhou) Co. Ltd | China | Operating | 100 | 100 |
| Danxia Tianjin Co. Ltd | China | Operating | 100 | 100 |
| Danxia Shanghai Co. Ltd | China | Operating | Dissolved | 100 |
| Rocsa Colombia S.A. | Colombia | Operating | 100 | 63 |
| CI Inproquim Exports SAS | Colombia | Operating | Dissolved | 63 |
| Localpack S.A. | Colombia | Operating | 100 | 0 |
| Rocsa DCR SA | Costa Rica | Operating | 100 | 63 |
| Soluciones en Innovacion Famaceutica S A S | Colombia | Operating | 100 | 0 |
| Azelis Croatia D.O.O. | Croatia | Operating | 100 | 100 |
| Azelis CEE Holding A.S. | Czech Republic | Operating | 100 | 100 |
| Azelis Czech Republic S.R.O. | Czech Republic | Operating | 100 | 100 |
| Azelis Denmark A/S | Denmark | Operating | 100 | 100 |
| Rocsa RD SA | Dominican Republic | Operating | 100 | 63 |
| Orkila Egypt Chemicals SAE | Egypt | Operating | 99 | 99 |
| Orchem for Import and Export LLC | Egypt | Operating | 49 | 49 |
| Azelis Finland OY | Finland | Operating | 100 | 100 |
| Haarla Oy | Finland | Operating | 100 | 0 |
| Azelis France S.A.S | France | Operating | 100 | 100 |
| Azelis France Holding S.A.S | France | Operating | 100 | 100 |
| BLH SAS | France | Operating | 100 | 100 |
| NATSOE SAS | France | Operating | Merged | 100 |
| Azelis Deutschland GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Holding GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Immobilien GmbH1 | Germany | Operating | Merged | 100 |
| Azelis Deutschland Kosmetik GmbH1 | Germany | Operating | 90 | 90 |
| Azelis Chemicals Ghana Ltd | Ghana | Operating | 100 | 100 |
| Azelis Greece Single Member SA | Greece | Operating | 100 | 100 |
| Rocsa GT SA | Guatemala | Operating | 100 | 63 |
| Azelis Hungary Kft. | Hungary | Operating | 100 | 100 |
| Azelis India Private Ltd | India | Operating | 100 | 100 |
| Ashapura Aromas Private Limited | India | Operating | 70 | 70 |
| PT Azelis Indonesia Distribusi | Indonesia | Operating | 100 | 100 |
| PT Marga Dwi Kencana | Indonesia | Operating | 100 | 0 |
| Azelis Ireland Ltd. | Ireland | Operating | 100 | 100 |
| Azelis Israel Distribution Ltd | Israel | Operating | 100 | 100 |
| Lidorr Elements Ltd; | Israel | Operating | 100 | 100 |
| ProAgro Ltd; | Israel | Operating | 100 | 100 |
| Liad Agro Ltd; | Israel | Operating | 100 | 100 |
| Darbal Ltd. | Israel | Operating | 100 | 100 |
| Azelis Italia Logistica S.r.L | Italy | Operating | 100 | 100 |
| Azelis Italia S.r.L | Italy | Operating | 100 | 100 |
| Eurotrading SpA | Italy | Operating | 100 | 100 |
| Azelis C\u00f4te d'Ivoire S.A. | Ivory Coast | Operating | 100 | 100 |
| Azelis Japan K.K. | Japan | Operating | 100 | 100 |
| Azelis Jordan LLC | Jordan | Operating | 50 | 50 |
| Azelis Kenya Ltd | Kenya | Operating | 100 | 100 |
| Azelis Korea Co. Ltd | Korea | Operating | 100 | 100 |
| Azelis Middle East Africa Holding SAL | Lebanon | Operating | 100 | 100 |
| Azelis Lebanon SAL | Lebanon | Operating | 100 | 100 |
| Azelis International (Offshore) SAL | Lebanon | Operating | 100 | 100 |
| Chempart Polymers SAL Offshore | Lebanon | Operating | 100 | 100 |
| Chemical Partners Middle East SAL | Lebanon | Operating | 100 | 100 |
| Akita Topco S.\u00e0 r.l. | Luxembourg | Non-operating | 100 | 100 |
| Azelis S.A. | Luxembourg | Non-operating | 100 | 100 |
| Azelis Malaysia Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Chemical Solutions Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Azelis Mexico SA de CV | Mexico | Operating | 100 | 100 |
| Azelis Morocco Sarl | Morocco | Operating | 100 | 100 |
| Orkila Invest SA | Morocco | Operating | 100 | 100 |
| Azelis Netherlands B.V. | Netherlands | Operating | 100 | 100 |
| Sirius International Detergents B.V. | Netherlands | Operating | Merged | 100 |
| Sirius International Water Treatment B.V. | Netherlands | Operating | Merged | 100 |
| Azelis Nigeria Specialty Chemicals Ltd | Nigeria | Operating | 100 | 100 |
| Azelis Norway AS | Norway | Operating | 100 | 100 |
| Azelis New Zealand Ltd | New Zealand | Operating | 100 | 100 |
| Chemiplas Agencies Ltd | New Zealand | Operating | Merged | 100 |
| Chemiplas (N.Z.) Ltd | New Zealand | Operating | Merged | 100 |
| Element Trading SAC | Peru | Operating | 100 | 63 |
| Asia Primera Kimika Inc. | Philippines | Operating | 100 | 51 |
| Phil-Asiatic Supply & Services Inc. | Philippines | Operating | 100 | 51 |
| Azelis Poland SP Z.o.o | Poland | Operating | 100 | 100 |
| Hortimex Sp. Z.o.o. | Poland | Operating | 100 | 0 |
| Azelis Romania SRL | Romania | Operating | 100 | 100 |
| Azelis Rus LLC | Russia | Operating | 100 | 100 |
| Azelis Arabia LLC | Saudi Arabia | Operating | 75 | 75 |
| Azelis Senegal SA | Senegal | Operating | 100 | 100 |
| Azelis d.o.o Beograd | Serbia | Operating | 100 | 100 |
| Azelis Singapore Pte. Ltd | Singapore | Operating | 100 | 100 |
| Bellekimia Singapore Pte. Ltd. | Singapore | Operating | 100 | 51 |
| Azelis Slovakia S.R.O. | Slovakia | Operating | 100 | 100 |
| Azelis South Africa Holding (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Azelis South Africa (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Orbichem Petrochemicals (Pty) Ltd | South Africa | Operating | 85 | 85 |
| CPS Chemical (Coatings) (Pty) Ltd | South Africa | Operating | 85 | 0 |
| Azelis Espa\u00f1a S.A. | Spain | Operating | 100 | 100 |
| Azelis Iberica Holding SL. | Spain | Operating | 100 | 100 |
| Azelis Espana Holding SL | Spain | Operating | 100 | 100 |
| Azelis Sweden AB | Sweden | Operating | 100 | 100 |
| Azelis Switzerland AG | Switzerland | Operating | 100 | 100 |
| Azelis Thailand Ltd | Thailand | Operating | 100 | 100 |
| Catalite Co. Ltd | Thailand | Operating | 100 | 51 |
| Azelis Tunisie Sarl | Tunisia | Operating | 100 | 100 |
| Azelis TR Kimya End. Ur.Ith.Ihr.Tic ve San A.S. | Turkey | Operating | 100 | 100 |
| Oktrade Kimya Sanayi ve Ticaret Anonim \u015eirketi | Turkey | Operating | Merged | 0 |
| Da\u011falt\u0131 Kau\u00e7uk ve K\u0130myev\u0130 Maddeler Sanay\u0130 T\u0130caret Anon\u0130m \u015e\u0130rket\u0130 | Turkey | Operating | Merged | 100 |
| Azelis Ukraine LLC | Ukraine | Operating | 100 | 100 |
| Orkila FZE | United Arabic Emirates | Operating | 100 | 100 |
| Azelis UK Holdings Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Finance Ltd | United Kingdom | Operating | 100 | 100 |
| Whitfield Chemical Group Ltd | United Kingdom | Operating | Dissolved | 100 |
| Whitfield Chemical Holdings Ltd | United Kingdom | Operating | Dissolved | 100 |
| WhitChem Ltd | United Kingdom | Operating | Dissolved | 100 |
| ADAPCO LLC | United States | Operating | 100 | 100 |
| Azelis Americas LLC | United States | Operating | 100 | 100 |
| Azelis US Holding Inc. | United States | Operating | 100 | 100 |
| Dewolf Chemical LLC | United States | Operating | 100 | 100 |
| Glenn LLC | United States | Operating | 100 | 100 |
| P.T. Hutchins Company LLC | United States | Operating | 100 | 100 |
| Marcor Development LLC | United States | Operating | 100 | 100 |
| Monson Companies LLC | United States | Operating | 100 | 100 |
| Precision Control Technology LLC | United States | Operating | 100 | 100 |
| Azelis Americas Case LLC | United States | Operating | 100 | 100 |
| Red River Specialties LLC | United States | Operating | 100 | 100 |
| C.L. Zimmerman Co. of Delaware LLC | United States | Operating | 100 | 100 |
| Ross Organic Specialty Sales Inc. | United States | Operating | 100 | 100 |
| Vigon International LLC | United States | Operating | 100 | 100 |
| Gillco Products, LCC | United States | Operating | 100 | 100 |
| Azelis Vietnam Company Ltd | Vietnam | Operating | 100 | 100 |
| MKVN Chemicals Co, Ltd | Vietnam | Operating | 100 | 51 |
| Viet Chemicals Trading and Service Company Limited | Vietnam | Operating | 100 | 51 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Companies accounted for using the equity method | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Chemlog S.A.S. | France | N/A | 50 | 50 |
Azelis holds a 50% investment in Chemlog S.A.S. (refer to note 26.4). Chemlog's aggregated figures are presented as follows:
| (in thousands of \u20ac) | Assets | Liabilities | Equity | Revenue | Net result for the period |
|---|---|---|---|---|---|
| 31 December 2024 | 949 | 441 | 508 | 1,881 | 28 |
| 31 December 2023 | 974 | 393 | 581 | 1,925 | 111 |
Azelis holds a 50% investment in Chemlog S.A.S. (refer to note 26.4). Chemlog's aggregated figures are presented as follows:
| (in thousands of \u20ac) | Assets | Liabilities | Equity | Revenue | Net result for the period |
|---|---|---|---|---|---|
| 31 December 2024 | 949 | 441 | 508 | 1,881 | 28 |
| 31 December 2023 | 974 | 393 | 581 | 1,925 | 111 |
The Group has a related party relationship with certain of its subsidiaries, shareholders, managers, executive officers, and associates. The Group has one minor investment in associates, see note 17.
