ANNUAL REPORT 2021

CONNECT.
VERSATILITY
EFFICIENCYFORBO – IN EVERYDAY LIFE

2

VERSATILITY.

Sustainability, functionality, and attractive designs are a high priority
in the development of our floor coverings. These create spaces witha comfortable ambience and scope to realize creative ideas.
In our production processes, we take care to use environmentallycompatible materials, renewable energy, and smart logistics to­ensure the best possible eco-balance. Forbo is the world’s leading
manufacturer of linoleum, a floor covering that is completely CO2neutral, biodegradable and made from natural materials.

EFFICIENCY.

At airports as well as logistics and mail-sorting centers, our conveyor belts help move goods reliably and efficiently from A to B.
The specific characteristics of the belts play a key role in ensuringsmooth running of customer processes while increasing the­product benefit. Through innovative technologies, close teamwork
with customers, and long-standing know-how, we develop industryspecific solutions that add value. Our belts ensure the highest levelof ­efficiency with minimal energy expenditure

4This E. Schneider

Michael Schumacher

Executive Chairman

CEO‘After a difficult year marked by the pandemic, demand recovered
during 2021. The improving global economy led to challenges in the
procurement of raw materials and bottlenecks in freight capacities,
however. We also had to contend with massive increases in thecost of raw materials, and much higher logistics costs. The entire
organization comprising procurement, logistics, research and de­velopment, production as well as sales managed the constantly
changing circumstances with great competence and flexibility.
We were able to offset some of the additional costs by increasing
the utilization of production sites and further improving efficiency.
We also had to raise prices in order to maintain the current levelof margins and earnings. Despite the operational challenges in thereporting year, we invested to the same extent as previously in­projects to promote growth.’

FORBO ANNUAL REPORT 2021 – LETTER TO SHAREHOLDERS5

TO OURSHAREHOLDERS
Dear Madam, dear Sir,
Forbo can look back on a successful reporting year. Adjusted for currency fluctuations, sales and earnings bothexceeded the pre-pandemic levels of 2019. This performance was achieved in the context of a volatile andchallenging environment affected by restrictions in the availability of raw materials and significant cost
increases.
During this phase of the pandemic, it was important to recruit qualified staff in sufficient numbers and fill all
positions with suitable candidates to manage the upturn successfully. Raw materials had to be procured at theright time and at acceptable prices and other costs which had risen sharply across the board, such as logistics
and energy, either offset or passed on.
Our strategy of not expanding into high-volume business and instead offering high-quality, sustainableproducts and services continued to prove successful even in these unusual times. We continued to focus on thedevelopment of application-specific innovations and successfully completed extensive projects, especially for
product lines and emerging markets with above-average growth. Investment remained at a constant level
throughout, always in line with sustainable developments and modernizations. Our global market position, ourstrong brand, and our long-standing and trusting relationships with customers combined to help us participate
quickly and effectively in the upswing.
Operating profit and margins were significantly increased thanks to the much-improved utilization of our
production sites and the sales price rises as a result of massive cost increases for raw materials.

Double-digit sales growth in all regions
Sales above pre-pandemic levels
In the year under review, Forbo generated net sales of CHF 1,254.0 million (previous year: CHF 1,117.7 million), a
gain of 12.2% in the corporate currency; this is reflected in a local currency sales increase of 11.8%, due to slightly
positive currency effects. All three regions contributed to this with double-digit growth in local currencies:+13.8% in the Americas, +12.6% in Asia/Pacific, and +11.0% in Europe. Adjusted for currency effects, sales werehigher than the pre-pandemic level of 2019.
The net sales of Flooring Systems rose by 12.5% in corporate currency terms to CHF 851.8 million (previous year:
CHF 757.0 million). In local currencies, this corresponds to a rise of 11.7%. There was an increase in the number ofprojects in healthcare, education facilities, and shop fittings, whereas demand in the office and hospitality
segments in particular remained moderate.
Movement Systems generated sales of CHF 402.2 million (previous year: CHF 360.7 million), a rise of 11.5% in thecorporate currency and 11.9% in local currencies. This increase was driven by the logistics segment in particular,
with online commerce, postal distribution centers, and global courier service providers all showing growth, aswell as increased activity at airports. Belts for industrial manufacturing saw an above-average increase indemand, followed also by treadmill belts for fitness centers.
The conversion of local sales into the corporate currency generated contrasting results. Flooring Systems
recorded positive currency effects, while for Movement Systems the outcome was negative overall due to the
proportionately greater dependence on the considerably weaker Japanese yen and the slightly weaker US dollar.
The currency effects on sales and earnings were insignificant overall, however.

6

FORBO ANNUAL REPORT 2021 – LETTER TO SHAREHOLDERS

Distinctive increase in operating profits and margins
Significant rise in profitability despite higher prices for raw materials
Operating profits rose significantly, with an increase that was proportionately higher related to sales growth.
This effect was the result in particular of better utilization of production and fabrication capacities due to therise in sales, increased productivity based on optimized operating structures, and a consistent focus on costs.
This was counteracted by a sharp rise in raw material prices and significantly higher energy and freight costs,
necessitating price increases on our part.
Operating profit before depreciation and amortization (EBITDA) rose by CHF 43.6 million, or 22.7%, to CHF
235.6 million (previous year: CHF 192.0 million). Group operating profit (EBIT) increased by CHF 42.0 million, or
30.7%, to CHF 179.0 million (previous year: CHF 137.0 million). This resulted in an EBITDA margin of 18.8%(previous year: 17.2%) and an EBIT margin of 14.3% (previous year: 12.3%).

Significant increase in Group profit
Growth in operating earnings reflected in Group profit
Based on the higher operating profit (EBIT), a slightly higher tax rate of 22.1% (previous year: 22.0%) and apositive financial result of CHF 2.2 million (previous year: CHF – 0.9 million), due to exchange rate gains on
foreign currencies, Group profit increased by 33.0% or CHF 35.0 million to CHF 141.2 million (previous year:
CHF 106.2 million).

Strong balance sheet
Healthy equity ratio and high level of liquidity despite share buyback
Net cash came to CHF 56.2 million at year-end 2021 (previous year: CHF 255.9 million). This decrease is primarily
attributable to the current share buyback program 2019–2022, for which an investment of CHF 269.2 million
was made. As at December 31, 2021, Forbo held treasury shares with a value of CHF 421.0 million valued at the
year-end price 2021. Of this, CHF 281.7 million (150,625 shares) is earmarked for cancelation in 2022 as part ofthe share buyback program.
The share buyback program resulted in a reduction of the equity ratio to 53.2% (previous year: 61.5%).
The undiluted earnings per share reflect the higher earnings and the reduction in the number of shares
outstanding. It rose by 37.6% to CHF 91.63 (previous year: CHF 66.60).

7

Proposals to the Ordinary General Meeting
Elections to the Board of Directors
Apart from Dr. Reto Müller, all the current members of the Board of Directors will stand for re-election for afurther one-year term of office. The Board of Directors will propose Dr. Eveline Saupper and Jens Fankhänel forelection to the Board of Directors.
The Board of Directors would like to thank Dr. Reto Müller for his very valuable and extremely able contribution
to the development of the company and is also delighted to have found two new candidates to join the Boardof Directors who come with proven expertise in the fields of taxation, finance, and human resources as well as
digitization, automation technologies, and strategy implementation.
Dividend adjusted to the increase in earnings
Due to the successful business performance, the healthy cash flow and the strong equity base, the Board of
Directors will propose to the Ordinary General Meeting that the dividend for the 2021 business year should be
CHF 25 per share (previous year: CHF 20 per share), corresponding to an increase of 25%.
Share buyback program
The Board of Directors will propose to the Ordinary General Meeting that the shares repurchased in thebuyback program 2019–2022 up until the Ordinary General Meeting in 2022 should be canceled, the capital
reduced, and the Articles of Association amended accordingly.

