(27) Other provisions
Other provisions developed as follows:
€ million |
|
Litigation |
|
Restructuring |
|
Environmental protection |
|
Acceptance and |
|
Interest and penalties related to income tax |
|
Other |
|
Total |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Jan. 1, 2025 |
|
65 |
|
147 |
|
158 |
|
162 |
|
94 |
|
136 |
|
761 |
Additions |
|
46 |
|
135 |
|
21 |
|
51 |
|
64 |
|
73 |
|
391 |
Utilizations |
|
-30 |
|
-90 |
|
-8 |
|
-51 |
|
-3 |
|
-22 |
|
-203 |
Release |
|
-16 |
|
-24 |
|
-30 |
|
-79 |
|
-9 |
|
-28 |
|
-186 |
Interest effect |
|
– |
|
– |
|
-7 |
|
– |
|
– |
|
– |
|
-6 |
Currency translation |
|
-2 |
|
-3 |
|
– |
|
-1 |
|
-3 |
|
-6 |
|
-15 |
Changes in scope of consolidation/Other |
|
– |
|
-2 |
|
-1 |
|
– |
|
– |
|
1 |
|
-2 |
Reclassification to liabilities directly related to assets held for sale |
|
– |
|
– |
|
– |
|
– |
|
– |
|
-1 |
|
-1 |
Dec. 31, 2025 |
|
63 |
|
163 |
|
133 |
|
83 |
|
144 |
|
154 |
|
740 |
thereof: current |
|
54 |
|
88 |
|
27 |
|
65 |
|
144 |
|
103 |
|
481 |
thereof: non-current |
|
9 |
|
76 |
|
106 |
|
17 |
|
– |
|
51 |
|
259 |
Accounting and measurement policies
Provisions for litigation
To assess a recognition obligation in relation to provisions for litigation and to quantify future outflows of resources, the Group draws on the knowledge of the legal department as well as outside counsel.
Assessing the need for recognizing provisions for litigation is based on the likelihood of possible outcomes for proceedings. In particular, the factors influencing this likelihood are:
The validity of the arguments brought forward by the opposing party, and
The legal situation and current court rulings in comparable proceedings in the jurisdiction in question.
The following factors are also relevant in measuring provisions for litigation:
The duration of proceedings in pending legal disputes and the associated legal costs
The usual damages and fines for comparable legal disputes, and
The discount factor to be used
Provisions for restructuring
The Group uses formal restructuring plans and the expectations of the affected employees concerning the performance of the restructuring measures to assess the recognition obligation for provisions for restructuring projects and the amount of the expected outflow of resources.
Provisions for environmental protection
To assess a recognition obligation in relation to provisions for environmental protection and to quantify future outflows of resources, the Group draws on appraisals by independent external experts and the knowledge of in-house specialists.
The following are key parameters in calculating the present value of the future settlement amount of provisions for environmental protection:
The future settlement date
The extent of environmental damage
The applicable remediation methods
The associated future costs, and
The discount factor
Provisions for acceptance and follow-on obligations
The assessment of the recognition obligation for provisions for acceptance and follow-on obligations and the quantification of future outflows of resources is based on internal project plans as well as on the assessment of the respective matters by in-house and external specialists.
The main parameters in determining the amount of the provision are:
The ability to use or potential for modification of secured manufacturing capacities at third-party providers, particularly for pharmaceutical compounds
The number of affected patients and the expected duration of their continued treatment in clinical development programs
The expected date or period of the outflow of resources, and
The expectations concerning future events influencing the obligations
Provisions for interest and penalties related to income taxes
Objective assessments are performed to determine the need to recognize provisions for interest and penalties related to income taxes not covered by IAS 12. Provisions for interest and penalties related to income taxes are generally classified as current provisions because the responsible authority can be expected to issue an assessment notice at any time.
Significant discretion and sources of estimation uncertainty
Provisions for litigation
Like the measurement of provisions, the assessment of a recognition obligation for provisions for litigation is, to a particular extent, subject to a degree of estimation uncertainty. The uncertainties relate, in particular, to the assessment of the likelihood and the amount of the outflow of resources.
Provisions for restructuring
Estimation uncertainty about the provisions for restructuring primarily relate to determining the amount of the expected outflow of resources. This is largely influenced by the assumptions made concerning the change in or termination of the employment relationships of the affected employees and the planned implementation date of the restructuring plan.
Provisions for environmental protection
The assessment of a recognition obligation and the measurement of the provisions for environmental protection are subject to discretionary decisions and estimation uncertainties to a particular degree.
The estimation uncertainties relate in particular to the assessment of the timing and likelihood of a future outflow of resources and to the assessment of the extent of necessary remediation measures and the related calculation of the amount of the liability.
Provisions for acceptance and follow-on obligations
Estimation uncertainty regarding the provisions for acceptance and follow-on obligations primarily relates to determining the amount of the expected outflow of resources.
Provisions for interest and penalties related to income taxes
Estimation uncertainty concerning the provisions for interest and penalties related to income taxes mainly relates to the interpretation of tax codes and the effects of amended case law.
Litigation
The largest individual item within the provisions for litigation was a low-double-digit million euro amount for the provision for expected legal costs in connection with the legal dispute with Merck & Co., Inc., Rahway, NJ, United States (outside the United States and Canada: MSD) in the United States. Further information can be found in Note (28) Contingent liabilities.
Restructuring
The restructuring provisions recognized as of December 31, 2025, primarily relate to obligations for workforce reduction measures in connection with communicated restructuring plans.
These provisions included programs to improve efficiency and increase customer focus in the three business sectors as well as a program to continuously improve processes and align the Group functions more closely with business needs. Additions totaling a high double-digit million euro amount were attributable to the Healthcare business sector. Utilizations amounting to a low double-digit million euro amount related to the program that was launched in fiscal 2023 to continuously improve processes and align the Group functions more closely with the businesses. In addition, utilizations were attributable to efficiency improvement programs in all the three business sectors.
The majority of these provisions are expected to be utilized within the next two fiscal years. A smaller portion is expected to be utilized within three to five years.
Environmental protection
Provisions for environmental protection resulted in particular from obligations for soil remediation and groundwater protection in connection with the crop protection business in Germany and Latin America that was discontinued in 1987.
Most of the provisions are expected to be utilized after more than one year.
Acceptance and follow-on obligations
Provisions for acceptance and follow-on obligations amounting to € 80 million related to expenses in connection with discontinued development projects in the Healthcare business sector as well as obligation surpluses from onerous contracts.
Release of provision in fiscal 2025 resulted largely from discontinued development projects in Healthcare business sector. Included were among others the release of the provision for acceptance and follow-on obligations in connection with the termination of the xevinapant program as well as the evobrutinib program amounting to a mid-double-digit million euro amount. The remaining costs relating to the termination of the xevinapant program decreased due to adjustments in the duration and scope of the follow-on obligations. The remaining provisions are largely expected to be utilized over the next two fiscal years.
Interest and penalties related to income taxes
Provisions for interest and penalties related to income taxes mainly included penalties arising from tax audits as well as interest payables associated with or resulting from tax payables.
Miscellaneous other provisions
Miscellaneous other provisions included provisions for asset retirement obligations, other tax risks not constituting income tax in accordance with IAS 12, risks in connection with employee participation programs and warranty obligations.