As of December 31, 2024 (and 2023), there are no significant outstanding loans to or from related parties.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Board members (non-executive) | 367 | 350 |
| Other members of key management personnel | \u00a0 | \u00a0 |
| Fixed remuneration | 2,811 | 2,818 |
| Variable remuneration | 1,670 | 1,340 |
| \u00a0 | 4,848 | 4,508 |
Post-employment benefits: Details of the transactions between the Group and its pension plans are disclosed in Note 11.
The following table lists the Group\u2019s subsidiaries:
| Name | Country of incorporation | Type | % of interest 2024 | % of interest 2023 |
|---|---|---|---|---|
| Consolidated companies | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Group NV | Belgium | Non-operating | Parent company | Parent company |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Direct Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Finance NV | Belgium | Non-operating | 100 | 100 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Orkila Alg\u00e9rie spa | Algeria | Operating | 100 | 100 |
| Agspec Australia Pty Ltd | Australia | Operating | 100 | 0 |
| Azelis Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Chemcolour Industries Australia Pty Ltd | Australia | Operating | 100 | 100 |
| TimTechChem Australia Pty Ltd | Australia | Operating | 100 | 100 |
| EB1 Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Specialties Pty Limited | Australia | Operating | 100 | 100 |
| Elle Bee Exports Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Pty Ltd | Australia | Operating | 100 | 100 |
| Chemiplas Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Azelis Austria GmbH | Austria | Operating | 100 | 100 |
| Azelis Benelux N.V. | Belgium | Operating | 100 | 100 |
| Azelis EMEA Hub NV | Belgium | Operating | 100 | 100 |
| Azelis Products International SA | Belgium | Operating | 100 | 100 |
| Azelis Brasil Ltda | Brazil | Operating | 100 | 100 |
| Viveiruz Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 40 | 20 |
| Ybiap\u00ea Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 100 | 100 |
| Vogler Ingredientes Ltda. | Brazil | Operating | 70 | 60 |
| Azelis Bulgaria EAD | Bulgaria | Operating | 100 | 100 |
| Azelis Canada Inc. | Canada | Operating | 100 | 100 |
| Azelis China Ltd | China | Operating | 100 | 100 |
| Azelis (Shanghai) Co. Ltd. | China | Operating | 100 | 100 |
| Azelis (Shanghai) International Trading Co., Ltd | China | Operating | 100 | 100 |
| Azelis Hong Kong Ltd | China | Operating | 100 | 100 |
| CosBond China Ltd | China | Operating | 100 | 100 |
| CosBond (Shanghai) International Trading Co. Ltd | China | Operating | 100 | 100 |
| Azelis Trading Ltd | China | Operating | 100 | 100 |
| Danxia Trading (Shanghai) Co, Ltd | China | Operating | 100 | 100 |
| Guangzhou Danxia Trading Co, Ltd | China | Operating | 100 | 100 |
| Azelis Industrial Chemical Ltd | China | Operating | 100 | 100 |
| Azelis Chemical (Guangzhou) Co. Ltd | China | Operating | 100 | 100 |
| Danxia Tianjin Co. Ltd | China | Operating | 100 | 100 |
| Danxia Shanghai Co. Ltd | China | Operating | Dissolved | 100 |
| Rocsa Colombia S.A. | Colombia | Operating | 100 | 63 |
| CI Inproquim Exports SAS | Colombia | Operating | Dissolved | 63 |
| Localpack S.A. | Colombia | Operating | 100 | 0 |
| Rocsa DCR SA | Costa Rica | Operating | 100 | 63 |
| Soluciones en Innovacion Famaceutica S A S | Colombia | Operating | 100 | 0 |
| Azelis Croatia D.O.O. | Croatia | Operating | 100 | 100 |
| Azelis CEE Holding A.S. | Czech Republic | Operating | 100 | 100 |
| Azelis Czech Republic S.R.O. | Czech Republic | Operating | 100 | 100 |
| Azelis Denmark A/S | Denmark | Operating | 100 | 100 |
| Rocsa RD SA | Dominican Republic | Operating | 100 | 63 |
| Orkila Egypt Chemicals SAE | Egypt | Operating | 99 | 99 |
| Orchem for Import and Export LLC | Egypt | Operating | 49 | 49 |
| Azelis Finland OY | Finland | Operating | 100 | 100 |
| Haarla Oy | Finland | Operating | 100 | 0 |
| Azelis France S.A.S | France | Operating | 100 | 100 |
| Azelis France Holding S.A.S | France | Operating | 100 | 100 |
| BLH SAS | France | Operating | 100 | 100 |
| NATSOE SAS | France | Operating | Merged | 100 |
| Azelis Deutschland GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Holding GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Immobilien GmbH1 | Germany | Operating | Merged | 100 |
| Azelis Deutschland Kosmetik GmbH1 | Germany | Operating | 90 | 90 |
| Azelis Chemicals Ghana Ltd | Ghana | Operating | 100 | 100 |
| Azelis Greece Single Member SA | Greece | Operating | 100 | 100 |
| Rocsa GT SA | Guatemala | Operating | 100 | 63 |
| Azelis Hungary Kft. | Hungary | Operating | 100 | 100 |
| Azelis India Private Ltd | India | Operating | 100 | 100 |
| Ashapura Aromas Private Limited | India | Operating | 70 | 70 |
| PT Azelis Indonesia Distribusi | Indonesia | Operating | 100 | 100 |
| PT Marga Dwi Kencana | Indonesia | Operating | 100 | 0 |
| Azelis Ireland Ltd. | Ireland | Operating | 100 | 100 |
| Azelis Israel Distribution Ltd | Israel | Operating | 100 | 100 |
| Lidorr Elements Ltd; | Israel | Operating | 100 | 100 |
| ProAgro Ltd; | Israel | Operating | 100 | 100 |
| Liad Agro Ltd; | Israel | Operating | 100 | 100 |
| Darbal Ltd. | Israel | Operating | 100 | 100 |
| Azelis Italia Logistica S.r.L | Italy | Operating | 100 | 100 |
| Azelis Italia S.r.L | Italy | Operating | 100 | 100 |
| Eurotrading SpA | Italy | Operating | 100 | 100 |
| Azelis C\u00f4te d'Ivoire S.A. | Ivory Coast | Operating | 100 | 100 |
| Azelis Japan K.K. | Japan | Operating | 100 | 100 |
| Azelis Jordan LLC | Jordan | Operating | 50 | 50 |
| Azelis Kenya Ltd | Kenya | Operating | 100 | 100 |
| Azelis Korea Co. Ltd | Korea | Operating | 100 | 100 |
| Azelis Middle East Africa Holding SAL | Lebanon | Operating | 100 | 100 |
| Azelis Lebanon SAL | Lebanon | Operating | 100 | 100 |
| Azelis International (Offshore) SAL | Lebanon | Operating | 100 | 100 |
| Chempart Polymers SAL Offshore | Lebanon | Operating | 100 | 100 |
| Chemical Partners Middle East SAL | Lebanon | Operating | 100 | 100 |
| Akita Topco S.\u00e0 r.l. | Luxembourg | Non-operating | 100 | 100 |
| Azelis S.A. | Luxembourg | Non-operating | 100 | 100 |
| Azelis Malaysia Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Chemical Solutions Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Azelis Mexico SA de CV | Mexico | Operating | 100 | 100 |
| Azelis Morocco Sarl | Morocco | Operating | 100 | 100 |
| Orkila Invest SA | Morocco | Operating | 100 | 100 |
| Azelis Netherlands B.V. | Netherlands | Operating | 100 | 100 |
| Sirius International Detergents B.V. | Netherlands | Operating | Merged | 100 |
| Sirius International Water Treatment B.V. | Netherlands | Operating | Merged | 100 |
| Azelis Nigeria Specialty Chemicals Ltd | Nigeria | Operating | 100 | 100 |
| Azelis Norway AS | Norway | Operating | 100 | 100 |
| Azelis New Zealand Ltd | New Zealand | Operating | 100 | 100 |
| Chemiplas Agencies Ltd | New Zealand | Operating | Merged | 100 |
| Chemiplas (N.Z.) Ltd | New Zealand | Operating | Merged | 100 |
| Element Trading SAC | Peru | Operating | 100 | 63 |
| Asia Primera Kimika Inc. | Philippines | Operating | 100 | 51 |
| Phil-Asiatic Supply & Services Inc. | Philippines | Operating | 100 | 51 |
| Azelis Poland SP Z.o.o | Poland | Operating | 100 | 100 |
| Hortimex Sp. Z.o.o. | Poland | Operating | 100 | 0 |
| Azelis Romania SRL | Romania | Operating | 100 | 100 |
| Azelis Rus LLC | Russia | Operating | 100 | 100 |
| Azelis Arabia LLC | Saudi Arabia | Operating | 75 | 75 |
| Azelis Senegal SA | Senegal | Operating | 100 | 100 |
| Azelis d.o.o Beograd | Serbia | Operating | 100 | 100 |
| Azelis Singapore Pte. Ltd | Singapore | Operating | 100 | 100 |
| Bellekimia Singapore Pte. Ltd. | Singapore | Operating | 100 | 51 |
| Azelis Slovakia S.R.O. | Slovakia | Operating | 100 | 100 |
| Azelis South Africa Holding (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Azelis South Africa (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Orbichem Petrochemicals (Pty) Ltd | South Africa | Operating | 85 | 85 |