Priorities and outlook for 2022
Focus on implementing current strategy
Even after this time of pandemic, Forbo maintains considerable earnings power, a strong capital structure,and, thanks to a robust cash flow, a high level of liquidity. Our innovative and sustainable product portfolio,
our global presence, and our leading market positions allow us to implement our strategy without faltering.
We were therefore able to pursue and implement all strategically important projects in the reporting year
despite the challenges of the times. The focus for 2022 is on strengthening our sales organizations, expanding
our product portfolio, and introducing measures to improve efficiency through digitization. External opportunities for growth will be exploited if they can create long-term added value.
Outlook for 2022
We are expecting the pandemic to remain with us during the 2022 business year, albeit on a lesser scale interms of its impact. Rising prices for raw materials, freight and energy costs, and significantly higher wage costs
will challenge us also in the new year. The additional costs will be compensated to a great extent throughincreases in efficiency and price adjustments.
We anticipate that we will be able to achieve a moderate increase both in sales in local currency terms andGroup profit in the 2022 business year compared with the previous year.

8

FORBO ANNUAL REPORT 2021 – LETTER TO SHAREHOLDERS

Thank you
Change on the Executive Board
At the end of September 2021, Stephan Bauer left Forbo at the age of 60 after an eight-year tenure as CEO inorder to dedicate himself to non-executive roles outside our company. His time with us saw the implementation of important projects in the areas of innovation, growth markets and modernization of factories, and asubstantial increase in earning power. The Board of Directors would like to thank him for all his commitment
and valuable achievements and wishes him all the best for this new chapter in his life.
In October 2021, Michael Schumacher took over the position of Chief Executive Officer and Chairman of the
Executive Board of the Forbo Group after an induction period of one month. The Board of Directors wishes him
every success in his new role.
Thanks to employees, business partners, and shareholders
Over the past two years, our employees have had to demonstrate great commitment and flexibility in order tosuccessfully and efficiently meet the various challenges we have faced. Along with the COVID-related
restrictions, creativity was required to overcome supply shortages and massive cost increases in order toprovide our customers with the reliable and competent service they have rightly come to expect. Thank you
all for your tireless commitment and your adaptability!
We also wish to thank our customers, business partners, and suppliers for their excellent cooperation in thesecontinuing exceptional times.
On behalf of the Board of Directors and the Executive Board, we thank you too, dear shareholders, for yourongoing loyalty and the trust you place in Forbo.

Baar, March 2022

This E. Schneider
Executive Chairman

Michael Schumacher
CEO

Financial calendar
Ordinary General MeetingPublication of 2022 Half-Year Report
Publication of 2022 Annual Report

Friday, April 1, 2022
Friday, July 29, 2022
Thursday, March 2, 2023

9

CONTENTS
At a glance
Forbo in figures
Sales and earnings above pre-pandemic levels
Committed to sustainability

Activity report
Two divisions with leading market positions
Flooring Systems: Stronger all-round
Movement Systems:
Investments to support growth

11
14
18
22

29
30
32
38

Organization45
Executive BoardGroup structure 
Board of Directors

46
48
50

The Forbo share

53

Corporate governance report

57

Remuneration report

75

Forbo Group financial report

93

Consolidated balance sheet
94
Consolidated income statement
95
Consolidated comprehensive income statement
96
Consolidated statement of changes in equity
97
Consolidated cash flow statement
98
Notes – accounting principles
99
Notes109
Group companies
136
Report of the statutory auditor
140
Consolidated balance sheets 2017 – 2021
146
Consolidated income statements 2017 – 2021
147

Financial statements for Forbo Holding LtdBalance sheet
Income statementNotes to the financial statements
Proposal for appropriation of available earnings
Report of the statutory auditor

149
150
151
152
157
158

10

11

AT A GLANCE
Forbo in figures
Sales and earnings above pre-pandemic levels Committed to sustainability

14
18
22

12

2021 AT A GLANCE

13

FORBO IS A LEADINGPRODUCER OF
FLOOR COVERINGS,BUILDING AND­CONSTRUCTIONADHESIVES, AS WELL
AS POWER TRANSMISSION AND
CONVEYOR BELT­S OLUTIONS.
The company employs about 5,500 people andhas an international network of 25 production
and distribution ­companies, 6 fabrication centersand 49 pure sales organizations in a total of 39
countries. Forbo is headquartered in Baar in the
canton of Zug, Switzerland.

14

FORBO ANNUAL REPORT 2021 – AT A GLANCEFORBO IN FIGURES
Forbo is a global player, and its twodiv­­isions supply a wide range ofindustries. The Group’s global reachmeans that it is close to dynamic
markets, making Forbo the first choice
as a local partner for customers thathave similar global requirements. The
quality, longevity, and perfor­manceof our products and systems reflect
the quality and stability of our relations
with our business partners.

Flooring Systems
15 production facilities in 7 countries and distribution
companies in 27 countries. Sales offices in Europe,
North, Central, and South America as well as Asia/
Pacific.
Floor coverings production facilities
Building and construction adhesives
production facilities
Movement Systems
10 production sites and 6 fabrication centers in 9
countries and distribution companies in 32 countries.
Over 300 sales and service offices worldwide.
 Production facilities andfabrication centers

15

Net sales 	 CHF 1,254.0 million
EBIT 		 CHF 179.0 million
EBIT margin 	
14.3%
Group profit	 CHF 141.2 million
Earnings per share	
CHF 91.63
undiluted

16

FORBO ANNUAL REPORT 2021 – AT A GLANCE

Net sales by division
Change on previous year
2021 CHF m
851.8
402.2
1,254.0

Flooring Systems
Movement Systems
Total

in %
12.5
11.5
12.2

in localcurrencies in %
11.7
11.9
11.8

In % of total
67.9
32.1
100.0

32.1%

Movement Systems

67.9%
Flooring Systems

Employees by division

2021 number
3,021
2,472
39
5,532

Flooring Systems
Movement Systems
Corporate Functions
Total

2,472

Movement Systems

3,021

Flooring Systems

39

Corporate Functions

Change onprevious year in %
1.8
7.1
– 4.9
4.0

In % of total
54.6
44.7
0.7
100.0

FORBO ANNUAL REPORT 2021 – AT A GLANCE

17

Financial overview Forbo Group
2021

2020

2021

2020

Income statement
Net sales
Flooring Systems
Movement Systems
Operating profit before depreciation andamortization (EBITDA)

CHF m
1,254.0
851.8
402.2
235.6

CHF m
1,117.7
757.0
360.7
192.0

EUR m1)
1,159.9
787.9
372.0
217.9

EUR m1)
1,044.0
707.1
336.9
179.3

Operating profit (EBIT)Group profit

179.0
141.2

137.0
106.2

165.6
130.6

128.0
99.2

Balance sheet
Total assets
Operating assets
Shareholders’ equity
Net cash2)

CHF m
981.6
850.7
521.8
56.2

CHF m
1,110.8
809.3
683.5
255.9

EUR m1)
908.0
786.9
482.7
52.0

EUR m1)
1,037.5
755.9
638.4
239.0

Cash flow statement
Cash flow from operating activities
Cash flow from investing activities
Free cash flow

CHF m
166.5
– 38.4
128.1

CHF m
171.4
– 38.9132.5

EUR m1)154.0– 35.5118.5

EUR m1)160.1– 36.3123.8

Key ratios
ROS (EBITDA/net sales)
Equity ratio (shareholders’ equity/total assets)
Gearing (net debt/shareholders’ equity)

%
18.8
53.2
– 10.8%17.2
61.5– 37.4

Employees (as at December 31)
Total employees

Number
5,532

Number5,317

Ratios per share
Earnings per share (undiluted)3)
Equity (undiluted)
Dividend

CHF
91.63
338.5225.004)CHF
66.60
428.6420.05)

EUR1)
84.76
313.1323.124)

EUR1)
62.21
400.3718.685)

Stock market capitalization (as at December 31)
Stock market capitalization6)

CHF m
3,085.5

CHF m
2,504.7

EUR m1)2,854.0

EUR m1)
2,339.5

1) Euro values translated at the average annual exchange rate of CHF
1.0811/1 EUR (2021) and CHF 1.0706/1 EUR (2020).
2) Liquidity plus financial assets less financial liabilities, excluding
leasing liabilities.
3) See note 11 ‘Earnings per share’ on page 116 of the financial­report.

