1.2 Personnel Expenses
As at December 31, 2023, Belimo had 2’260 (2022: 2’163) full-time equivalent employees, of whom 889 (2022: 890) were located in Switzerland.
in CHF 1'000 |
|
2023 |
|
2022 |
|
|
|
|
|
Wages and salaries |
|
-191'005 |
|
-177'721 |
Expenses for share-based payments |
|
-1'294 |
|
-1'172 |
Social security contributions |
|
-26'907 |
|
-24'471 |
Defined benefit expenses |
|
-5'707 |
|
-9'180 |
Defined contribution expenses |
|
-6'023 |
|
-5'920 |
Other personnel expenses |
|
-11'557 |
|
-14'037 |
Total |
|
-242'493 |
|
-232'502 |
Other personnel expenses comprised costs of staff recruitment, training and development as well as company events and external staff costs.
Share-Based Payments
The employee share purchase plan granted eligible employees in Switzerland, Germany, Canada, the United States, Hong Kong, and China the option of purchasing Belimo shares up to a maximum of 20% of their variable remuneration or between one and ten shares. For the members of the Executive Committee, the mandatory contribution to the employee share purchase plan amounted to 40% of the variable remuneration paid in December 2023, with the option to voluntarily further participate up to 100% of the variable remuneration paid in December 2023. The employee share purchase plan did not change compared to the previous year.
The relevant parameter for share-based payments were as follows:
|
|
|
|
2023 |
|
2022 |
|
|
|
|
|
|
|
Number of shares granted |
|
Number |
|
8'665 |
|
8'972 |
Share price at grant date |
|
in CHF |
|
441.20 |
|
435.50 |
Fair value of share-based payment element at grant date |
|
in CHF |
|
147.97 |
|
130.65 |
|
|
|
|
|
|
|
Cash contribution share-based payments |
|
in CHF 1'000 |
|
538 |
|
661 |
Deferred compensation share-based payments 1) |
|
in CHF 1'000 |
|
1'991 |
|
2'074 |
Total contribution by employees |
|
in CHF 1'000 |
|
2'529 |
|
2'735 |
|
|
|
|
|
|
|
Expenses for share-based payments |
|
in CHF 1'000 |
|
1'294 |
|
1'172 |
1) Employee contribution settled through salary deductions, treated in the cash flow statement as non-cash transaction.
The share purchase plan gives the employees of Belimo (including members of the Executive Committee) an opportunity to purchase shares of BELIMO Holding AG at preferential conditions. These shares are subject to a restriction period of three years.
The share-based payment transactions are classified as equity-settled share-based payments in accordance with IFRS 2. The cost of equity-settled transactions is measured with reference to the fair value at the date on which they are granted. The fair value is determined indirectly, based on observable market prices of the shares of BELIMO Holding AG, reduced by the contribution of the employee. Upon transfer of the shares, the employee will have full shareholder rights (including voting and dividend rights) and as such, the restriction period has no impact on the fair value. The fair value is not subsequently re-measured after the grant date. The purchase price per share shall generally be equivalent to 70% of the lower of the average closing price one month before the purchase date or the closing price at the purchase date of BELIMO Holding AG shares at the SIX Swiss Exchange.
The shares are granted with the final approval of the execution of the share-based payment transactions by the Board of Directors close before or at the purchase date. The Board of Directors may amend, suspend, or terminate the employee share purchase plan at any time in any respect the Board of Directors deems necessary or advisable. No purchase rights may be granted under the employee share purchase plan while the employee share purchase plan is suspended or after it is terminated. The plan includes a vesting condition (service condition between the grant date and the purchase date), but no option features.
Non-Current Employee Benefits
Non-current employee benefits contain post-employment benefits and other long-term employee benefits. The only significant post-employment defined benefit plan exists in Switzerland. The employees in Switzerland are insured under the Belimo pension plan against the risks of old age, death, and disability.
Other long-term employee benefits mainly include jubilee provisions.
in CHF 1'000 |
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
Other long-term employee benefits |
|
5'539 |
|
5'168 |
Non-current employee benefit liabilities |
|
5'539 |
|
5'168 |
Swiss pension schemes are governed by the Swiss Federal Law on Occupational Retirement, Survivors‘ and Disability Pension Plans (BVG), and their implementing regulations. The BVG defines the minimum and maximum insured salary, the minimum retirement credits, as well as the interest rate applied to these credits and the conversion rate. Based on these legal provisions and the plan structure, the employer is exposed to actuarial risks such as investment risk, interest rate risk and the risk of disability, as well as the risk of longevity. The employee and employer contributions are defined by the Board of Trustees of the foundation. In the event of statutory underfunding, measures for its elimination must be taken. Possible measures could be an adjustment to the conversion rate or restructuring contributions from both the employer and the employees.
