EMS CHEMIE : Finance report 2023

EMS Group

Financial Statements 2023

Contents

Share Performance	1
Key Figures 2019 - 2023	2
Consolidated Income Statement and
Consolidated Statement of Comprehensive Income	3
Consolidated Balance Sheet	4
Consolidated Statement of Changes in Equity	5
Consolidated Statement of Cash Flows	6
Notes to the Consolidated Financial Statements	7
Report on the Audit of the Consolidated Financial Statements ....	34

EMS Group

Financial Statements 2023

Share Performance

			2023		2022	2021	2020	2019
Number of registered shares	23'389'028		23'389'028	23'389'028	23'389'028	23'389'028
	Shares entitled to dividend	23'389'028		23'389'028	23'389'028	23'389'028	23'389'028
	Treasury shares	0		0	0	0	0
Information per share (in CHF):
	Dividend per share	16.00	1)	20.00	21.00	17.00	20.00
		Of which ordinary dividend	12.75		15.75	16.50	13.00	15.60
		Of which extraordinary dividend	3.25		4.25	4.50	4.00	4.40
	Earnings per share	19.56		22.75	23.53	18.57	22.54
	Cash flow per share 2)	24.65		15.64	22.16	20.16	23.61
	Equity per share 3)	74.47		77.63	76.91	68.32	71.09
	Stock prices 4)
		High	801.00		1'046.00	1'035.00	880.00	646.50
		Low	599.50		591.50	793.50	496.60	458.00
		At December 31	681.00		626.00	1'021.00	853.00	636.50
Market capitalization at
December 31 (CHF millions)	15'927.9		14'641.5	23'880.2	19'950.8	14'887.1

Registered shares are listed at the SIX Swiss Exchange.

	Security number	ISIN	Investdata / Reuters
EMS-CHEMIE	1.644.035	CH0016440353	EMSN

1. Proposal of the Board of Directors.
2. Cash flow = Cash flow from operating activities
3. Excluding non-controlling interests.
4. Source: SIX Swiss Exchange AG.

1/37

EMS Group

Financial Statements 2023

Key Figures 2019 - 2023

CHF millions	2023	2022	2021	2020	2019
Net sales	2'189.0	2'441.9	2'253.8	1'802.3	2'152.7
	Change in % versus previous year	-10.4%	+8.3%	+25.1%	-16.3%	-7.1%
	Change in local currencies	-4.6%	+12.6%	+24.6%	-4.8%	-2.1%
	Of which in Switzerland	2.9%	4.0%	3.8%	4.0%	3.7%
Net operating income (EBIT)	492.6	611.1	640.3	515.1	623.7
	Change in % against previous year	-19.4%	-4.6%	+24.3%	-17.4%	+0.6%
	In % of net sales	22.5%	25.0%	28.4%	28.6%	29.0%
Net financial income	-0.6	-4.5	1.0	-4.4	-3.5
Income taxes	30.7	71.7	88.5	71.1	88.4
Net income	461.2	534.9	552.9	439.7	531.9
	Change in % against previous year	-13.8%	-3.3%	+25.8%	-17.3%	+1.8%
	In % of net sales	21.1%	21.9%	24.5%	24.4%	24.7%
Cash Flow 1)	576.5	365.9	518.3	471.5	552.1
	Change in % against previous year	+57.6%	-29.4%	+9.9%	-14.6%	+10.6%
	In % of net sales	26.3%	15.0%	23.0%	26.2%	25.6%
Investments	49.4	94.0	79.9	48.3	62.9
	In % of cash flow	8.6%	25.7%	15.4%	10.2%	11.4%
Total assets	2'167.2	2'316.0	2'324.7	2'077.5	2'213.3
Assets
	Current assets	1'375.4	1'570.6	1'622.8	1'399.5	1'547.7
	Non-current assets	791.7	745.4	701.9	678.0	665.6
Equity and liabilities
	Current liabilities	293.2	373.8	380.2	290.7	351.9
	Non-current liabilities	105.3	97.8	116.1	162.6	175.8
	Equity 2)	1'741.8	1'815.8	1'798.9	1'597.8	1'662.7
		Balance sheet equity ratio	80.4%	78.4%	77.4%	76.9%	75.1%
		Return on equity	26.3%	29.3%	30.6%	27.2%	31.7%
Number of employees at December 31 3)	2'736	2'693	2'646	2'521	2'648

1. Cash flow = Cash flow from operating activities
2. Excluding non-controlling interests.
3. Excluding apprentices (2023: 134; 2022: 136; 2021: 134; 2020: 132; 2019: 129).