4) The Board of Directors proposes to the Ordinary General Meetingof April 1, 2022, the distribution of a dividend in the amount of
CHF 25.00 per registered share.
5) Approval of a dividend of CHF 20.00 per registered share at theOrdinary General Meeting of April 1, 2021.
6) Total number of shares multiplied by year-end share price.

18

FORBO ANNUAL REPORT 2021 – AT A GLANCESALES AND EARNINGSABOVE PRE-PANDEMIC
LEVELS
The positive demand trend seen at theend of 2020 continued in the reportingyear. Overall, demand recovered in mostof our markets and customer segments.
The improving global economy led tochallenges in the procurement of raw
materials, however. This resulted in supply chain bottlenecks and significantly
higher costs for raw material, logistics,
freight, and energy. A flexible and agile
response was required in all parts of theorganization to achieve the best possible solutions for our own value chain
and ensure our service level. We also
had to adjust prices.

Operating profits rose disproportionately compared with sales growth, due
mainly to higher utilization of production capacity, improved productivity, increased efficiency, and adjustments tosales prices. Adjusted for currency effects, sales increased to above thepre-pandemic levels of 2019.
After two years marked by the COVID
pandemic, Forbo has a strong financial
basis, also after the share repurchases
undertaken. The favorable earnings situation and solid cash flow allowed a­sustainable level of investment in ex­
pansion of the product portfolio andcapacities, as well as new technologies
with accompanying digitization.

Net sales by geographic area
Change on previous year

Germany
FranceBenelux
Scandinavia
Great Britain/Ireland
Switzerland
Other countries Europe
EuropeUSA
Other countries Americas
AmericasAsia/Pacific and Africa
Total

2021
in %
12.4
12.0
10.3
8.2
5.9
2.2
14.0
65.0
16.5
3.8
20.3
14.7
100.0

in %
6.9
20.6
5.9
8.6
10.9
6.5
19.9
12.2
11.1
16.7
12.1
12.1
12.2

in local currencies in %
5.8
19.4
4.8
5.0
6.5
6.5
20.8
11.0
13.8
13.7
13.8
12.6
11.8

2021
CHF m
155.9
149.9
129.4
102.7
74.5
27.9
174.2
814.5
207.5
46.8
254.3
185.2
1 254.0

25

50

75

100

125

150

175

200

225

250

275

19

Strong sales growth
The recovery in the markets and customer segments
toward the end of 2020 continued in the reporting
year and resulted in double-digit growth in all regions.
Overall in 2021, net sales came to CHF 1,254.0 million(previous year: CHF 1 117.7 million); sales in local currencies were 11.8% higher. In the corporate currency,
this corresponded to an increase of 12.2%. Overall, theAmericas region saw the biggest sales growth in termsof local currencies, followed by Asia/Pacific and Europe. Both divisions increased currency-adjusted sales
compared with the pre-pandemic year of 2019.

The Flooring Systems division generated net sales of
CHF 851.8 million in the 2021 business year (previous
year: CHF 757.0 million), which reflects an increase of
11.7% in local currencies (12.5% in the corporate currency). Asia/Pacific and the Americas recorded higher
growth than Europe.
The Movement Systems division generated net salesof CHF 402.2 million in the year under review (previous
year: CHF 360.7 million), which reflects an increase of
11.9% in local currencies (11.5% in the corporate currency). Due to the development in the previous year,
Europe and the Americas achieved a more marked risein sales than Asia/Pacific.

EBITDA by division

Flooring Systems
Movement Systems
Corporate

2021
CHF m
166.7
74.2
– 5.3

Change onpre­vious year in % – 25
15.3
34.9
30.3

0

Significant rise in profitability despite higher
prices for raw materials
Operating profits rose significantly, showing a disproportionate increase compared with sales growth. Thiseffect resulted mainly from higher utilization of production and fabrication capacities driven by sales
growth. The positive impact of these economies ofscale led to higher productivity based on optimized
operating structures. Improved efficiency, a continuing cost focus and price adjustments on our part also
contributed. This was counteracted by a sharp rise insome raw material prices and significantly higher energy and freight costs.
The Group increased operating profit before depreciation and amortization (EBITDA) by 22.7% to CHF 235.6
million (previous year: CHF 192.0 million). EBITDA at
Flooring Systems increased by 15.3% to CHF 166.7 million (previous year: CHF 144.6 million). At Movement
Systems EBITDA rose by 34.9% to CHF 74.2 million (previous year: CHF 55.0 million).
This resulted in a Group EBITDA margin of 18.8% (previous year: 17.2%). At Flooring Systems, the EBITDA
margin increased from 19.1% the previous year to19.6% in the year under review, while at Movement
Systems the EBITDA margin rose by 3.2 percentage
points to 18.4% (previous year: 15.2%).

25

50

75

100

125

150

175

Group operating profit (EBIT) was 30.7% higher at CHF
179.0 million (previous year: CHF 137.0 million). The
Group EBIT margin increased from 12.3% the previous
year to 14.3% in the year under review.
Based on the higher operating profit (EBIT), a slightly
higher tax rate and a positive financial result due toexchange rate gains on foreign currencies, Group profit
rose by 33.0% or CHF 35.0 million to CHF 141.2 million(previous year: CHF 106.2 million).
Taxes and financial income
The tax rate in the year under review was 22.1% (previous year: 22.0%), in line with the long-term average.
Financial expense in 2021 came to CHF 0.8 million (previous year: CHF 1.6 million), consisting solely of interest
expense for leasing liabilities recognized in the balance
sheet. The year 2020 was still affected by foreign exchange losses. Offsetting this was financial income
higher than in the previous year of CHF 3.0 million (previous year: CHF 0.7 million), which consisted largely of
exchange rate gains on foreign currencies. On balance,
the net financial result rose to CHF 2.2 million (previous
year: CHF – 0.9 million).

20

FORBO ANNUAL REPORT 2021 – AT A GLANCE

Free cash flow
2021
CHF m
166.5
– 38.4
128.1

Cash flow from operating activities
Cash flow from investing activities
Free cash flow

Solid cash flow performance
In the reporting year, cash flow from operating activities was CHF 166.5 million (previous year: CHF 171.4
million), down slightly despite the much higher result.
This is because inventories in the pandemic year of2020 were reduced, and trade receivables decreased.
Trade receivables rose in the reporting year in stepwith the market recovery. The increase in inventories ispartly due to the marked rise in raw material prices. On
the other hand, inventories of raw materials were deliberately built up to ensure availability. The cash outflow from capital spending was comparable with previous years and came to CHF – 38.4 million (previous
year: CHF – 38.9 million). Free cash flow thus totaled
CHF 128.1 million (previous year: CHF 132.5 million).

2020
CHF m
171.4
– 38.9
132.5

– 50

0

50

100

150

200

Strong balance sheet
Total assets at December 31, 2021, decreased by CHF
129.2 million – mainly due to the share buyback in thereporting year of CHF 269.2 million – and amounted to
CHF 981.6 million (previous year: CHF 1,110.8 million).
Net cash reduced by CHF 199.7 million to CHF 56.2 million (previous year: CHF 255.9 million), also as a resultof the share buyback. For the same reason, equity decreased by CHF 161.7 million and stood at CHF 521.8
million on December 31, 2021 (previous year: CHF
683.5 million). Further factors were the positive Group
profit less the dividend payout. The equity ratio remains solid, standing at 53.2% (previous year: 61.5%).