| CPS Chemical (Coatings) (Pty) Ltd | South Africa | Operating | 85 | 0 |
| Azelis Espa\u00f1a S.A. | Spain | Operating | 100 | 100 |
| Azelis Iberica Holding SL. | Spain | Operating | 100 | 100 |
| Azelis Espana Holding SL | Spain | Operating | 100 | 100 |
| Azelis Sweden AB | Sweden | Operating | 100 | 100 |
| Azelis Switzerland AG | Switzerland | Operating | 100 | 100 |
| Azelis Thailand Ltd | Thailand | Operating | 100 | 100 |
| Catalite Co. Ltd | Thailand | Operating | 100 | 51 |
| Azelis Tunisie Sarl | Tunisia | Operating | 100 | 100 |
| Azelis TR Kimya End. Ur.Ith.Ihr.Tic ve San A.S. | Turkey | Operating | 100 | 100 |
| Oktrade Kimya Sanayi ve Ticaret Anonim \u015eirketi | Turkey | Operating | Merged | 0 |
| Da\u011falt\u0131 Kau\u00e7uk ve K\u0130myev\u0130 Maddeler Sanay\u0130 T\u0130caret Anon\u0130m \u015e\u0130rket\u0130 | Turkey | Operating | Merged | 100 |
| Azelis Ukraine LLC | Ukraine | Operating | 100 | 100 |
| Orkila FZE | United Arabic Emirates | Operating | 100 | 100 |
| Azelis UK Holdings Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Finance Ltd | United Kingdom | Operating | 100 | 100 |
| Whitfield Chemical Group Ltd | United Kingdom | Operating | Dissolved | 100 |
| Whitfield Chemical Holdings Ltd | United Kingdom | Operating | Dissolved | 100 |
| WhitChem Ltd | United Kingdom | Operating | Dissolved | 100 |
| ADAPCO LLC | United States | Operating | 100 | 100 |
| Azelis Americas LLC | United States | Operating | 100 | 100 |
| Azelis US Holding Inc. | United States | Operating | 100 | 100 |
| Dewolf Chemical LLC | United States | Operating | 100 | 100 |
| Glenn LLC | United States | Operating | 100 | 100 |
| P.T. Hutchins Company LLC | United States | Operating | 100 | 100 |
| Marcor Development LLC | United States | Operating | 100 | 100 |
| Monson Companies LLC | United States | Operating | 100 | 100 |
| Precision Control Technology LLC | United States | Operating | 100 | 100 |
| Azelis Americas Case LLC | United States | Operating | 100 | 100 |
| Red River Specialties LLC | United States | Operating | 100 | 100 |
| C.L. Zimmerman Co. of Delaware LLC | United States | Operating | 100 | 100 |
| Ross Organic Specialty Sales Inc. | United States | Operating | 100 | 100 |
| Vigon International LLC | United States | Operating | 100 | 100 |
| Gillco Products, LCC | United States | Operating | 100 | 100 |
| Azelis Vietnam Company Ltd | Vietnam | Operating | 100 | 100 |
| MKVN Chemicals Co, Ltd | Vietnam | Operating | 100 | 51 |
| Viet Chemicals Trading and Service Company Limited | Vietnam | Operating | 100 | 51 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Companies accounted for using the equity method | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Chemlog S.A.S. | France | N/A | 50 | 50 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade receivables | 496,379 | 444,863 |
| Other receivables | 92,653 | 77,033 |
| \u00a0 | 589,031 | 521,896 |
See note 4.1.1 for aging and allowance of these receivables. Other receivables relate mainly to prepayments.
", "dimensions": { "concept": "ifrs-full:DisclosureOfPrepaymentsAndOtherAssetsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8368-1": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Bank balances and cash on hand | 303,945 | 484,874 |
| Bank overdrafts (-) | -19,146 | -18,286 |
| Cash and cash equivalents (net) in the cash flow statement | 284,799 | 466,588 |
Interest rates payable for bank overdrafts used have a variable interest rate based on Euribor plus a margin.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8368-2": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Bank balances and cash on hand | 303,945 | 484,874 |
| Bank overdrafts (-) | -19,146 | -18,286 |
| Cash and cash equivalents (net) in the cash flow statement | 284,799 | 466,588 |
Interest rates payable for bank overdrafts used have a variable interest rate based on Euribor plus a margin.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCashFlowStatementExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i8389-1": { "value": "Interest rates payable for bank overdrafts used have a variable interest rate based on Euribor plus a margin.
", "dimensions": { "concept": "ifrs-full:DisclosureOfRestrictedCashAndCashEquivalentsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8390-2": { "value": "Per Belgian regulations and the Company's Articles of Association, Azelis Group NV must allocate to legal reserve a minimum of 5% of the standalone net profit, until such reserve reaches 10% of the share capital. As of December 31, 2024, the legal reserve (as included in other reserves) amounts to \u20ac488.2 thousand (2023: \u20ac26.0 thousand).
The basic earnings per share and diluted earnings per share are calculated as follows:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| Net group profit/loss (-) attributable to shareholders (in thousands of \u20ac) | 180,693 | 177,704 |
| Average number of shares (in thousand shares) | 243,536 | 239,856 |
| Basic earnings per share | 0.74 | 0.74 |
| Dilution adjusted average number of shares (in thousand shares) | 243,779 | 240,102 |
| Diluted earnings per share | 0.74 | 0.74 |
The average number of shares are calculated as:
| (in thousands) | 2024 | 2023 |
|---|---|---|
| Ordinary shares issued (entitled to dividend) | 243,922 | 233,846 |
| Weighted effect of treasury shares | -386 | -246 |
| Weighted effect of new ordinary shares issued | 0 | 6,256 |
| Average number of shares for basic EPS | 243,536 | 239,856 |
| Weighted effect of share-based payment | 243 | 247 |
| Average number of shares for diluted EPS | 243,779 | 240,102 |
On May 19, 2023, Azelis increased its share capital by (rounded) \u20ac200\u00a0million, following the issuance of 10,075,566 new shares, at a price of \u20ac19.85 per share and with the same rights as the existing shares of the Company. After this capital increase, the capital of the Company amounted to \u20ac5,879,999,963.10, represented by 243,921,719 equal shares. There were no changes in the share capital during 2024.
Other reserves are part of the Reserves in the consolidated statement of financial position. These include the equity effect of the capital reorganization under common control in 2021 mainly due to the cancellation of the historical share capital and share premium, the initial recognition of written put options on non-controlling interests, transactions with treasury shares, and other adjustments to equity.
As of December 31, 2024, the Group has recognized within other reserves, the initial recognition of put options for a total amount of \u20ac86.0 million mainly related to the minority stakes in Ashapura (India) and Vogler Ingredients (Brazil). In 2023, other reserves included the initial recognition of put options for a total amount of \u20ac148.4 million.
In 2024, the Group purchased 130,000 treasury shares on Euronext Brussels for a total amount of \u20ac2.5\u00a0million to fund its long-term incentive plan (2023: 150,000 treasury shares for a total amount of \u20ac3.4 million).
Translation reserve is part of the Reserves in the consolidated statement of financial position.
Exchange differences arising on translation of the foreign controlled entities are recognized in other comprehensive income and accumulated in the translation reserve within equity.
The majority of the intangible assets on Azelis' statement of financial position relate to the EQT/PSP acquisition in November 2018. The respective amounts have been allocated to Azelis' three operating segments and, per IFRS, also on the basis of the underlying foreign currencies in Azelis' respective jurisdictions (of which a major part relates to Azelis' activities in the United States). Exchange differences arising on translation of the intangible assets are recognized in other comprehensive income and accumulated in the translation reserve within equity.
In 2024 the translation reserve has increased by \u20ac57.2 million (2023: decrease by \u20ac99.3 million), mainly originating from the translation to EUR of the financial positions of subsidiaries having their local currency in USD, TRL and COP.