2/37

EMS Group

Financial Statements 2023

Consolidated Income Statement

			2023	2022
		Notes	(CHF '000)	(CHF '000)
	Net sales		2'188'967	2'441'909
	Inventory changes, semi-finished and finished goods		(103'797)	132'963
	Capitalized costs and other operating income	1	24'011	33'178
	Material expenses		(1'207'736)	(1'581'670)
	Personnel expenses	2	(236'881)	(246'369)
	Other operating expenses	3	(122'388)	(118'517)

Earnings before interest, tax, depreciation and amortization (EBITDA)		542'176	661'494
	Depreciation and amortization	8	(49'625)	(50'424)
Net operating income (EBIT)		492'551	611'070
	Financial income	5	5'160	905
	Financial expenses	6	(5'778)	(5'426)
Net income before taxes		491'933	606'549
	Income taxes	7	(30'730)	(71'694)
Net income		461'203	534'855
Of which attributable to:
	Shareholders of EMS-CHEMIE HOLDING AG		457'578	532'100
	Non-controlling interests	20	3'625	2'755
Earnings per share in CHF:
	Basic	18	19.56	22.75
	Diluted	18	19.56	22.75

Consolidated Statement of Comprehensive Income

	Net income		461'203	534'855
		Actuarial gains from defined benefit pension plans,
		net of tax		(3'012)	812
	Items that will not be reclassified to income statement, net of tax		(3'012)	812
		Net changes from cash flow hedges, net of tax	15	(14'158)	4'228
		Currency translation differences		(49'757)	(31'022)
	Items that are or may be reclassified to profit or loss		(63'915)	(26'794)
	Other comprehensive income		(66'927)	(25'982)
Comprehensive income		394'276	508'873
of which attributable to:
	Shareholders of EMS-CHEMIE HOLDING AG		393'811	508'011
	Non-controlling interests	20	465	862

Reference numbers indicate corresponding Notes to the Consolidated Financial Statements.

3/37

EMS Group

Financial Statements 2023

Consolidated Balance Sheet

				31.12.	31.12.
				2023	2022
			Notes	(CHF '000)	(CHF '000)
Non-current assets		791'738	745'409
	Intangible assets	8	57'122	58'791
	Property, plant and equipment	8	600'188	607'526
	Rights of use of leased assets	8	10'270	13'177
	Investments		215	188
	Other non-current assets	9	29'775	35'372
	Other non-current financial instruments	10	1'300	8'676
	Deferred income tax assets	7	92'868	21'679
Current assets		1'375'414	1'570'591
	Inventories	11	493'891	677'734
	Trade receivables	12	297'026	333'078
	Income tax assets		7'143	8'460
	Other current assets	13	91'744	170'770
	Derivative and other financial assets	14, 15	221'227	131'984
	Cash and cash equivalents	16	264'383	248'565
Total assets		2'167'152	2'316'000
Equity		1'768'587	1'844'389
	Equity, attributable to shareholders of EMS-CHEMIE HOLDING AG		1'741'818	1'815'788
		Share capital	17	234	234
		Retained earnings and reserves		1'741'584	1'815'554
	Equity, attributable to non-controlling interests	20	26'769	28'601
Liabilities		398'565	471'611
	Non-current liabilities		105'320	97'821
		Non-current financial liabilities	21	4'655	8'904
		Deferred income tax liabilities	7	85'083	72'388
		Employee benefit liability	22	8'976	9'659
		Non-current derivative financial instruments	15	0	24
		Provisions	23	6'606	6'846
	Current liabilities		293'245	373'790
		Current derivative financial instruments	15	0	11
		Current financial liabilities	21	27'682	4'620
		Trade payables		95'744	131'556
		Income tax liabilities		87'653	98'594
		Provisions	23	3'766	1'694
		Other current liabilities	24	78'400	137'315
Total equity and liabilties		2'167'152	2'316'000

Reference numbers indicate corresponding Notes to the Consolidated Financial Statements.