The Swiss pension plan is organized via an autonomous foundation. The plan is classified as a defined benefit plan in accordance with IAS 19 and as a defined contribution plan in accordance with the BVG. The most senior management body is the Board of Trustees, which is composed of an equal number of employee and employer representatives. It is legally obliged to act in the interests of the plan participants. The Board of Trustees is responsible for defining the investment strategy, effecting changes to the post-employment benefit plan regulations, and determining the funding of pension plan benefits. The investment strategy is reviewed at least once a year.
Employer contributions to the pension scheme are defined in the applicable regulations as a fixed percentage of the insured salaries and include both savings and risk components. Retirement benefits are determined based on the retirement savings capital held at the time of retirement. The insured individual can choose between a lifelong annuity and a lump sum payment. The annuity is calculated by multiplying the retirement savings capital by the conversion rate as defined in the regulations. The annual retirement contributions and interest thereon are credited to the retirement savings capital. When employees leave the Company, their retirement savings capital is transferred to the pension scheme of the new employer or to a vested benefits account.
Development
The movements in the net defined benefit asset/liability were as follows:
|
|
2023 |
|
2022 |
||||||||||||
in CHF 1'000 |
|
Defined benefit obligations |
|
Fair value of plan assets |
|
Asset ceiling |
|
Net defined benefit asset/ (liability) |
|
Defined benefit obligations |
|
Fair value of plan assets |
|
Asset ceiling |
|
Net defined benefit asset/ (liability) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at January 1 |
|
-286'531 |
|
320'094 |
|
-33'565 |
|
- |
|
-327'061 |
|
362'997 |
|
-35'936 |
|
- |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements included in the income statement |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Current service costs |
|
-5'707 |
|
|
|
|
|
-5'707 |
|
-9'180 |
|
|
|
|
|
-9'180 |
Interest result (net) |
|
-6'712 |
|
7'562 |
|
-772 |
|
78 |
|
-1'170 |
|
1'300 |
|
-126 |
|
4 |
Total movements included in the income statement |
|
-12'419 |
|
7'562 |
|
-772 |
|
-5'629 |
|
-10'351 |
|
1'300 |
|
-126 |
|
-9'176 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Movements included in other comprehensive income |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in financial assumptions |
|
-30'416 |
|
|
|
|
|
-30'416 |
|
73'604 |
|
|
|
|
|
73'604 |
Experience adjustments |
|
1'033 |
|
|
|
|
|
1'033 |
|
-17'110 |
|
|
|
|
|
-17'110 |
Return on plan assets (excluding interest income) |
|
|
|
18'184 |
|
|
|
18'184 |
|
|
|
-61'284 |
|
|
|
-61'284 |
Change in asset ceiling (excluding interest expense) |
|
|
|
|
|
4'404 |
|
4'404 |
|
|
|
|
|
2'497 |
|
2'497 |
Total movements included in other comprehensive income |
|
-29'382 |
|
18'184 |
|
4'404 |
|
-6'794 |
|
56'494 |
|
-61'284 |
|
2'497 |
|
-2'293 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other movements |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Employer contributions |
|
|
|
12'424 |
|
|
|
12'424 |
|
|
|
11'469 |
|
|
|
11'469 |
Employee contributions |
|
-9'044 |
|
9'044 |
|
|
|
- |
|
-8'332 |
|
8'332 |
|
|
|
- |
Benefits paid from plan assets |
|
4'099 |
|
-4'099 |
|
|
|
- |
|
2'719 |
|
-2'719 |
|
|
|
- |
Total other movements |
|
-4'945 |
|
17'369 |
|
- |
|
12'424 |
|
-5'613 |
|
17'082 |
|
- |
|
11'469 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As at December 31 |
|
-333'277 |
|
363'209 |
|
-29'933 |
|
- |
|
-286'531 |
|
320'094 |
|
-33'565 |
|
- |
In 2023, the return on plan assets (including interest income) of CHF 25.7 million (2022: CHF -60.0 million), an actuarial loss on the defined benefit obligation of CHF -29.4 million (2022: gain of CHF 56.5 million), as well as other movements of CHF -0.1 million (2022: CHF 1.1 million) led to a total surplus of CHF 29.9 million (2022: surplus of CHF 33.6 million). The asset ceiling, being the economic benefits available in the form of reduction in future contribution to the Swiss pension plan, was zero in the reporting period (2022: zero). Therefore, the surplus was not recognized as a non-current asset as at December 31, 2023 and 2022.