Investments 2017 – 2021

2021
2020
2019
2018
2017

Flooring
Systems
CHF m

Movement
Systems
CHF m

Total
CHF m

23
21
23
25
22

15
19
13
13
36

39
40
36
39
58

Value-adding investments
Our investments are wide-ranging, combining the demands of sustainability with efficiency gains in operating processes. In the reporting year, both business divisions invested in strategic projects in the areas ofproduct portfolio, technology, infrastructure, and specific market and capacity expansion projects. Total
Group investments in property, plant, and equipment
and intangible assets in 2021 were CHF 38.8 million(previous year: CHF 39.7 million).
In the reporting period, Flooring Systems invested CHF
23.4 million (previous year: CHF 20.5 million) at various
manufacturing sites in new coating and cutting systems, modernized planning and control equipment,
renewal of specific machinery and afterburners withnew filter technology, allowing a significant reduction
in CO2 emissions. More substantial investments weremade in a next-generation digital printer for vinyl floor
coverings in France, a new coating system combinedwith automated cutting for entrance flooring systems
in the Netherlands, and a renewed powder plant and

10

20

30

40

an expanded warehouse facility for building and construction adhesives in the Netherlands.
At Movement Systems, after above-average investments in property, plant, and equipment in previous
years, investments came to CHF 15.4 million (previous
year: CHF 19.1 million). Most of the funds were committed to a further stage in the expansion of the production site for Prolink plastic modular belts in Denmark to increase the capacity of injection molding
machines, and a newly installed heat recovery system.
In India, a new plant with increased fabrication ca­
pacity was built, and in the USA, Germany, and Russia
local fabrication and service centers were opened. A
new software tool was developed for global planningof production and processing, to optimize materials
planning and minimize the number of cutting scrap.

50

60

21

Workforce expansion based on individual
market development
The Forbo Group employed 5 532 people at year-end
2021. This is a total of 215 more employees than at theend of the previous year. Workforce expansion was
mostly in production and processing as well as in the
expansion of sales activities.

The individual percentage changes in staffing levels
mostly reflect the recovery in the markets and thebusiness performance in the different countries andregions. They mirror the situation at the end of the year.

Employees by geographic area
Benelux
Germany
Great Britain/Ireland
FranceSwitzerland
Scandinavia
Other countries Europe
EuropeAsia/Pacific and Africa
USA
Other countries Americas
Americas
Total

2021
Change on
in % pre­vious year in %
21.3
1.6
12.1
3.6
9.5
2.1
7.4
2.8
3.3
1.1
3.2
2.9
14.2
10.1
71.0
3.8
14.8
3.4
10.6
5.0
3.6
9.4
14.2
6.1
100.0
4.0

2021
number
1 181
669
523
408
181
179
785
3 926
823
585
198
783
5 532

In Europe, Flooring Systems contributed to the increase in staffing levels in France, Great Britain, and theNetherlands in particular – all countries with larger
production sites. We continued to expand resources inthe successful growth market of Russia. The increase in
the number of employees at Movement Systems was
based on the expansion of production capacity in Germany, including the new production plant for homo­
genous conveyor belts, and the increased fabrication
capacity in Slovakia, as well as the expansion of plastic
modular belt capacity in Denmark.

200

400

600

800

1 000

1 200

1 400

The increase in Asia/Pacific mainly reflected the expansion of production and fabrication capacity at Movement Systems in China and India.
In the Americas, the built-up number of employees
was mainly due to the market recovery at Movement
Systems in the USA and the expansion of service personnel in Mexico and Columbia.

22

FORBO ANNUAL REPORT 2021 – AT A GLANCECOMMITTED TOSUSTAINABILITY
The responsible use of resources of every kind is a guiding principle at Forbo.
We are committed to the protection of
the environment and we invest in concepts that contribute to a sustainable
future for us and for society at large. As a
responsible manufacturer and employer,
Forbo sets benchmarks for health andsafety, the environment, and quality.
That is why innovative ideas, researchand development are the driving forces
behind our business concept.

Social dimension
Forbo fosters a performance culture in order to meet thehigh expectations of our customers and business partners as well as the demands we make on ourselves. That
is why we promote the necessary capabilities and competences at all organizational levels, and support thisinternally with seminars and further training activities.
The divisions provide internal training in a wide rangeof areas covering products and applications, sales andmarketing, finance, operations, project management,
strategy implementation, as well as instruction in Forbo’s values. Continuous intensive training in health andsafety includes measures relating to accident prevention, risk awareness, and occupational health and safety, as well as general ongoing preventive activities.
At Group level, Forbo has established an internal management training program in collaboration with the
University of St. Gallen as well as other external partners and internal experts. This practice-oriented training program for senior managers and persons in key

23

positions consists of a first training week that includes
various modules in areas ranging from management
and sales to marketing and operations.
A second training week expands on this and includes
leadership modules, focusing on areas of strategy implementation and leadership such as dealing with organizational and team changes as well as performance
management. A third training week, building on thisfoundation, deals mainly with topics regarding the implementation of strategy across different organizational levels. This is combined with appropriate tools to aid
communications and collaboration in international,
culturally diverse teams.
Ecological dimension
Protection of the environment and the generation of
ecological added value are important factors in all Forbo’s development and investment decisions. Our customers also demand efficient and sustainable products and services. Both divisions are meeting thesedemands by offering purely natural products in theirproduct portfolios.

In linoleum, Flooring Systems offers a floor covering
made from up to 98% renewable raw materials, ofwhich 73% are renewable within ten years. Linoleum
is CO2-neutral (cradle to gate, without compensation)and made from natural raw materials: linseed oil, natural resin, wood flour and powdered limestone, as well
as jute and pigments. A natural product through andthrough, which, in view of its long service life and posi­tive ecological balance, is regarded as the most environmentally friendly resilient floor covering available
and is biodegradable. In addition to this, linoleum ismade from about 45% recycled material, which lowers
the consumption of primary raw materials accordingly.
The Tessera Struktur 1 carpet tile collection is based on
new microtufting technology and consists of 100% regenerated Econyl yarn made from scrap and wastefrom carpets, and yarn and fibers from fishing nets andcar hubcaps. Thanks both to the composition of the
raw materials in the recycled yarn and the substratematerial and to the production process that uses 100%
renewable energy, this collection is a leading performer among our textile products in terms of its environmental footprint.

24

FORBO ANNUAL REPORT 2021 – AT A GLANCE

Vinyl floor coverings acquire their elasticity, pliability,and flexibility from plasticizers. Flooring Systems uses
phthalate-free plasticizers of the latest generation. Vinyl floor coverings also contain up to 25% recycledmaterial in relation to their total product weight. Within the framework of our ‘back to the floor’ program, wecollect offcuts of our vinyl coverings as well as wastematerial from our own production and put these backinto the production of new coverings, for example forthe substrate layer of carpet tiles and Flotex – thewashable textile flooring. Flooring Systems gets 100%of the electricity used at its production locations fromrenewable energy sources.
At Movement Systems, too, we are working on the further development of phthalate-free plasticizers in the
manufacture of PVC conveyor belts.
With the BioBelt, Movement Systems has developed abiodegradable conveyor belt whose physical and dynamic properties are equal to standard belts. The same
applies to its performance and long service life. In the