Retained earnings includes the unappropriated result of previous years.
Reserves available for distribution is part of the Reserves in the consolidated statement of financial position.
In September 2021, and in connection with Azelis' IPO, the Group reduced its share capital by \u20ac400 million against reserves available for distribution, in order to create funds for distribution to the shareholders. No capital contributions were repaid to the shareholders in the context of this capital reduction.
At the Annual General Meeting of the Company held on June 13, 2024, the shareholders approved the payment of a total dividend amount of \u20ac53.3 million regarding the 2023 financial year, i.e. a gross dividend of (rounded) \u20ac0.22 per share outstanding at the moment of the dividend payout. The total amount of \u20ac53.3 million was paid to the shareholders in 2024.
On March 4, 2025, a dividend of \u20ac54.9 million, implying \u20ac0.23 dividend per share1, was proposed by the Board of Directors. The dividend will be paid out to the shareholders upon approval by the Shareholders' Meeting on May 8, 2025.
Non-controlling interests reflect the share of equity ownership in the Group's subsidiaries that is not owned by the Group, even though those subsidiaries are consolidated in the Group's consolidated financial statements. Ashapura Aromas (India), Vogler Ingredients (Brazil) and Azelis South Africa (South Africa) are the main contributors for the non-controlling interests. Refer also to note 26.4.
In 2024, the Group acquired the full non-controlling interests in Catalite (Thailand), MKVN Chemicals (Vietnam), Viet Chemicals Trading (Vietnam), Asia Primera Kimika (Philippines), Phil-Asiatic Supply & Services (Philippines) and part of the non-controlling interest in Vogler Ingredients (Brazil) by settling the related put option redemption liabilities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfReservesAndOtherEquityInterestExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8391-1": { "value": "The basic earnings per share and diluted earnings per share are calculated as follows:
| \u00a0 | 2024 | 2023 |
|---|---|---|
| Net group profit/loss (-) attributable to shareholders (in thousands of \u20ac) | 180,693 | 177,704 |
| Average number of shares (in thousand shares) | 243,536 | 239,856 |
| Basic earnings per share | 0.74 | 0.74 |
| Dilution adjusted average number of shares (in thousand shares) | 243,779 | 240,102 |
| Diluted earnings per share | 0.74 | 0.74 |
The average number of shares are calculated as:
| (in thousands) | 2024 | 2023 |
|---|---|---|
| Ordinary shares issued (entitled to dividend) | 243,922 | 233,846 |
| Weighted effect of treasury shares | -386 | -246 |
| Weighted effect of new ordinary shares issued | 0 | 6,256 |
| Average number of shares for basic EPS | 243,536 | 239,856 |
| Weighted effect of share-based payment | 243 | 247 |
| Average number of shares for diluted EPS | 243,779 | 240,102 |
On May 19, 2023, Azelis increased its share capital by (rounded) \u20ac200\u00a0million, following the issuance of 10,075,566 new shares, at a price of \u20ac19.85 per share and with the same rights as the existing shares of the Company. After this capital increase, the capital of the Company amounted to \u20ac5,879,999,963.10, represented by 243,921,719 equal shares. There were no changes in the share capital during 2024.
", "dimensions": { "concept": "ifrs-full:DisclosureOfIssuedCapitalExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i8453-1": { "value": "In 2024, the Group purchased 130,000 treasury shares on Euronext Brussels for a total amount of \u20ac2.5\u00a0million to fund its long-term incentive plan (2023: 150,000 treasury shares for a total amount of \u20ac3.4 million).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTreasurySharesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8455-1": { "value": "Reserves available for distribution is part of the Reserves in the consolidated statement of financial position.
In September 2021, and in connection with Azelis' IPO, the Group reduced its share capital by \u20ac400 million against reserves available for distribution, in order to create funds for distribution to the shareholders. No capital contributions were repaid to the shareholders in the context of this capital reduction.
At the Annual General Meeting of the Company held on June 13, 2024, the shareholders approved the payment of a total dividend amount of \u20ac53.3 million regarding the 2023 financial year, i.e. a gross dividend of (rounded) \u20ac0.22 per share outstanding at the moment of the dividend payout. The total amount of \u20ac53.3 million was paid to the shareholders in 2024.
On March 4, 2025, a dividend of \u20ac54.9 million, implying \u20ac0.23 dividend per share1, was proposed by the Board of Directors. The dividend will be paid out to the shareholders upon approval by the Shareholders' Meeting on May 8, 2025.
Non-controlling interests reflect the share of equity ownership in the Group's subsidiaries that is not owned by the Group, even though those subsidiaries are consolidated in the Group's consolidated financial statements. Ashapura Aromas (India), Vogler Ingredients (Brazil) and Azelis South Africa (South Africa) are the main contributors for the non-controlling interests. Refer also to note 26.4.
In 2024, the Group acquired the full non-controlling interests in Catalite (Thailand), MKVN Chemicals (Vietnam), Viet Chemicals Trading (Vietnam), Asia Primera Kimika (Philippines), Phil-Asiatic Supply & Services (Philippines) and part of the non-controlling interest in Vogler Ingredients (Brazil) by settling the related put option redemption liabilities.
", "dimensions": { "concept": "ifrs-full:DisclosureOfNoncontrollingInterestsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8460-1": { "value": "The Group\u2019s debt finance consists mainly of the following financial instruments:
| (in thousands of \u20ac) | Interest rate (base) | Interest rate (margin) | Expiration | Notional amount | Carrying amount |
|---|---|---|---|---|---|
| EUR term loan | 3.20% | 1.90% | 2029 | 600,000 | 592,664 |
| Revolving Credit Facility | N/A1 | 1.65% | 2029 | 0 | 0 |
| Bond 2023 | 5.75% | N/A | 2028 | 400,000 | 395,083 |
| Bond 2024 | 4.75% | N/A | 2029 | 600,000 | 595,663 |
| Schuldschein | 2,64% (variable) & 4.74% (fixed) | 2.55% | 2027 & 2029 | 30,000 | 29,949 |
| Other bank loans | 1,00% - 14,56% | N/A | 2026 | 23,698 | 23,698 |
| Accrued interest | \u00a0 | \u00a0 | \u00a0 | 24,032 | 24,032 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,677,730 | 1,661,091 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 1,630,555 | 1,613,916 |
| Current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 47,175 | 47,175 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,677,730 | 1,661,091 |
| (in thousands of \u20ac) | Interest rate (base) | Interest rate (margin) | Expiration | Notional amount | Carrying amount |
|---|---|---|---|---|---|
| First lien \u20ac | 4.07% | 1.90% | 2026 | 900,000 | 896,911 |
| First lien GBP | 5.26% | 2.15% | 2026 | 148,196 | 147,623 |
| Revolving Credit Facility | N/A1 | 1.65% | 2028 | 0 | 0 |
| Bond 2023 | 5.75% | N/A | 2028 | 400,000 | 392,478 |
| Schuldschein | 2.64%-3.92% (variable & fixed) | 1.9%-2.5% | 2025-2029 | 108,500 | 108,439 |
| Other bank loans | 0,50% - 17,62% | N/A | 2026 | 59,215 | 59,215 |
| Accrued interest | \u00a0 | \u00a0 | \u00a0 | 26,528 | 26,528 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,642,439 | 1,631,194 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 1,561,879 | 1,550,634 |
| Current borrowings and loans | \u00a0 | \u00a0 | \u00a0 | 80,560 | 80,560 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | 1,642,439 | 1,631,194 |
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| As of January 1 | 1,631,195 | 1,303,717 |
| Cash flows from loans and borrowings | 42,293 | 252,274 |
| Transaction costs paid | -13,072 | -8,117 |
| Changes arising from business combinations | 2,054 | 62,497 |
| Capitalized transactions cost amortized | 7,745 | 3,113 |
| Changes in interest accruals | -2,496 | 14,904 |
| Currency translation differences | -6,628 | 2,806 |
| As of the end of the period | 1,661,091 | 1,631,195 |
In September 2024, the Group concluded a \u20ac600 million Term Loan Facility (maturing in 2029) and additionally issued a new bond totaling to \u20ac600 million (due in 2029), to refinance its existing EUR and GBP Term Loans (maturing in 2026) as well as the portion of the outstanding Schuldschein loans due in 2025. At the same time, the Group has refinanced and increased its Revolving Credit Facility to maturity in 2029 (with 2 one-year extension possibilities) and \u20ac500 million, respectively.
Related to these refinancing transactions, a total of \u20ac13.1 million transaction costs were capitalized in 2024 and are amortized over the lending period of the underlying instruments. The remaining capitalized transaction costs paid in relation to the refinanced EUR and GBP Term Loans were amortized in 2024.
In December 2024, a portion of \u20ac78.5 million of the outstanding Schuldschein loan due in 2027 was repaid as well.
As at December 31, 2024, the Group holds bank borrowings at variable interest rates from a lender's syndicate in the form of a Term Loan Facility of \u20ac600 million (2023: \u20ac900 million and GBP 128.8 million) and a Revolving Credit Facility of \u20ac500 million (2023: \u20ac350 million). The Revolving Credit Facility is fully undrawn as of December 31, 2024 (2023: facility of \u20ac350 million fully unused).