4/37

EMS Group

Financial Statements 2023

Consolidated Statement of Changes in Equity

						Equity
						attributable
						to share-
						holders of	Equity
						EMS-	attributable
						CHEMIE	to non-
	Share	Capital	Retained	Hedging	Translation	HOLDING	controlling
(CHF '000)	capital	reserves	earnings	reserves	differences	AG	interests	Equity
At 31.12.2021	234	25'676	1'893'839	28'387	(149'189)	1'798'947	29'380	1'828'327
Net changes from cash flow hedges				4'228		4'228		4'228
Actuarial gains from
defined benefit pension plans			812			812		812
Currency translation differences					(29'129)	(29'129)	(1'893)	(31'022)
Other comprehensive income			812	4'228	(29'129)	(24'089)	(1'893)	(25'982)
Net income			532'100			532'100	2'755	534'855
Comprehensive income	0	0	532'912	4'228	(29'129)	508'011	862	508'873
Dividends paid			(491'170)			(491'170)	(1'641)	(492'811)
At 31.12.2022	234	25'676	1'935'581	32'615	(178'318)	1'815'788	28'601	1'844'389
Net changes from cash flow hedges				(14'158)		(14'158)		(14'158)
Actuarial gains from
defined benefit pension plans			(3'012)			(3'012)		(3'012)
Currency translation differences					(46'597)	(46'597)	(3'160)	(49'757)
Other comprehensive income			(3'012)	(14'158)	(46'597)	(63'767)	(3'160)	(66'927)
Net income			457'578			457'578	3'625	461'203
Comprehensive income	0	0	454'566	(14'158)	(46'597)	393'811	465	394'276
Dividends paid			(467'781)			(467'781)	(2'297)	(470'078)
At 31.12.2023	234	25'676	1'922'366	18'457	(224'915)	1'741'818	26'769	1'768'587
							2023	2022
Equity attributable to shareholders of EMS-CHEMIE HOLDING AG, in % of total assets				80.4%	78.4%

Capital reserves are not eligible for distribution. Retained earnings include KCHF 47 (2022: KCHF 47) not eligible for distribution. On February 9, 2024, the company announced that the Board of Directors will propose a dividend payment of CHF 16.00 per each share to the ordinary annual shareholder meeting on August 10, 2024 (CHF 12.75 ordinary dividend, CHF 3.25 extraordinary dividend).

For further information and data refer to page 1, "Share Performance".

5/37

EMS Group

Financial Statements 2023

Consolidated Statement of Cash Flows

			2023	2022
		Notes	(CHF '000)	(CHF '000)
	Net income		461'203	534'855
	Depreciation, amortization and impairment of intangible assets, property, plant and
	equipment and right of use of leased assets	8	49'625	50'424
	Loss from disposal of property, plant and equipment, net	3	555	95
	Increase/(decrease) of provisions	23	2'158	(12'485)
	Unrealized currency translation (gains)/losses on foreign exchange positions		9'177	10'337
	Change assets and liabilities of post-employment benefits, net	22	(3'936)	(2'872)
	Net interest income	5, 6	(4'304)	(136)
	Expenses for income taxes	7	30'730	71'694
	Changes in net working capital		129'362	(210'390)
	Taxes paid		(97'253)	(74'429)
	Interest paid		(801)	(752)
	Provisions used	23	(47)	(448)

Cash flow from operating activities		576'469	365'893
	Purchase of intangible assets and property, plant and equipment	8	(49'390)	(93'966)
	Disposal of intangible assets and property, plant and equipment	8	480	458
	Decrease in other non-current assets	9	128	166
	Interest received		2'414	834
	Paid withholding taxes	13	0	(236'694)
	Received withholding taxes	13	42'749	710'082
	Investments of current financial assets	14	(98'150)	(105'177)

Cash flow from investing activities		(101'769)	275'703
	Dividends paid to shareholders of EMS-CHEMIE HOLDING AG		(467'781)	(491'170)
	Dividends paid to non-controlling interests	20	(2'297)	(1'641)
	Repayment of leasing liabilities	21	(4'407)	(4'736)
	Proceeds from bank loans	21	23'249	0
	Repayment of bank loans	21	0	(2'944)
Cash flow from financing activities		(451'236)	(500'491)
Increase/(decrease) in cash and cash equivalents		23'464	141'105
Cash and cash equivalents at 1.1.		248'565	110'595
Translation difference on cash and cash equivalents		(7'646)	(3'135)
Cash and cash equivalents at 31.12.	16	264'383	248'565
Reference numbers indicate corresponding Notes to the Consolidated Financial Statements.