BioBelt, oil-based raw materials and synthetic-technical materials have been largely substituted by materials made from renewable, plant-based raw materials
that are biodegradable.
In order to maximize environmental compatibility andat the same time increase the product advantages,
Movement Systems has patented a special coatingthat significantly reduces the friction between the underside of the belt and the slider bed compared withconventional conveyor belts. In the meantime, Movement Systems has launched new generations of theseenergy-saving conveyor belts that are even more efficient. The AmpMiserTM 2.0 conveyor belts display theiradvantages most clearly where goods are being continuously conveyed and many belts are in use, for example at airports or in logistics and distribution centers. For this type of application, energy savings of up
to 50% are achieved for the overall systems.
Another of our aims is to continually improve the sustainability and efficiency of our own activities. We do25this by using less material and energy to realize equivalent or even better solutions. Both divisions are working constantly on the optimization of production processes in terms of water and energy consumption,
reduction of emissions, reuse of heat generated in the
production process, and the reduction and efficient
recycling of waste material in order to reduce the burden on the environment. A wide range of certifications
confirm these efforts. At the same time, we are working on innovative ideas regarding the materials usedin the production process as well as new application
techniques.
FLOORING SYSTEMS
Floor coverings are part of our everyday lives and define our living, leisure, and working spaces. Whether as
a direct end customer, building contractor on a major
project, architect or installer, for every stakeholder
group the topic of sustainability plays an importantrole in the decision-making process. It is therefore important for Flooring Systems to differentiate itself fromits competitors with readily understood and convincing arguments, including where sustainability is con-cerned. To do this, we apply the holistic approach of a‘circular economy’, placing great emphasis on CO2 neutrality and foregrounding the concepts of reduce, reuse, renew and recycle, especially in operational contexts.
For the manufacture of vinyl floorings at our production site in the Netherlands, we set up a pilot installation to evaluate and implement a new afterburner­filter technology for processing waste air from recirculation ovens. The new technology will gradually replace the existing installations in the coming years.
This innovation will make it possible to reduce CO2
emissions by around 1200 tonnes per year.
The return programs for post-consumer waste materials (gate to recycle) in the Netherlands, Great Britain,
Sweden, and France generate return amounts of 325
tonnes per year. The types of waste taken back include
floor coverings from demolished buildings and material disposed of in renovation work, but also offcuts
from new installations.

26

FORBO ANNUAL REPORT 2021 – AT A GLANCEMOVEMENT SYSTEMS
Movement Systems’ resource management is basedon the continuous improvement of consumption efficiency through the development and targeted implementation of measures to optimize consumption ofelectricity, gas, oil, and water. Alongside ongoing energy-saving measures, energy recovery is an importantfactor, i.e. the use of energy released in the downstream incineration plant for heating. In order to reduce water consumption and avoid unnecessary
waste, Movement Systems is increasingly using closed
water circulation systems. Some of the waste water
can be used in another production step in order tominimize water requirements. The reduction and productive reuse of waste material is increasingly the focus of Kaizen and sustainability initiatives. Cutoffs fromthe belts we produce in certain countries are sold toother companies to be reused in their production. The
locations in North America collect sanding dust in filters which is then processed by external partners as amaterial for use in their production. Some of the wastefrom plastic modular belts as well as polyurethane andpolyamide cutoffs from flat belts is recycled back into
our own production.
During the upgrade and capacity expansion at the
manufacturing site for Prolink module belts in Denmark, the focus of our ecological considerations wason saving, recovering, and reusing energy. Thanks to
the newly installed heat recovery system in the production facility, process energy can be reused to heat
the offices and production building. In the new cooling units on the roof, water is cooled directly by theambient air, relieving the strain on the refrigeration
system and allowing substantial savings in kilowatt
hours. The refrigeration units also use an environmentally friendly propane-based coolant. The reduction in
CO2 emissions through savings in primary energy consumption amounts to over 800 tonnes per year.

27

Economic dimension
As a listed company, Forbo also engages intensively
with the economic dimension of sustainability. Compliance is enormously important for the reputationand positioning of a company. We are successful as acompany when we meet the expectations of customers, when employees are enthusiastic and committed,
and when we create added value in the long term forour shareholders.
Forbo’s Code of Conduct is based on the principles ofintegrity, transparency, and fairness and describes how
we should conduct ourselves. It sets out our most important business principles and basic values and is of
key importance in determining how we should protect and continue to enhance our reputation. It shows
our commitment to behaving ethically and with integrity and respecting individual rights. We expect ourown employees and our business partners to abide bythese principles. Maintaining high standards in ourbusiness relations is the foundation for enduring success.

Also in the year under review, we constantly maintained our efforts to ensure responsible conduct: wecontinued to strengthen awareness of a variety ofcompliance topics through e-learning modules andsystematically implemented risk management processes.
This enabled us to deepen understanding of the Codeof Conduct, competition law and anticorruption
guidelines in refresher courses for existing employees
and training for new employees, with a stronger focus
on data protection and IT security. IT security measures
were covered in several e-learning modules, which
dealt with phishing protection, recognition of phishing e-mails, handling passwords and caution in the useof social media, as well as the general subject of fraud.
Phishing e-mails were simulated to further increaseawareness.

28

29

ACTIVITYREPORT
Two divisions with leading market positions

30

Flooring Systems:
Stronger all-round32

Movement Systems:
Investments to support growth

38

30

FORBO ANNUAL REPORT 2021 – ACTIVITY REPORTTWO DIVISIONSWITH LEADING
MARKET POSITIONSForbo aims to operate primarily in bu­si­
ness areas in which it has or can achievea leading global market po­sition – something it has achieved for both Flooring
Systems and Movement Systems.

Strategic directions
To be successful in the market place as a Group withdifferently aligned operations, the individual divisions
act independently and flexibly, but always along thestrategic directions defined for the Group as a whole:– Based on a pronounced customer focus, a high levelof service, innovation, digital transformation, anda strong global brand, we are creating global leadership positions in clearly defined market segments.
– Due to a strong market orientation, we shapemarkets and drive profitable growth.
– We are developing significant positions ingrowth markets.
– We are acquiring companies to extend our productrange, to consolidate and/or reinforce market
access.
– We are developing a high-performance culture
and providing the relevant skills and competences
at all levels.

Flooring Systems
The Flooring Systems division offers a broad and attractive range of environmentally friendly natural linoleum,high-quality vinyl floors, entrance flooring systems forcleaning and drying shoes, carpet tiles, needle felt, and­Flotex, the washable high-tech textile flooring. Thanks
to their ­excellent technical properties and attractive
designs, these flooring products are invariably the first
choice for public buildings, department stores, hos­pitals, and other healthcare facilities, schools, libraries,
commercial and office spaces, leisure centers, shops,
hotels, restaurants, and cafeterias as well as for applications in the residential market. With a market share ofabout 70 percent, Forbo is the world leader in linoleum.
Flooring Systems also provides ready-made adhesives
for floor covering installations, parquet flooring, andceramic tiles, leveling compounds for the constructionindustry as well as liquid floors under the trade nameEurocol.

Movement Systems
Movement Systems is a global industry leader for sophisticated con­veyor and processing belts, plastic
modular belts, top-quality power transmission belts,
as well as timing and flat belts made of synthetic ma­te­rials. These products are known under the brandname Siegling. They are used in a wide range of ap­
plications in industry, trade, and the service sector,­including conveyor and processing belts in the food­industry, treadmill belts in fitness studios, and flat belts
in mail distribution centers.

VERSATILITY.

EFFICIENCY.

FLOORINGSYSTEMSVERSATILITYSUSTAINABLE
AND DURABLE
Our attractive floor coverings feature good hygiene
properties, long service life and versatility in use. For
applications in the educational sector, it is particularly
important that floor coverings can withstand heavy
use and offer color concepts that help create an ideal
learning environment. In addition, every space has its
own requirements, which we strive to satisfy withmodular solutions and a wide choice of colors, structures, formats, and functions.