The variable interest rates are based on EURIBOR (capped at a floor of 0%), and a margin based on the Group's total net leverage. The margin is capped at 2.40% for the \u20ac\u00a0Term Loan Facility (1.90% until March 26, 2025), and 2.15% (1.65% until March 26, 2025) for the Revolving Credit Facility. At the latest in September 2025, the Group may incorporate an adjustment to the margin linked to its new Impact 2030 sustainability targets.
In addition to the Term Loan Facility and Revolving Credit Facility, the Group also holds different Schuldschein agreements, of which \u20ac30.0 million was used as of December 31, 2024 (2023: \u20ac108.5 million). The Schuldschein is a semi-private bond type of financing, with maturity dates of the outstanding tranches in 2027 and 2029. Interest charges are partly fixed at 4.74% and partly variable (6m Euribor plus margin 2.55%). The Schuldschein agreements can be repaid in advance under certain conditions.
In March 2023, Azelis Group issued a \u20ac400\u00a0million bond at a fixed interest rate of 5.75%, which is due in 2028. In September 2024, the Company issued a \u20ac600 million bond at a fixed interest rate of 4.75%, which is due in 2029.
In accordance with its policy on managing the risk related to interest rates (refer to the Risk Management section), Azelis has interest rate cap agreements for a total loan amount of \u20ac700 million, expiring March 31, 2025, providing the Group with an interest rate cap of 3% on EURIBOR until that date.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| As of January 1 | 126,619 | 101,558 |
| Business combination | 981 | 17,907 |
| New contracts | 67,114 | 29,863 |
| Remeasurements | 6,836 | 6,096 |
| Cash out | -38,073 | -28,704 |
| Currency translation differences | 277 | -101 |
| As of the end of the period | 163,753 | 126,619 |
For disclosure on the Group's right-of-use assets, refer to note 16.2.
The carrying amount of loans and borrowings and bank overdrafts concluded under supplier finance arrangements are \u20ac26.2 million as of December 31, 2024 (as of December 31, 2023: \u20ac35.3 million), of which suppliers fully received the payment from the financial institution. The non-cash flows of trade payables substituted by loans and borrowings under the Group's supplier finance arrangements during 2024 amount to \u20ac70.7 million (2023: \u20ac156.3\u00a0million). The extended period provided under supplier financing arrangements increased from 31-60 days to 90-180 days in average.
The financing arrangements of Azelis Group NV and its subsidiaries contain, since September 2021, a financial maintenance covenant, being the total net leverage ratio, which needs to be less than 4.50: 1.00 and is tested twice annually.
As of December 31, 2024, the total net leverage ratio is 2.9: 1.0 (2023: 2.5: 1.0), therefore the Group has complied with the financial covenants. The Group monitors compliance with all covenants on the basis of the monthly reporting process and the continuous cash flow forecasts.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8657-1": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| As of January 1 | 1,631,195 | 1,303,717 |
| Cash flows from loans and borrowings | 42,293 | 252,274 |
| Transaction costs paid | -13,072 | -8,117 |
| Changes arising from business combinations | 2,054 | 62,497 |
| Capitalized transactions cost amortized | 7,745 | 3,113 |
| Changes in interest accruals | -2,496 | 14,904 |
| Currency translation differences | -6,628 | 2,806 |
| As of the end of the period | 1,661,091 | 1,631,195 |
In September 2024, the Group concluded a \u20ac600 million Term Loan Facility (maturing in 2029) and additionally issued a new bond totaling to \u20ac600 million (due in 2029), to refinance its existing EUR and GBP Term Loans (maturing in 2026) as well as the portion of the outstanding Schuldschein loans due in 2025. At the same time, the Group has refinanced and increased its Revolving Credit Facility to maturity in 2029 (with 2 one-year extension possibilities) and \u20ac500 million, respectively.
Related to these refinancing transactions, a total of \u20ac13.1 million transaction costs were capitalized in 2024 and are amortized over the lending period of the underlying instruments. The remaining capitalized transaction costs paid in relation to the refinanced EUR and GBP Term Loans were amortized in 2024.
In December 2024, a portion of \u20ac78.5 million of the outstanding Schuldschein loan due in 2027 was repaid as well.
As at December 31, 2024, the Group holds bank borrowings at variable interest rates from a lender's syndicate in the form of a Term Loan Facility of \u20ac600 million (2023: \u20ac900 million and GBP 128.8 million) and a Revolving Credit Facility of \u20ac500 million (2023: \u20ac350 million). The Revolving Credit Facility is fully undrawn as of December 31, 2024 (2023: facility of \u20ac350 million fully unused).
The variable interest rates are based on EURIBOR (capped at a floor of 0%), and a margin based on the Group's total net leverage. The margin is capped at 2.40% for the \u20ac\u00a0Term Loan Facility (1.90% until March 26, 2025), and 2.15% (1.65% until March 26, 2025) for the Revolving Credit Facility. At the latest in September 2025, the Group may incorporate an adjustment to the margin linked to its new Impact 2030 sustainability targets.
In addition to the Term Loan Facility and Revolving Credit Facility, the Group also holds different Schuldschein agreements, of which \u20ac30.0 million was used as of December 31, 2024 (2023: \u20ac108.5 million). The Schuldschein is a semi-private bond type of financing, with maturity dates of the outstanding tranches in 2027 and 2029. Interest charges are partly fixed at 4.74% and partly variable (6m Euribor plus margin 2.55%). The Schuldschein agreements can be repaid in advance under certain conditions.
In March 2023, Azelis Group issued a \u20ac400\u00a0million bond at a fixed interest rate of 5.75%, which is due in 2028. In September 2024, the Company issued a \u20ac600 million bond at a fixed interest rate of 4.75%, which is due in 2029.
In accordance with its policy on managing the risk related to interest rates (refer to the Risk Management section), Azelis has interest rate cap agreements for a total loan amount of \u20ac700 million, expiring March 31, 2025, providing the Group with an interest rate cap of 3% on EURIBOR until that date.
", "dimensions": { "concept": "ifrs-full:DisclosureOfBorrowingCostsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "p-blocktag-i8698-1": { "value": "In March 2023, Azelis Group issued a \u20ac400\u00a0million bond at a fixed interest rate of 5.75%, which is due in 2028. In September 2024, the Company issued a \u20ac600 million bond at a fixed interest rate of 4.75%, which is due in 2029.
", "dimensions": { "concept": "ifrs-full:DisclosureOfDebtSecuritiesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8738-1": { "value": "The carrying amount of loans and borrowings and bank overdrafts concluded under supplier finance arrangements are \u20ac26.2 million as of December 31, 2024 (as of December 31, 2023: \u20ac35.3 million), of which suppliers fully received the payment from the financial institution. The non-cash flows of trade payables substituted by loans and borrowings under the Group's supplier finance arrangements during 2024 amount to \u20ac70.7 million (2023: \u20ac156.3\u00a0million). The extended period provided under supplier financing arrangements increased from 31-60 days to 90-180 days in average.
| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade payables | 486,804 | 434,085 |
| Other taxes | 12,199 | 13,032 |
| Employee and social security payables | 69,191 | 71,409 |
| Derivatives | 112 | 3,921 |
| Other payables | 132,261 | 277,023 |
| Total current payables | 700,567 | 799,470 |
| \u00a0 | \u00a0 | \u00a0 |
| Other payables | 33,166 | 69,816 |
| Other non-current liabilities | 33,166 | 69,816 |
The other current and non-current payables mainly consist of put options over non-controlling interests totaling \u20ac81.6 million (2023: \u20ac171.1 million), and earnouts and deferred payments in connection with acquisitions. The decrease in 2024 is mainly attributable to settlement of put option liabilities (Note 21.7).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTradeAndOtherPayablesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8739-2": { "value": "| (in thousands of \u20ac) | Tax Claims | Other provisions | Total |
|---|---|---|---|
| As of January 1 2023 | 2,997 | 5,144 | 8,141 |
| Business combination | 626 | 280 | 906 |
| Provisions made | 648 | 506 | 1,154 |
| Provisions used | -73 | -1,055 | -1,128 |
| Provisions released | -588 | -1,394 | -1,982 |
| Translation differences | -208 | -55 | -263 |
| As of December 31, 2023 | 3,402 | 3,426 | 6,828 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current | 2,226 | 932 | 3,158 |
| Current | 1,176 | 2,494 | 3,670 |
| Total provisions | 3,402 | 3,426 | 6,828 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| As of January 1 2024 | 3,402 | 3,426 | 6,828 |
| Business combination | 799 | - | 799 |
| Provisions made during the period | 237 | 1,011 | 1,248 |
| Provisions used during the period | -548 | -959 | -1,507 |
| Provisions released during the period | -1,311 | -799 | -2,110 |
| Translation differences | -216 | -40 | -256 |
| As of December 31, 2024 | 2,363 | 2,639 | 5,002 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Non-current | 1,640 | 877 | 2,517 |
| Current | 723 | 1,764 | 2,487 |
| Total provisions | 2,363 | 2,641 | 5,004 |
The provisions relate to tax risks, administrative fines, labor, and commercial matters including claims and litigations, concerning the past and current activities of the Group companies.
