Annual Report 2025

3.2Financial 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 holds its cash and cash equivalents worldwide with major financial institutions that meet clear internal criteria for credit quality and financial stability. These investments generally have maturities of less than three months. Investments with maturities exceeding three months from the date of acquisition are made only with institutions that continue to satisfy Belimo’s elevated standards for creditworthiness and risk management.

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 (including contractual interest payments) 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 and through participation in the Group’s internal cash pooling arrangements.

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 110.0 million of committed credit lines (not used as at December 31, 2025). In the previous year, the total amount of CHF 110.0 million of committed credit lines were available (not used as at December 31, 2024).

Foreign Currency Risk

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

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:

The currency-related sensitivity of 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.

To limit 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 forward contracts.

Interest Rate Risk

The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term bank loans. The Group did not perform any quantitative sensitivity analysis as at December 31, 2025 and 2024 for the exposure to the risk of changes in market interest rates, as they are considered to be immaterial.

Categories of Financial Instruments 

The following table shows the carrying amounts of the Group’s financial instruments. For assets and liabilities not measured at fair value (excluding lease liabilities), the carrying amount is a reasonable approximation of fair value. In accordance with IFRS Accounting Standards, the fair value of the lease liabilities is neither calculated nor disclosed.

Other Assets/Liabilities and Financial Assets/Liabilities measured at amortized cost, by class of financial instrument, were as follows:

The fair values of the financial instruments measured at fair value and the hierarchy level for their measurement were as follows:

The derivatives as at December 31, 2025 mature in 177 days or less (2024: 178 days or less).

There were no transfers between the fair value hierarchical levels, and no purchases or sales of investments allocated to Level 3 in 2025 and 2024.

The reconciliation of the Level 3 fair values of non-current financial assets was as follows:

The unquoted equity instrument measured at fair value through OCI is allocated to Level 3 and relates to a minority 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 fair value of the equity investment has been estimated using a discounted cash flow model. The valuation requires management to make certain assumptions about the model inputs, including forecast cash flows, the discount rate, credit risk and volatility. The probabilities of the various estimates within the range can be reasonably assessed and are used in management’s estimate of fair value for the non-listed equity investment. The significant unobservable inputs used in the fair value measurement are long-term growth rate for cash flows for subsequent years of 5.0% and WACC of 16.1% (2024: long-term growth rate of 1.0% and WACC of 17.1%). In the reporting period, the Group recognized a loss of CHF 3.3 million in OCI (2024: gain of CHF 2.6 million).

The investment, measured at fair value through profit or 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.

The Group did not perform any quantitative sensitivity analyses as at December 31, 2025, 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 30.2% as at December 31, 2025 (2024: 26.4%). 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 10.00 at the Annual General Meeting 2026, which results in a pay-out ratio of 67.7% (2024: 79.6%).

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.

Alternative Performance Measures are described here.