34

FORBO ANNUAL REPORT 2021 – ACTIVITY REPORTFLOORING SYSTEMS:STRONGER ALL-ROUND‘Our markets and customer segments
continued to improve in the reporting
year and have largely recovered. Various
bottlenecks in the availability of raw materials, delays in our supply chains, andreduced installation capacities continually presented us with new challenges. The
massive price hikes in raw materials demanded a highly professional response
from us, with an ongoing cost focus andJean-Michel Wins
price increases to maintain the level of Executive Vice President
profitability and earnings. Overall, we can Flooring Systems
look back on a successful year despite
the difficult circumstances. We intensified efforts to implement our strategic The sales picture in Europe was mixed. The markets ingoals with a focus on growth and Southern Europe and France, which were strongly afstrengthening our sales organizations, fected by COVID-19 the previous year, showed strong
and also handled the Brexit situation well.’ double-digit growth, while most other markets, nameThe Flooring Systems division posted net sales of CHF
851.8 million in the 2021 business year (previous year:
CHF 757.0 million), a rise of 12.5% in the corporate­currency (11.7% in local currencies). The division accounted for 67.9% of Group sales in 2021. We achieved
this increase despite the growing shortage and pricerises affecting construction materials and a lack of­installation capacity at customer projects in certain
markets, which led to some projects being delayed.
Operating profit (EBIT) increased by 19.4% to CHF
131.2 million (previous year: CHF 109.9 million), mainly
because of the improved capacity utilization of production plants due to higher sales, and an increase inproductivity. This was counteracted by a sharp rise in
raw material prices and freight costs, although thesenegative effects were offset to some extent by priceincreases on our part. The EBIT margin was up by 0.9
percentage points to 15.4% (previous year: 14.5%).
Adjusted for currency effects, sales above
pre-pandemic levels
All three regions recorded substantial sales growth,
also due to some successful international key accountactivities: Asia/Pacific saw the greatest effect, with­double-digit growth also in the Americas and a similarly positive picture in Europe. Adjusted for currency
effects, sales were higher than the pre-pandemic levelsof 2019.

ly Germany, the Netherlands, Great Britain, Switzerland,
and Scandinavia, grew strongly, though not at double-digit levels. Russia posted another above-averagesales increase, after a successful prior-year period, withsimilar growth in other Eastern European markets.

The rise in sales in the Americas region was underpinned by the marked recovery in the main market,
USA, despite local bottlenecks affecting logistics, international freight, and installation capacities at customer
projects. The main drivers of growth were projects inthe education and healthcare sectors. In Canada,
growth was driven by state-sponsored projects in thehealthcare sector and aged care. Brazil and smallermarkets in South America reported double-digit sales
increases.
The above-average growth in the Asia/Pacific region
was driven mainly by the catch-up effect in China,
which had seen many construction freezes resulting inmajor project postponements in the previous year.
Projects in the semi-conductor industry and in thehealthcare sector drove the sales growth in particular.
Most markets in Southeast Asia posted a gratifying upturn in sales, as did the growth markets of South Korea
and Turkey. Australia reported moderate growth. Japan, which had benefitted from the Olympics effectthe previous year, stagnated.

35

The building and construction adhesives activity again
generated pleasing growth, to which all three mainmarkets – the Netherlands, Germany, and Russia – contributed.
Attractive new collections in all product groups
In the reporting year, we developed and launchedmodern, high-quality collections with unique selling
points across all product groups.
At the same time, we worked on a number of innovations in the linoleum unit, which will be incorporated
into future collections. One of these is ‘TopshieldPro’, acoating developed based on extensive testing, which
offers improved protection against scratches and abrasion and is much more resistant to disinfectants. The
newly launched ‘marmoleum linear’ collection can be
combined in a variety of ways using natural colors anddesigns.
In the vinyl unit, we created ‘sarlon diversity’, a particularly wide-ranging collection featuring a newly developed surface technology, ‘XtremPURTM’, which is resistant to discoloration, staining and scratches, more
slip-resistant and easier to clean. We created the new
luxury vinyl tiles collection ‘effecta’, targeting the Russian market with local in-trend colors. The high-performance homogenous vinyl floor coverings ‘sphera energetic’ are suitable for use in areas with heavy traffic.
In the textile unit, we introduced various new Flotex,
carpet tile, and needle felt collections, in some cases
designed for local markets or specific customer segments. The ‘coral world series 2021’ is a very wide-ranging new collection of entrance flooring systems, whichfeature roll and mat formats as well as tile and plankformats, with a variety of floor-installing options.
Growth in all product groups
In line with the sales trend, the different productgroups also reported higher sales, though to differing
degrees. Linoleum floor coverings generated pleasing
growth, in particular because of a further increase in
the number of projects in the education and healthsectors. Most product lines of the versatile and application-specific vinyl floor covering collections reported
above-average performance across the board. In textile floorings, Flotex, needle felt floor coverings, and entrance flooring systems returned solid growth rates,
though carpet tiles remained subdued, which can be
ascribed to the very hesitant recovery in the office segment.

Increased investments
In addition to numerous initiatives to enhance theproduct portfolio, we invested in renewals at various
production plants with the aim of developing new
products and promoting innovations but also of modernizing and streamlining production processes. Thisinvariably also involved environmental improvements.
Examples include newly installed coating and cutting
systems, modernized planning and control equipment, and the replacement of specific machinery andafterburners.
The manufacturing site for vinyl floor coverings inFrance installed a next-generation digital printer. It ensures flawless print quality, improved speed, and product and process compatibility. This gives us greater
flexibility in the variety of colors available for new designs and in the creation of additional color combinations and pattern repeats. Further advantages include
the option of production in small batches, shorterroutes to market and implementation of customer-specific designs. The newly installed multipurpose
coating facility for entrance flooring systems in the
Netherlands enables automatic application of aself-adhesive film on the back of tiles. The innovative
new combined cutting technique ‘pro-cut’ facilitates
automatic cutting to measure. At the building andconstruction adhesives production site in the Netherlands, the powder plant was renewed, and the warehousing facilities were extended.
Strengthened for 2022
We start the new year stronger. Our attractive productportfolio, innovative installation options, and strengthened sales organization with greater customer focus
and enhanced service levels, combined with numerous digitization advances, ensure that we are well positioned to take advantage of profitable growth opportunities. All this is further underpinned by a global
communications initiative with special focus on our
CO2-neutral linoleum floor covering. The steep rise in
raw material prices is likely to continue and we will
have to compensate by increasing operational efficiency and price adjustments.

36

FORBO ANNUAL REPORT 2021 – ACTIVITY REPORTSUSTAINABLE AND
FUNCTIONAL
Floor coverings from Forbo combinefunctionality and high product quality
with innovative designs. They enhanceinteriors in accordance with the needsof the users. With every new development we are constantly making our
products and production processes
more sustainable, while fulfilling thehighest demands in terms of functionality. Thanks to regular exchange withdesigners, architects, building owners
and suppliers, we have our finger on thepulse of technical innovation and thelatest design trends.
Our floor coverings are mostly designed for applicationsin the non-residential construction business, whichmeans that they have to be very hardwearing. They arebased on tried-and-tested and state-of-the-art production and digital print technologies, and combine trendy

ENTRANCE FLOORING SYSTEMS ‘CORAL WORLD SERIES 2021’

designs, a diverse range of colors and innovative textures in environmentally friendly materials. Diversely inspired, in the reporting year we also developed attractive new products for a wide range of applications.
Authentic, sustainable linoleum floor coverings
Forbo’s linoleum is without compensation completely
CO2-neutral (cradle to gate), biodegradable, bacteria-inhibiting and the world’s most environmentallyfriendly resilient floor covering. It is made from natural,
renewable materials such as linseed oil, jute, naturalresin, limestone powder, and wood flour. In order tobring the attractiveness of this authentic floor covering closer to various stakeholders with the aid of innovative presentation formats, a roadshow started in the
Netherlands in August 2021 which will travel through20 countries in Europe up to fall 2022. The newly
launched ‘marmoleum linear’ collection is dominatedby neutral, natural shades with a calming and, due tothe striped look, a direction-giving effect. They are especially suitable for applications in the healthcare andeducation sectors as well as in office and administration buildings. Developed on the basis of a new recipe,
the linoleum surface covering, ‘TopshieldPro’, will be

LINOLEUM ‘MARMOLEUM LINEAR’37

VINYL COLLECTION ‘SARLON & MODUL΄UP DIVERSITY’

launched in spring 2022. It increases the resistanceand protection, in particular with regard to scratches
and disinfectant agents.
New production technology extends design
diversity in vinyl coverings
The newly installed digital printer for vinyl coverings inFrance and the newly developed surface technology
XtremPURTM formed the basis for the relaunch of var­ious vinyl collections with sound-absorbent properties
as well as easy and fast installation options and formats,combined under the collection name ‘sarlon & modul’up diversity’.