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherProvisionsContingentLiabilitiesAndContingentAssetsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8865-4": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade payables | 486,804 | 434,085 |
| Other taxes | 12,199 | 13,032 |
| Employee and social security payables | 69,191 | 71,409 |
| Derivatives | 112 | 3,921 |
| Other payables | 132,261 | 277,023 |
| Total current payables | 700,567 | 799,470 |
| \u00a0 | \u00a0 | \u00a0 |
| Other payables | 33,166 | 69,816 |
| Other non-current liabilities | 33,166 | 69,816 |
The other current and non-current payables mainly consist of put options over non-controlling interests totaling \u20ac81.6 million (2023: \u20ac171.1 million), and earnouts and deferred payments in connection with acquisitions. The decrease in 2024 is mainly attributable to settlement of put option liabilities (Note 21.7).
", "dimensions": { "concept": "ifrs-full:DisclosureOfOtherNoncurrentLiabilitiesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8865-5": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Trade payables | 486,804 | 434,085 |
| Other taxes | 12,199 | 13,032 |
| Employee and social security payables | 69,191 | 71,409 |
| Derivatives | 112 | 3,921 |
| Other payables | 132,261 | 277,023 |
| Total current payables | 700,567 | 799,470 |
| \u00a0 | \u00a0 | \u00a0 |
| Other payables | 33,166 | 69,816 |
| Other non-current liabilities | 33,166 | 69,816 |
The other current and non-current payables mainly consist of put options over non-controlling interests totaling \u20ac81.6 million (2023: \u20ac171.1 million), and earnouts and deferred payments in connection with acquisitions. The decrease in 2024 is mainly attributable to settlement of put option liabilities (Note 21.7).
", "dimensions": { "concept": "ifrs-full:DisclosureOfTaxReceivablesAndPayablesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8912-1": { "value": "There are no tax and other contingencies as of December 31, 2024 (for 2023: none). The Group monitors the possible risks and potential implications closely.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsAndContingentLiabilitiesExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8912-2": { "value": "There are no tax and other contingencies as of December 31, 2024 (for 2023: none). The Group monitors the possible risks and potential implications closely.
", "dimensions": { "concept": "ifrs-full:DisclosureOfCommitmentsExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8915-1": { "value": "| (in thousands of \u20ac) | 2024 | 2023 |
|---|---|---|
| Board members (non-executive) | 367 | 350 |
| Other members of key management personnel | \u00a0 | \u00a0 |
| Fixed remuneration | 2,811 | 2,818 |
| Variable remuneration | 1,670 | 1,340 |
| \u00a0 | 4,848 | 4,508 |
Post-employment benefits: Details of the transactions between the Group and its pension plans are disclosed in Note 11.
", "dimensions": { "concept": "ifrs-full:DisclosureOfInformationAboutKeyManagementPersonnelExplanatory", "language": "en", "entity": "scheme:699400M9RRMTV264FM70", "period": "2024-01-01T00:00:00/2025-01-01T00:00:00" } }, "section-blocktag-i8944-1": { "value": "The following table lists the Group\u2019s subsidiaries:
| Name | Country of incorporation | Type | % of interest 2024 | % of interest 2023 |
|---|---|---|---|---|
| Consolidated companies | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Group NV | Belgium | Non-operating | Parent company | Parent company |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Direct Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Finance NV | Belgium | Non-operating | 100 | 100 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Orkila Alg\u00e9rie spa | Algeria | Operating | 100 | 100 |
| Agspec Australia Pty Ltd | Australia | Operating | 100 | 0 |
| Azelis Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Chemcolour Industries Australia Pty Ltd | Australia | Operating | 100 | 100 |
| TimTechChem Australia Pty Ltd | Australia | Operating | 100 | 100 |
| EB1 Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Specialties Pty Limited | Australia | Operating | 100 | 100 |
| Elle Bee Exports Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Pty Ltd | Australia | Operating | 100 | 100 |
| Chemiplas Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Azelis Austria GmbH | Austria | Operating | 100 | 100 |
| Azelis Benelux N.V. | Belgium | Operating | 100 | 100 |
| Azelis EMEA Hub NV | Belgium | Operating | 100 | 100 |
| Azelis Products International SA | Belgium | Operating | 100 | 100 |
| Azelis Brasil Ltda | Brazil | Operating | 100 | 100 |
| Viveiruz Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 40 | 20 |
| Ybiap\u00ea Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 100 | 100 |
| Vogler Ingredientes Ltda. | Brazil | Operating | 70 | 60 |
| Azelis Bulgaria EAD | Bulgaria | Operating | 100 | 100 |
| Azelis Canada Inc. | Canada | Operating | 100 | 100 |
| Azelis China Ltd | China | Operating | 100 | 100 |
| Azelis (Shanghai) Co. Ltd. | China | Operating | 100 | 100 |
| Azelis (Shanghai) International Trading Co., Ltd | China | Operating | 100 | 100 |
| Azelis Hong Kong Ltd | China | Operating | 100 | 100 |
| CosBond China Ltd | China | Operating | 100 | 100 |
| CosBond (Shanghai) International Trading Co. Ltd | China | Operating | 100 | 100 |
| Azelis Trading Ltd | China | Operating | 100 | 100 |
| Danxia Trading (Shanghai) Co, Ltd | China | Operating | 100 | 100 |
| Guangzhou Danxia Trading Co, Ltd | China | Operating | 100 | 100 |
| Azelis Industrial Chemical Ltd | China | Operating | 100 | 100 |
| Azelis Chemical (Guangzhou) Co. Ltd | China | Operating | 100 | 100 |
| Danxia Tianjin Co. Ltd | China | Operating | 100 | 100 |
| Danxia Shanghai Co. Ltd | China | Operating | Dissolved | 100 |
| Rocsa Colombia S.A. | Colombia | Operating | 100 | 63 |
| CI Inproquim Exports SAS | Colombia | Operating | Dissolved | 63 |
| Localpack S.A. | Colombia | Operating | 100 | 0 |
| Rocsa DCR SA | Costa Rica | Operating | 100 | 63 |
| Soluciones en Innovacion Famaceutica S A S | Colombia | Operating | 100 | 0 |
| Azelis Croatia D.O.O. | Croatia | Operating | 100 | 100 |
| Azelis CEE Holding A.S. | Czech Republic | Operating | 100 | 100 |
| Azelis Czech Republic S.R.O. | Czech Republic | Operating | 100 | 100 |
| Azelis Denmark A/S | Denmark | Operating | 100 | 100 |
| Rocsa RD SA | Dominican Republic | Operating | 100 | 63 |
| Orkila Egypt Chemicals SAE | Egypt | Operating | 99 | 99 |
| Orchem for Import and Export LLC | Egypt | Operating | 49 | 49 |
| Azelis Finland OY | Finland | Operating | 100 | 100 |
| Haarla Oy | Finland | Operating | 100 | 0 |
| Azelis France S.A.S | France | Operating | 100 | 100 |
| Azelis France Holding S.A.S | France | Operating | 100 | 100 |
| BLH SAS | France | Operating | 100 | 100 |
| NATSOE SAS | France | Operating | Merged | 100 |
| Azelis Deutschland GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Holding GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Immobilien GmbH1 | Germany | Operating | Merged | 100 |
| Azelis Deutschland Kosmetik GmbH1 | Germany | Operating | 90 | 90 |
| Azelis Chemicals Ghana Ltd | Ghana | Operating | 100 | 100 |
| Azelis Greece Single Member SA | Greece | Operating | 100 | 100 |
| Rocsa GT SA | Guatemala | Operating | 100 | 63 |
| Azelis Hungary Kft. | Hungary | Operating | 100 | 100 |
| Azelis India Private Ltd | India | Operating | 100 | 100 |
| Ashapura Aromas Private Limited | India | Operating | 70 | 70 |
| PT Azelis Indonesia Distribusi | Indonesia | Operating | 100 | 100 |
| PT Marga Dwi Kencana | Indonesia | Operating | 100 | 0 |
| Azelis Ireland Ltd. | Ireland | Operating | 100 | 100 |
| Azelis Israel Distribution Ltd | Israel | Operating | 100 | 100 |
| Lidorr Elements Ltd; | Israel | Operating | 100 | 100 |
| ProAgro Ltd; | Israel | Operating | 100 | 100 |
| Liad Agro Ltd; | Israel | Operating | 100 | 100 |
| Darbal Ltd. | Israel | Operating | 100 | 100 |
| Azelis Italia Logistica S.r.L | Italy | Operating | 100 | 100 |