There were no significant unfunded plans in the reporting period (2022: none).
The weighted average duration of the defined benefit obligations is 12.9 years (2022: 12.0 years). The expected employer contributions for 2024 amount to CHF 12.4 million.
Investment Portfolio
The major categories of plan assets were as follows:
|
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
Bonds |
|
40.4% |
|
39.9% |
Shares |
|
35.0% |
|
35.3% |
Real estate |
|
23.8% |
|
24.0% |
Cash and cash equivalents |
|
0.7% |
|
0.8% |
Total |
|
100.0% |
|
100.0% |
The shares and bonds have quoted market prices on an active market. Real estate includes listed real estate funds and an investment in a Swiss real estate investment foundation. The investment strategy ensures the availability of liquidity at all times. The Group does not use any pension scheme assets.
Actuarial Assumptions and Sensitivity Analysis
The following principal actuarial assumptions were applied:
|
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
Discount rate |
|
1.50% |
|
2.30% |
Interest rate used in projecting retirement benefits |
|
1.50% |
|
1.50% |
Expected salary increases |
|
1.50% |
|
1.50% |
Mortality tables |
|
BVG 2020 GT–CMI 1) |
|
BVG 2020 GT–CMI 1) |
Long-term rate of mortality improvement |
|
1.25% |
|
1.25% |
Life expectancy as at age of 65 in years: |
|
|
|
|
Active employees (female/male) |
|
26.58/25.07 |
|
25.21/23.46 |
Pensioners (female/male) |
|
24.59/22.82 |
|
23.55/21.83 |
1) Continuous Mortality Investigation Model (CMI)
The following sensitivity analysis shows the impact of a reasonably possible change in the principal actuarial assumptions on the present value of the defined benefit obligations at the reporting date. Each change was analyzed separately. Interdependencies were not considered.
|
|
December 31, 2023 |
|
December 31, 2022 |
|
|
|
|
|
Increase (+)/decrease (-) of the present value of defined benefit obligations |
|
|
|
|
|
|
|
|
|
Discount rate |
|
|
|
|
Increase by 50 basis points 1) |
|
-6.0% |
|
-2.2% |
Decrease by 50 basis points 1) |
|
6.8% |
|
3.0% |
|
|
|
|
|
Interest rate used in projecting retirement benefits |
|
|
|
|
Increase by 50 basis points 1) |
|
2.5% |
|
1.2% |
Decrease by 50 basis points 1) |
|
-2.4% |
|
-1.1% |
|
|
|
|
|
Expected salary increases |
|
|
|
|
Increase by 50 basis points |
|
0.6% |
|
0.5% |
Decrease by 50 basis points |
|
-0.6% |
|
-0.8% |
|
|
|
|
|
Life expectancy |
|
|
|
|
Increase by 1 year |
|
1.9% |
|
1.6% |
Decrease by 1 year |
|
-1.9% |
|
-1.7% |
1) Previous year increase/decrease by 25 basis points
The determination of post-employment retirement benefit obligations requires an estimation of the future service periods, the development of future salaries and pensions, interest accruing on the employee savings accounts, the timing of contractual pension benefit payments, and the employees’ share of the funding shortfall. This evaluation is made based on prior experience and anticipated future trends. Anticipated future payments are discounted with the yields of Swiss franc-denominated corporate bonds from domestic and foreign issuers quoted on the Swiss Exchange with an AAA or AA rating. The discount rates match the anticipated payment maturities of the liabilities.
The present value of the defined benefit obligations and the fair value of the plan assets are determined annually by independent actuaries for each plan and are recognized as a net defined benefit asset/liability. The present values of the defined benefit obligations are calculated using the projected unit credit method.
Defined benefit costs recognized in the income statement include current service costs (service costs in the reporting period), past service costs (gains/losses from plan amendments and curtailments), and gains/losses on settlements. The net interest result (multiplication of the net defined benefit asset/liability and the effect of the asset ceiling with the discount rate) is recognized in the financial result. Remeasurement of the net defined benefit asset/liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest), and the effect of the asset ceiling (excluding interest), are recognized in other comprehensive income and are not reclassified subsequently to the income statement. Asset surpluses are considered only to the extent of possible future reimbursement or reduction of contributions in accordance with IFRIC 14.