‘DIVERSE INSTALLATIONOPTIONS ARE IN DEMAND’VERSATILE VINYL DESIGNS IN DIGITAL PRINT

Diverse designs with surprising effects or loose-lay
versions are convincing customers in applications in
training facilities, in offices, in the healthcare sector aswell as in multi-unit housing refurbishments. Theyshow their advantages optimally in renovation projects where a rapid change of floor coverings is required.
They are phthalate-free and certified with regard toanti-bacterial properties.
Extensive collection renewal ofentrance flooring systems
The new, very extensive collection of entrance flooring
systems ‘coral world series 2021’ includes eight productlines for the widest possible range of applications, andis based on the latest color trends, coordinated andeasily combinable with other Forbo collections. Alongside the usual sheet and mat formats, they are alsoavailable in easy-to-install tile formats. The range has anincreased proportion of recycled polyamide, which isan additional benefit for the environment.

MOVEMENTSYSTEMSEFFICIENCYSEAMLESS­MOVEMENTOur energy-saving conveyor belts are often running
24 hours a day, 7 days a week in distribution and lo­
gistics centers, but they can overcome the challengesof even the most complex tasks reliably and efficiently. AmpMiser™ 2.0, the new generation of conveyor
belts, saves up to 50 percent on the operating powerre­quired thanks to a special coating. As a result, CO2
emissions are saved accordingly. With several kilometers of belt material often in use at such centers, thecontribution of this technology is considerable. AmpMiser belts are particularly well suited to operations
with ­packaged goods and not only save power but
also run more quietly than other installations – a plus
for the staff involved.

40

FORBO ANNUAL REPORT 2021 – ACTIVITY REPORTMOVEMENT SYSTEMS:INVESTMENTS TO SUPPORTGROWTH‘We can look back on a successful reporting year, despite the challenges inthe supply and value chain. The countries worst affected by declining demand in the prior year mostly recovered
with above-average growth. As a result,our production and fabrication plants
saw a strong recovery in capacity utilization, which led to a marked increasein earnings. Reduced freight capacity
Marc Deimling
and bottlenecks in the availability of Executive Vice President
raw materials brought additional costs, Movement Systems
which made it necessary for us to adjust
prices. At the same time, we initiatedfor currency effects, sales above
selective capacity expansion for certain Adjusted
pre-pandemic levels
production lines and for markets with All three regions and product lines contributed to this
above-average growth, coupled with growth, including newly concluded key account contracts for products and services. Sales growth wastechnological innovations.’
The Movement Systems division generated net sales of
CHF 402.2 million in the year under review (previous
year: CHF 360.7 million), which was equivalent to anincrease of 11.5% year on year in the corporate currency (11.9% in local currencies). The division accounted
for 32.1% of Group sales in 2021. The majority of markets contributed to this gratifying sales growth. Operating profit (EBIT) increased sharply by 51.3% to CHF 54.3
million (previous year: CHF 35.9 million), due primarily
to improved utilization of production and fabrication
capacities. The positive impact of these economies ofscale is based on optimized operating structures, increased productivity, and improved efficiency. Pricing
adjustments on our part made a further contribution.
The EBIT margin rose accordingly by 3.5 percentage
points to 13.5% (previous year: 10.0%).

strongest in Europe, also reached two digits in theAmericas, and was somewhat lower in Asia/Pacific. Adjusted for currency effects, sales increased above thepre-pandemic levels of 2019.

Most of the European markets saw double-digit
growth. The catch-up effects were clearly felt in Southern Europe, in the important Italian and Spanish markets. Other countries badly affected in the previous
year, such as Great Britain and France, showed a gratifying recovery. The key market of Germany and Switzerland saw a strong increase in sales, although they had
been less significantly affected than others the previous
year. Other positive signs worth noting were seen in thegrowth markets of Poland and Russia.
In the Americas region, the USA and Mexico were themain growth markets. The US market attained double-digit growth, despite the challenges after the upturn of finding qualified staff, above all for fabrication.
The Mexico growth market was able to build on thegood level achieved the previous year, thanks mainly tocatch-up effects in the customer segments of industrial
production and raw material processing. The newly established location in Columbia developed well.
In the Asia/Pacific region, the main market, China, as
well as Australia and India, contributed with a double-digit increase in sales. Japan and other, smaller,markets in Southeast Asia reported gratifying sales
growth.

41

Growth in all the main customer segments
The food segment, which is the most resistant to economic fluctuations, reported moderate growth as in
the previous year. The industrial manufacturing segment, which was strongly affected by the pandemic restrictions, saw an above-average recovery. Sales growthin the logistics segment was very gratifying, continuing
to be driven by e-commerce package distribution centers, though still showing signs of hesitancy in the airport infrastructure segment. The uninterrupted growthin e-commerce had a positive impact on the paper andprinting industry segment, as the demand for corrugated board and cardboard packaging rose accordingly.
The raw material processing and textiles segments
showed pleasing progress; demand for sports treadmills, which are widely used in fitness centers owing totheir durability, was more subdued.

Investments to drive future growth
In addition to a wide variety of product developments,
we have undertaken capacity expansion in productlines and markets with above-average growth, basedon cutting-edge technologies that increase efficiency
and reduce CO2 emissions.

Application-specific innovations
Despite continuing restrictions on personal customer
contacts, which are important for the development
and test phases of our application-specific products, wewere able to introduce innovative products across all
product lines for a variety of customer segments:

We opened local fabrication and service centers in Atlanta and Kansas (USA), Frankfurt and Hamburg (Germany) and Siberia (Russia), which will enable us to serve
customers more efficiently and professionally.

The Transilon unit developed curved belts that are versatile in use for industrial-scale laundries and logistics
applications requiring low friction and antistatic properties. A further development was a belt aimed specifically at the food-processing industry. It is highly resistant to hot water and frequent washing, ideal for
producing and processing dough, and making sushi
using sticky rice. A belt that is particularly suited for use
in long cooling tunnels was developed for the chocolate industry.
The plastic modular belt Prolink Series 8 has been extended with new options designed for industrial applications in numerous processes requiring high levels of
power transmission and good gripping properties forreliable transport of goods. The new Series 17 is suitablefor use in industrial applications such as parcel distribution and in processing corrugated board and paper.
In the Extremultus unit we have developed specific antistatic conveyor belts for weaving and spinning mills,
as well as for the paper, packaging, and printing industry, with enhanced grip properties and precise productpositioning.
In the area of robust Transtex belts, we have produced
a roughened belt surface for the manufacture of façade
panels in construction applications.

At the production site for Prolink plastic modular belts
in Denmark, another step in the expansion program
was completed with a new production building to increase the capacity of injection molding machines. A
newly installed heat recovery system at the same plantmakes it possible to use process energy to heat the
new offices and production building. A new production hall was built in Pune, India, offering significantly
higher fabrication capacity and a base from which local
service personnel can cover a radius of up to 750 km.