6/37

EMS Group

Financial Statements 2023

Notes to the Consolidated Financial Statements

Consolidated accounting principles

General information on the consolidated financial statements

The consolidated financial statements give a true and fair view of the financial position, the results of operations and the cash flows of the EMS Group. The consolidation is based on individual financial statements of subsidiaries prepared according to uniform Group accounting principles and in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB). They also comply with Swiss law.

The preparation of consolidated financial statements and related disclosures in conformity with IFRS requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the reporting date and revenues and expenses during the reporting period. Actual results may differ from those estimates. Estimates and assumptions are reviewed periodically, and the effects of revisions are reflected in the financial statements in the period in which they are determined to be necessary.

Due to rounding, numbers presented throughout this report may not add up precisely to the totals provided. All ratios and variances are calculated using the underlying amount rather than the presented rounded amount.

Significant estimates and assumptions made by management

Impairment of non-current assets

To ascertain whether impairment has occurred, estimates are made of the expected future cash flows arising from the use and possible disposal of such assets. Significant assumptions are made in relation to such calculations, including sales figures, margins and discounting rates. It is also possible for useful life expectancies to be reduced, the intended use of property, plant and equipment to change, production sites to be relocated or closed, and production plants to generate lower-than-expected sales in the medium term. The carrying amounts for property, plant and equipment and intangible assets are shown in note 8.

Provisions for litigation risks, environmental risks and other provisions

In the course of their ordinary business operations, Group companies may be involved in legal proceedings. If considered necessary, provisions for litigation risks, environmental risks and other provisions are measured using available information on the basis of the realistically expected net cash outflow. Other provisions primarily cover warranty claims arising from the sale of goods or services. Future reporting periods may therefore be affected by changes in the estimates of expected or actual cash outflows. The carrying amounts for provisions are shown in note 23.

Employee benefits

The EMS Group operates various retirement plans on behalf of its employees. In the case of defined benefit plans, statistical assumptions are made in order to estimate future developments. When parameters alter due to changes in the economic situation or different market conditions, subsequent results may differ significantly from the

7/37

EMS Group

Financial Statements 2023

actuarial opinions and calculations. The carrying amounts of reported employee retirement assets and liabilities are shown in note 22.

Taxes

Measurement of current direct and indirect tax liabilities is subject to interpretation of the tax legislation in the countries concerned. The accuracy of tax declarations and appropriateness of liabilities are judged in the context of final assessments or inspections by the tax authorities. Furthermore, the judgment as to whether tax-loss carry forwards can be capitalized requires critical assessment of their usability in terms of netting with future profits, which are dependent on numerous imponderables. The book values of the current deferred income tax assets and deferred income tax liabilities are shown in note 7. The current deferred income tax assets and deferred income tax liabilities are shown in the balance sheet on a separate line.

Inventories

Purchased inventories are measured at cost, while internally generated products are measured at manufacturing cost. Besides individual costs, the cost of production also includes a proportionate allocation of manufacturing overheads. Based on a range analysis, items with a slow turnover rate are written down by 20% to 100%.

Changes in accounting policies

In 2023, the EMS Group has implemented various minor amendments to existing standards and interpretations, which have no material impact on the Group's overall results and financial position.

Consistency

The principles of valuation and consolidation remain unchanged from the previous year, except for the changes described above. Due to changed disclosure definitions in the notes prior year figures have been reallocated where necessary.

Scope of consolidation

The scope of consolidation includes all companies in and outside Switzerland which are controlled - directly or indirectly - by EMS-CHEMIE HOLDING AG, either by it holding more than 50% of the voting rights or by contracts or other agreements (see note 31 "List of subsidiaries"). The equity method of accounting is applied in the case of associated companies that are not directly or indirectly controlled by EMS-CHEMIE HOLDING AG (ownership normally between 20% and 50% of voting rights).

Method of consolidation

The financial statements of majority-owned companies are fully consolidated. Assets and liabilities, income and expenses are incorporated in full. Capital consolidation is effected using the acquisition method. Intercompany transactions and relations have been eliminated in the course of consolidation. Unrealized profits from intercompany deliveries are eliminated in the income statement. All assets and liabilities of acquired companies are valued at fair value at the time of acquisition. Any positive difference between the resulting fair value of the net assets and contingent liabilities acquired and the cost of acquisition is capitalized as goodwill. Results for acquired companies are included in consolidation as from the date on which control was transferred.

Changes in a parent's ownership interest in a subsidiary that do not result in a loss of

8/37