3.1 Cash and Cash Equivalents

Cash consists of demand deposits and cash on hand. Cash equivalents include term deposits with a maturity of three months or less from the date of acquisition. The impairment assessment in the reporting period and previous year showed no need for an adjustment.

3.2 Financial Risk Management

Due to the nature of its activities, Belimo is exposed to several financial risks such as credit risk, liquidity risk, foreign currency risk, and interest rate risk.

Risk management policies are established to identify and to analyze the risks to which the Group is exposed, to define appropriate limits, to establish controls, and to monitor the risks and compliance. Risk management policies and processes are reviewed regularly to reflect changes in market conditions and in the Group’s activities. The identified risks and measures to minimize them are presented below:

Credit Risk

Belimo invests its cash and cash equivalents worldwide in deposit accounts held mainly with major, creditworthy financial institutions headquartered in Switzerland, Germany, and the United Kingdom. These deposits generally have terms of less than three months. Term deposits that have a maturity of more than three months from the date of acquisition are only held with major, creditworthy financial institutions headquartered in Switzerland and Germany. Transactions involving derivative financial instruments are traded with a limited number of major financial institutions.

The credit risk from trade receivables is limited, since the Group’s customer base is broad and spread over a variety of geographical areas. Credit risk is mainly influenced by the specific characteristics of each individual customer. The risk assessment includes an analysis of the creditworthiness, taking into account a variety of factors such as credit ratings or payment history. Credit limits are set according to regional aspects. Certain new customers are supplied only against payment in advance. The maximum default risk is the carrying amount of the individual assets as at the reporting date (see table in chapter Categories of Financial Instruments below). There are no guarantees or similar obligations that could lead to an increase in risk beyond the carrying amounts.

Liquidity Risk

At the reporting date, the contractual maturities of the undiscounted financial liabilities were as follows:

Liquidity is centrally managed and controlled by Group Treasury. The subsidiaries are adequately financed by intercompany loans to meet their ongoing commitments.

Belimo can draw down loans at fixed or floating rates for various terms, based on its short and medium-term liquidity needs. Belimo aims to preserve maximum flexibility in its liquidity planning through flexible use of the general credit lines and by staggering the maturity dates of the individual amounts. Belimo has CHF 100.0 million of committed credit lines (not used as at December 31, 2023). In the previous year, the total amount of CHF 100.0 million of committed credit lines and CHF 20.0 million of uncommitted credit lines were available (not used as at December 31, 2022).

Foreign Currency Risk 

The following table shows the main foreign exchange risk exposure for financial instruments with a currency that differs from the functional currency of the Group company holding them.

The currency-related sensitivity of these financial instruments is shown in the following table:

This analysis assumes that all other variables are held constant and takes into account hedging transactions. The same assumptions were applied in the previous year.

At the reporting date, the following currency forward instruments were held, whereas foreign currency forward contracts selling foreign currencies are disclosed as positive figures and contracts buying foreign currencies as negative figures:

In order to limit the foreign exchange risk, Belimo primarily aims to achieve natural hedging by matching cash inflows and outflows in a specific currency as far as possible. Belimo has centralized its foreign exchange management in Switzerland. Within EMEA, invoices between Group companies are mainly denominated in the currency of the company receiving the invoice. Other subsidiaries of Belimo hedge their currency risk through other intercompany transactions, thus ensuring efficient risk management as currency flows can be offset within the Group as far as possible. Its net currency positions are hedged on a rolling basis by the Swiss companies, usually by entering into forward contracts.

Interest Rate Risk 

The interest-bearing financial assets and liabilities held by the Group mainly relate to cash, cash equivalents, term deposits, and lease liabilities. Belimo therefore has no material exposure to an interest rate risk. 

Categories of Financial Instruments 

The following tables summarize all financial instruments classified by categories according to IFRS 9:

The derivative financial instruments as at December 31, 2023, mature in 179 days or less (2022: 179 days or less).

The unquoted equity instrument measured at fair value through OCI is allocated to level 3 and relates to an immaterial investment in an innovative start-up in the heating, ventilation, and air-conditioning systems sector. It was designated as investment at fair value through OCI because this equity instrument represents an investment that the Group intends to hold over the long term for strategic purposes. 

The investment measured at fair value through profit and loss allocated to level 3 belongs to a simple agreement for future equity in a start-up in the heating, ventilation, and air-conditioning systems sector.

In 2023 and 2022, there were no transfers between the fair value hierarchical levels.

The Group did not perform any quantitative sensitivity analysis as at December 31, 2023 and 2022 for the financial instruments measured at fair value, as they are considered to be immaterial.

Capital Management

Belimo aims to maintain an equity ratio that is in line with its strategy and that will remain stable over time to secure the confidence of investors, creditors, and other market players, and to strengthen the future development of its business activities. This entails refinancing that is adapted to the asset structure, and an equity-to-liability ratio that is adequate to the level of risk.

The Board of Directors monitors the shareholder structure and the return on equity. Belimo strives for a diversified and international shareholder base. The return on equity was 26.0% as at December 31, 2023 (2022: 23.8%). The Board of Directors strives to pay a stable or increasing dividend per share, but it may diverge from this policy depending on business development, corporate financing needs, general economic conditions as well as legal and contractual constraints. The Board of Directors of BELIMO Holding AG will propose a dividend of CHF 8.50 at the Annual General Meeting 2024, which results in a pay-out ratio of 76.3% (2022: 85.1%).

Belimo can buy or sell treasury shares on the market. Its current holdings of treasury shares are not earmarked for any specific purpose and can be sold on the market at any time.

The Alternative Performance Measures are described here.

3.3 Financial Assets and Liabilities

Financial Assets

Term deposits consist of bank deposits with maturities of more than three but less than twelve months from the date of acquisition. Other financial assets primarily comprise deposits relating to lease agreements for the business premises of various Group companies as well as loans to finance Belimo distribution companies. Investments comprise an immaterial investment as well as a simple agreement for future equity in innovative start-ups in the heating, ventilation, and air-conditioning systems sector. In 2023, an immaterial valuation allowance has been recognized (2022: immaterial valuation allowance).

Financial Liabilities

The changes in financial liabilities were as follows:

Interest paid not related to financial liabilities and therefore not included in the table above amounted to CHF 0.3 million (2022: CHF 0.2 million).

3.4 Financial Result

3.5 Shareholder’s Equity and Earnings per Share

As per the resolution of the Annual General Meeting of BELIMO Holding AG held on March 27, 2023, a dividend of CHF 8.50 per registered share (2022: CHF 8.50) was paid out on March 31, 2023. In total, a dividend payment of CHF 104.5 million (2022: CHF 104.5 million) was made. 

The average number of outstanding shares is calculated based on the number of shares issued, less the average number of treasury shares held.

Share Capital

The share capital of BELIMO Holding AG consists of one class of voting rights.

Treasury Shares

Reserves and Retained Earnings