| Azelis Italia S.r.L | Italy | Operating | 100 | 100 |
| Eurotrading SpA | Italy | Operating | 100 | 100 |
| Azelis C\u00f4te d'Ivoire S.A. | Ivory Coast | Operating | 100 | 100 |
| Azelis Japan K.K. | Japan | Operating | 100 | 100 |
| Azelis Jordan LLC | Jordan | Operating | 50 | 50 |
| Azelis Kenya Ltd | Kenya | Operating | 100 | 100 |
| Azelis Korea Co. Ltd | Korea | Operating | 100 | 100 |
| Azelis Middle East Africa Holding SAL | Lebanon | Operating | 100 | 100 |
| Azelis Lebanon SAL | Lebanon | Operating | 100 | 100 |
| Azelis International (Offshore) SAL | Lebanon | Operating | 100 | 100 |
| Chempart Polymers SAL Offshore | Lebanon | Operating | 100 | 100 |
| Chemical Partners Middle East SAL | Lebanon | Operating | 100 | 100 |
| Akita Topco S.\u00e0 r.l. | Luxembourg | Non-operating | 100 | 100 |
| Azelis S.A. | Luxembourg | Non-operating | 100 | 100 |
| Azelis Malaysia Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Chemical Solutions Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Azelis Mexico SA de CV | Mexico | Operating | 100 | 100 |
| Azelis Morocco Sarl | Morocco | Operating | 100 | 100 |
| Orkila Invest SA | Morocco | Operating | 100 | 100 |
| Azelis Netherlands B.V. | Netherlands | Operating | 100 | 100 |
| Sirius International Detergents B.V. | Netherlands | Operating | Merged | 100 |
| Sirius International Water Treatment B.V. | Netherlands | Operating | Merged | 100 |
| Azelis Nigeria Specialty Chemicals Ltd | Nigeria | Operating | 100 | 100 |
| Azelis Norway AS | Norway | Operating | 100 | 100 |
| Azelis New Zealand Ltd | New Zealand | Operating | 100 | 100 |
| Chemiplas Agencies Ltd | New Zealand | Operating | Merged | 100 |
| Chemiplas (N.Z.) Ltd | New Zealand | Operating | Merged | 100 |
| Element Trading SAC | Peru | Operating | 100 | 63 |
| Asia Primera Kimika Inc. | Philippines | Operating | 100 | 51 |
| Phil-Asiatic Supply & Services Inc. | Philippines | Operating | 100 | 51 |
| Azelis Poland SP Z.o.o | Poland | Operating | 100 | 100 |
| Hortimex Sp. Z.o.o. | Poland | Operating | 100 | 0 |
| Azelis Romania SRL | Romania | Operating | 100 | 100 |
| Azelis Rus LLC | Russia | Operating | 100 | 100 |
| Azelis Arabia LLC | Saudi Arabia | Operating | 75 | 75 |
| Azelis Senegal SA | Senegal | Operating | 100 | 100 |
| Azelis d.o.o Beograd | Serbia | Operating | 100 | 100 |
| Azelis Singapore Pte. Ltd | Singapore | Operating | 100 | 100 |
| Bellekimia Singapore Pte. Ltd. | Singapore | Operating | 100 | 51 |
| Azelis Slovakia S.R.O. | Slovakia | Operating | 100 | 100 |
| Azelis South Africa Holding (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Azelis South Africa (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Orbichem Petrochemicals (Pty) Ltd | South Africa | Operating | 85 | 85 |
| CPS Chemical (Coatings) (Pty) Ltd | South Africa | Operating | 85 | 0 |
| Azelis Espa\u00f1a S.A. | Spain | Operating | 100 | 100 |
| Azelis Iberica Holding SL. | Spain | Operating | 100 | 100 |
| Azelis Espana Holding SL | Spain | Operating | 100 | 100 |
| Azelis Sweden AB | Sweden | Operating | 100 | 100 |
| Azelis Switzerland AG | Switzerland | Operating | 100 | 100 |
| Azelis Thailand Ltd | Thailand | Operating | 100 | 100 |
| Catalite Co. Ltd | Thailand | Operating | 100 | 51 |
| Azelis Tunisie Sarl | Tunisia | Operating | 100 | 100 |
| Azelis TR Kimya End. Ur.Ith.Ihr.Tic ve San A.S. | Turkey | Operating | 100 | 100 |
| Oktrade Kimya Sanayi ve Ticaret Anonim \u015eirketi | Turkey | Operating | Merged | 0 |
| Da\u011falt\u0131 Kau\u00e7uk ve K\u0130myev\u0130 Maddeler Sanay\u0130 T\u0130caret Anon\u0130m \u015e\u0130rket\u0130 | Turkey | Operating | Merged | 100 |
| Azelis Ukraine LLC | Ukraine | Operating | 100 | 100 |
| Orkila FZE | United Arabic Emirates | Operating | 100 | 100 |
| Azelis UK Holdings Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Finance Ltd | United Kingdom | Operating | 100 | 100 |
| Whitfield Chemical Group Ltd | United Kingdom | Operating | Dissolved | 100 |
| Whitfield Chemical Holdings Ltd | United Kingdom | Operating | Dissolved | 100 |
| WhitChem Ltd | United Kingdom | Operating | Dissolved | 100 |
| ADAPCO LLC | United States | Operating | 100 | 100 |
| Azelis Americas LLC | United States | Operating | 100 | 100 |
| Azelis US Holding Inc. | United States | Operating | 100 | 100 |
| Dewolf Chemical LLC | United States | Operating | 100 | 100 |
| Glenn LLC | United States | Operating | 100 | 100 |
| P.T. Hutchins Company LLC | United States | Operating | 100 | 100 |
| Marcor Development LLC | United States | Operating | 100 | 100 |
| Monson Companies LLC | United States | Operating | 100 | 100 |
| Precision Control Technology LLC | United States | Operating | 100 | 100 |
| Azelis Americas Case LLC | United States | Operating | 100 | 100 |
| Red River Specialties LLC | United States | Operating | 100 | 100 |
| C.L. Zimmerman Co. of Delaware LLC | United States | Operating | 100 | 100 |
| Ross Organic Specialty Sales Inc. | United States | Operating | 100 | 100 |
| Vigon International LLC | United States | Operating | 100 | 100 |
| Gillco Products, LCC | United States | Operating | 100 | 100 |
| Azelis Vietnam Company Ltd | Vietnam | Operating | 100 | 100 |
| MKVN Chemicals Co, Ltd | Vietnam | Operating | 100 | 51 |
| Viet Chemicals Trading and Service Company Limited | Vietnam | Operating | 100 | 51 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Companies accounted for using the equity method | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Chemlog S.A.S. | France | N/A | 50 | 50 |
The following table lists the Group\u2019s subsidiaries:
| Name | Country of incorporation | Type | % of interest 2024 | % of interest 2023 |
|---|---|---|---|---|
| Consolidated companies | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Group NV | Belgium | Non-operating | Parent company | Parent company |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Direct Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Azelis Finance NV | Belgium | Non-operating | 100 | 100 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Orkila Alg\u00e9rie spa | Algeria | Operating | 100 | 100 |
| Agspec Australia Pty Ltd | Australia | Operating | 100 | 0 |
| Azelis Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Chemcolour Industries Australia Pty Ltd | Australia | Operating | 100 | 100 |
| TimTechChem Australia Pty Ltd | Australia | Operating | 100 | 100 |
| EB1 Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Specialties Pty Limited | Australia | Operating | 100 | 100 |
| Elle Bee Exports Pty Limited | Australia | Operating | 100 | 100 |
| CW Pacific Pty Ltd | Australia | Operating | 100 | 100 |
| Chemiplas Australia Pty Ltd | Australia | Operating | 100 | 100 |
| Azelis Austria GmbH | Austria | Operating | 100 | 100 |
| Azelis Benelux N.V. | Belgium | Operating | 100 | 100 |
| Azelis EMEA Hub NV | Belgium | Operating | 100 | 100 |
| Azelis Products International SA | Belgium | Operating | 100 | 100 |
| Azelis Brasil Ltda | Brazil | Operating | 100 | 100 |
| Viveiruz Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 40 | 20 |
| Ybiap\u00ea Participa\u00e7\u00f5es Ltda. | Brazil | Operating | 100 | 100 |
| Vogler Ingredientes Ltda. | Brazil | Operating | 70 | 60 |
| Azelis Bulgaria EAD | Bulgaria | Operating | 100 | 100 |
| Azelis Canada Inc. | Canada | Operating | 100 | 100 |
| Azelis China Ltd | China | Operating | 100 | 100 |
| Azelis (Shanghai) Co. Ltd. | China | Operating | 100 | 100 |
| Azelis (Shanghai) International Trading Co., Ltd | China | Operating | 100 | 100 |
| Azelis Hong Kong Ltd | China | Operating | 100 | 100 |
| CosBond China Ltd | China | Operating | 100 | 100 |
| CosBond (Shanghai) International Trading Co. Ltd | China | Operating | 100 | 100 |
| Azelis Trading Ltd | China | Operating | 100 | 100 |
| Danxia Trading (Shanghai) Co, Ltd | China | Operating | 100 | 100 |
| Guangzhou Danxia Trading Co, Ltd | China | Operating | 100 | 100 |
| Azelis Industrial Chemical Ltd | China | Operating | 100 | 100 |
| Azelis Chemical (Guangzhou) Co. Ltd | China | Operating | 100 | 100 |
| Danxia Tianjin Co. Ltd | China | Operating | 100 | 100 |
| Danxia Shanghai Co. Ltd | China | Operating | Dissolved | 100 |
| Rocsa Colombia S.A. | Colombia | Operating | 100 | 63 |
| CI Inproquim Exports SAS | Colombia | Operating | Dissolved | 63 |
| Localpack S.A. | Colombia | Operating | 100 | 0 |
| Rocsa DCR SA | Costa Rica | Operating | 100 | 63 |
| Soluciones en Innovacion Famaceutica S A S | Colombia | Operating | 100 | 0 |
| Azelis Croatia D.O.O. | Croatia | Operating | 100 | 100 |
| Azelis CEE Holding A.S. | Czech Republic | Operating | 100 | 100 |
| Azelis Czech Republic S.R.O. | Czech Republic | Operating | 100 | 100 |
| Azelis Denmark A/S | Denmark | Operating | 100 | 100 |
| Rocsa RD SA | Dominican Republic | Operating | 100 | 63 |
| Orkila Egypt Chemicals SAE | Egypt | Operating | 99 | 99 |
| Orchem for Import and Export LLC | Egypt | Operating | 49 | 49 |
| Azelis Finland OY | Finland | Operating | 100 | 100 |
| Haarla Oy | Finland | Operating | 100 | 0 |
| Azelis France S.A.S | France | Operating | 100 | 100 |
| Azelis France Holding S.A.S | France | Operating | 100 | 100 |
| BLH SAS | France | Operating | 100 | 100 |
| NATSOE SAS | France | Operating | Merged | 100 |
| Azelis Deutschland GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Holding GmbH1 | Germany | Operating | 100 | 100 |
| Azelis Deutschland Immobilien GmbH1 | Germany | Operating | Merged | 100 |
| Azelis Deutschland Kosmetik GmbH1 | Germany | Operating | 90 | 90 |
| Azelis Chemicals Ghana Ltd | Ghana | Operating | 100 | 100 |
| Azelis Greece Single Member SA | Greece | Operating | 100 | 100 |
| Rocsa GT SA | Guatemala | Operating | 100 | 63 |
| Azelis Hungary Kft. | Hungary | Operating | 100 | 100 |
| Azelis India Private Ltd | India | Operating | 100 | 100 |
| Ashapura Aromas Private Limited | India | Operating | 70 | 70 |
| PT Azelis Indonesia Distribusi | Indonesia | Operating | 100 | 100 |
| PT Marga Dwi Kencana | Indonesia | Operating | 100 | 0 |
| Azelis Ireland Ltd. | Ireland | Operating | 100 | 100 |
| Azelis Israel Distribution Ltd | Israel | Operating | 100 | 100 |
| Lidorr Elements Ltd; | Israel | Operating | 100 | 100 |
| ProAgro Ltd; | Israel | Operating | 100 | 100 |
| Liad Agro Ltd; | Israel | Operating | 100 | 100 |
| Darbal Ltd. | Israel | Operating | 100 | 100 |
| Azelis Italia Logistica S.r.L | Italy | Operating | 100 | 100 |
| Azelis Italia S.r.L | Italy | Operating | 100 | 100 |
| Eurotrading SpA | Italy | Operating | 100 | 100 |
| Azelis C\u00f4te d'Ivoire S.A. | Ivory Coast | Operating | 100 | 100 |
| Azelis Japan K.K. | Japan | Operating | 100 | 100 |
| Azelis Jordan LLC | Jordan | Operating | 50 | 50 |
| Azelis Kenya Ltd | Kenya | Operating | 100 | 100 |
| Azelis Korea Co. Ltd | Korea | Operating | 100 | 100 |
| Azelis Middle East Africa Holding SAL | Lebanon | Operating | 100 | 100 |
| Azelis Lebanon SAL | Lebanon | Operating | 100 | 100 |
| Azelis International (Offshore) SAL | Lebanon | Operating | 100 | 100 |
| Chempart Polymers SAL Offshore | Lebanon | Operating | 100 | 100 |
| Chemical Partners Middle East SAL | Lebanon | Operating | 100 | 100 |
| Akita Topco S.\u00e0 r.l. | Luxembourg | Non-operating | 100 | 100 |
| Azelis S.A. | Luxembourg | Non-operating | 100 | 100 |
| Azelis Malaysia Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Chemical Solutions Sdn Bhd | Malaysia | Operating | 100 | 100 |
| Azelis Mexico SA de CV | Mexico | Operating | 100 | 100 |
| Azelis Morocco Sarl | Morocco | Operating | 100 | 100 |
| Orkila Invest SA | Morocco | Operating | 100 | 100 |
| Azelis Netherlands B.V. | Netherlands | Operating | 100 | 100 |
| Sirius International Detergents B.V. | Netherlands | Operating | Merged | 100 |
| Sirius International Water Treatment B.V. | Netherlands | Operating | Merged | 100 |
| Azelis Nigeria Specialty Chemicals Ltd | Nigeria | Operating | 100 | 100 |
| Azelis Norway AS | Norway | Operating | 100 | 100 |
| Azelis New Zealand Ltd | New Zealand | Operating | 100 | 100 |
| Chemiplas Agencies Ltd | New Zealand | Operating | Merged | 100 |
| Chemiplas (N.Z.) Ltd | New Zealand | Operating | Merged | 100 |
| Element Trading SAC | Peru | Operating | 100 | 63 |
| Asia Primera Kimika Inc. | Philippines | Operating | 100 | 51 |
| Phil-Asiatic Supply & Services Inc. | Philippines | Operating | 100 | 51 |
| Azelis Poland SP Z.o.o | Poland | Operating | 100 | 100 |
| Hortimex Sp. Z.o.o. | Poland | Operating | 100 | 0 |
| Azelis Romania SRL | Romania | Operating | 100 | 100 |
| Azelis Rus LLC | Russia | Operating | 100 | 100 |
| Azelis Arabia LLC | Saudi Arabia | Operating | 75 | 75 |
| Azelis Senegal SA | Senegal | Operating | 100 | 100 |
| Azelis d.o.o Beograd | Serbia | Operating | 100 | 100 |
| Azelis Singapore Pte. Ltd | Singapore | Operating | 100 | 100 |
| Bellekimia Singapore Pte. Ltd. | Singapore | Operating | 100 | 51 |
| Azelis Slovakia S.R.O. | Slovakia | Operating | 100 | 100 |
| Azelis South Africa Holding (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Azelis South Africa (Pty) Ltd. | South Africa | Operating | 85 | 85 |
| Orbichem Petrochemicals (Pty) Ltd | South Africa | Operating | 85 | 85 |
| CPS Chemical (Coatings) (Pty) Ltd | South Africa | Operating | 85 | 0 |
| Azelis Espa\u00f1a S.A. | Spain | Operating | 100 | 100 |
| Azelis Iberica Holding SL. | Spain | Operating | 100 | 100 |
| Azelis Espana Holding SL | Spain | Operating | 100 | 100 |
| Azelis Sweden AB | Sweden | Operating | 100 | 100 |
| Azelis Switzerland AG | Switzerland | Operating | 100 | 100 |
| Azelis Thailand Ltd | Thailand | Operating | 100 | 100 |
| Catalite Co. Ltd | Thailand | Operating | 100 | 51 |
| Azelis Tunisie Sarl | Tunisia | Operating | 100 | 100 |
| Azelis TR Kimya End. Ur.Ith.Ihr.Tic ve San A.S. | Turkey | Operating | 100 | 100 |
| Oktrade Kimya Sanayi ve Ticaret Anonim \u015eirketi | Turkey | Operating | Merged | 0 |
| Da\u011falt\u0131 Kau\u00e7uk ve K\u0130myev\u0130 Maddeler Sanay\u0130 T\u0130caret Anon\u0130m \u015e\u0130rket\u0130 | Turkey | Operating | Merged | 100 |
| Azelis Ukraine LLC | Ukraine | Operating | 100 | 100 |
| Orkila FZE | United Arabic Emirates | Operating | 100 | 100 |
| Azelis UK Holdings Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Ltd. | United Kingdom | Operating | 100 | 100 |
| Azelis UK Finance Ltd | United Kingdom | Operating | 100 | 100 |
| Whitfield Chemical Group Ltd | United Kingdom | Operating | Dissolved | 100 |
| Whitfield Chemical Holdings Ltd | United Kingdom | Operating | Dissolved | 100 |
| WhitChem Ltd | United Kingdom | Operating | Dissolved | 100 |
| ADAPCO LLC | United States | Operating | 100 | 100 |
| Azelis Americas LLC | United States | Operating | 100 | 100 |
| Azelis US Holding Inc. | United States | Operating | 100 | 100 |
| Dewolf Chemical LLC | United States | Operating | 100 | 100 |
| Glenn LLC | United States | Operating | 100 | 100 |
| P.T. Hutchins Company LLC | United States | Operating | 100 | 100 |
| Marcor Development LLC | United States | Operating | 100 | 100 |
| Monson Companies LLC | United States | Operating | 100 | 100 |
| Precision Control Technology LLC | United States | Operating | 100 | 100 |
| Azelis Americas Case LLC | United States | Operating | 100 | 100 |
| Red River Specialties LLC | United States | Operating | 100 | 100 |
| C.L. Zimmerman Co. of Delaware LLC | United States | Operating | 100 | 100 |
| Ross Organic Specialty Sales Inc. | United States | Operating | 100 | 100 |
| Vigon International LLC | United States | Operating | 100 | 100 |
| Gillco Products, LCC | United States | Operating | 100 | 100 |
| Azelis Vietnam Company Ltd | Vietnam | Operating | 100 | 100 |
| MKVN Chemicals Co, Ltd | Vietnam | Operating | 100 | 51 |
| Viet Chemicals Trading and Service Company Limited | Vietnam | Operating | 100 | 51 |
| \u00a0 | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Companies accounted for using the equity method | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Indirect Investments | \u00a0 | \u00a0 | \u00a0 | \u00a0 |
| Chemlog S.A.S. | France | N/A | 50 | 50 |