Good basis for 2022
The market launch of the complete Fullsan range – thenew homogenous conveyor belt product line – is a
­focal point in 2022. After the simple belt construction,
two further innovative, more complex belt types will beready for launch in the course of the summer. The fullscale start-up of the expanded Prolink production capacity in Denmark is intended to support this successful product line. Additional production capacity forTransilon belts is at the planning stage. The challenge
we continue to face is to react to the limited availabilityof raw materials and further cost increases affecting logistics and raw materials by imposing price rises of ourown as the situation demands.

42

FORBO ANNUAL REPORT 2021 – ACTIVITY REPORTINNOVATIVE AND­APPLICATION-SPECIFIC
Wherever drive forces are being transmitted and automated production andconveyance processes are runningsmoothly, Movement Systems is usually not far away. Our solutions for different constellations and requirements inthe widest possible range of industries
are known for innovation, precision, reliability and economy. With our knowhow we are profiling ourselves as acompetent partner for the development of industry-specific and individual solutions.
Our application know-how in diverse processing andproduction processes offers customers the corresponding advantages, and allows them to increase efficiency. Inspired by these experiences, in the reporting year we also developed innovations for various
customer segments.

TRANSILON BELT FOR DOUGH PROCESSING INDUSTRY

Hygiene-sensitive applications for the­food-processing industry
As diverse as the foods are that are conveyed on conveyor belts for production, processing and packing,just as specific are the corresponding belt solutions
and surface coatings for these individual requirements
to ensure efficiency, quality, hygiene, and the delicate
conveyance of the foods.
In the area of Transilon, a special belt was developedwith metal-detectable upper and running side coating
as well as high cut resistance. This special two-sided
coating allows particles in the coating that could possibly contaminate the conveyed product to be detected by the automated control system. In this way wesupport the quality and hygiene concepts of ourfood-processing customers. The mate belt surface
supports easy cleaning and has very good releaseproperties. The belt is suitable for use in bakeries,
dough and couscous processing, dairies, meat andpoultry industry, and sweet goods production.

TRANSILON BELT WITH METAL-DETECTABLE COATING

43

TRANSILON BELT FOR FLEECE MATERIALS PRODUCTIONPROLINK PLASTIC MODULAR BELT SERIES 17

Another belt was developed especially for the conveyance of unpacked foods, mainly for the dough-processing industry. The dehesive surface structure allows
very good release properties so that the shape of thedough is optimally maintained without any further addition of flour. Another application field is the processing of boiled, sticky rice for the production of sushi, orboiled couscous for use in convenience meals. Accordingly, the belt is suitable for frequent cleaning, alsowith hot water.

Customer-specific industrial applications
The highly robust, newly developed Prolink Series 17of plastic modular belts is especially suitable for industrial applications such as, for example, in parcel distribution centers or in the processing of corrugated cardboard and paper. The closed, smooth surface with low
weight offers high rigidity and tensile strength, and,due to the underside of the belt, is also especially silent
and hardwearing. Special flame-inhibiting versions are
possible for the automotive industry, and for applications in the steel and recycling industry special belt
types with hardwearing, cut-resistant surface are available.

‘BELT PROPERTIES OFFER For the production of fiber products such as fleece mathat are made in high-speed systems, a lightADDED VALUE’ terials
weight Transilon belt was developed that has electro-

static properties and is highly resistant to chemical
agents such as textile auxiliary agents. Such fleece­materials are used in various applications: for medical
and hygiene products such as face masks, sanitary
towels and diapers, as well as for fleece jackets or as
insulating material in cars and for geotextiles.

44

FORBO GESCHÄFTSBERICHT 2021 – AKTIVITÄTENBERICHT

45

ORGANIZATION
Executive BoardGroup structure
Board of Directors

46
48
50

46

FORBO ANNUAL REPORT 2021 – ORGANIZATIONEXECUTIVE BOARD

Jean-Michel Wins, Michael Schumacher, Andreas Jaeger, Marc Deimling

47

Michael Schumacher

Andreas Jaeger

Michael Schumacher, born in 1969, is a Swiss citizen.
He graduated in Materials Engineering at the Swiss
Federal Institute of Technology (ETH) in Zurich andcompleted an MBA at INSEAD in France. He began his
international professional career in 1995 at McKinsey,
where he occupied a number of roles during a tenyear period, ultimately as Associate Principal in Switzerland and Canada. In 2005, he moved to the Geberit
Group, where he was Head of Group Marketing until
2007, and subsequently held the positions of CEO
Asia/Pacific and Head Greater China until 2011. From2011 to 2021, he was with Saint-Gobain, first as CEO of
Sanitas Troesch and then also from 2017 to 2018 as
CEO of Saint-Gobain Building Distribution Germany.
From 2019 to 2021, he held the position of CEO­Saint-Gobain Switzerland. He joined our company in
September 2021 and took over as Chief Executive Officer and Chairman of the Executive Board of the ForboGroup as of October 2021.

Andreas Jaeger, born in 1972, is a Swiss citizen. He hasa degree in Business Administration from the Universityof Applied Sciences in Zurich and an Executive Master’sin European and International Business Law from the
University of St. Gallen. He is also a certified public accountant. He began his professional career as an accountant at PricewaterhouseCoopers in 1998 and waspromoted to a management position in 2002. He subsequently worked for IBM Business Consulting Services
and ifb Suisse as a managing consultant from 2003 to
2006. In 2006, he joined Holcim Group Support Ltd as
Corporate Controller, and in 2008 took on the role ofHead of Corporate Reporting. From 2012 to 2016, he
was Chief Financial Officer at Holcim in Ecuador. Back in
Switzerland, he worked as Head of Corporate Controlling at the Geberit Group from 2016 until the end of
2020. Andreas Jaeger joined the Forbo Group in January 2021 as Chief Financial Officer and member of the
Executive Board.

Jean-Michel Wins

Marc Deimling

Jean-Michel Wins was born in 1967 and is a Belgian aswell as German citizen. He studied business administration and languages at the IPET in Nivelles, Belgium, andbegan his professional career in Germany at Calberson
GmbH, where he held various specialist functions. He
then moved to S­ imut Sicherheit GmbH for two years,
where he was in charge of sales and marketing. From1992 to 1996 he was Export Manager at Brabus GmbHand from 1996 to 2002 he held various sales and man­agerial functions at Hirschmann Electronics. In 2002 heswitched to Grammer AG, headquartered in Germany,
where he held a number of international sales and­se­nior management positions; in 2009 he was appointed Vice President responsible for the Offroad Seating­Business Unit. As a member of the Executive Board,
Jean-Michel Wins took over management of theMovement Systems division in January 2013. He wasappointed as Head of the Flooring Systems division in
January 2018.

Marc Deimling was born in 1970 and is a German citizen. He holds a degree in economics from the Westphalian Wilhelm University in Münster, Germany, andlaunched his professional career as assistant to the
management of M-Tec Textilmaschinenbau GmbH. In
1999 he moved to Dörries Scharmann TechnologieGmbH for six years, where he was head of the Service
Division. From 2005 to 2008 he was a member of management at Gehring GmbH, where he was responsible
for the areas of distribution, project planning, project
management, production, after sales and marketing.
He was then Chief Executive Officer at TMS Turnkey
Manufacturing Solutions GmbH in Austria until the endof 2017, where he was responsible for finance/controlling, IT, procurement, design, production, quality,
after sales and marketing. Marc Deimling was appointed to head the Movement Systems division as a member of the Executive Board in January 2018.

Chief Executive Officer

Executive Vice President Flooring Systems

Chief Financial Officer

Executive Vice President Movement Systems

48

FORBO ANNUAL REPORT 2021 – ORGANIZATIONGROUP STRUCTURE
Forbo has performed better than average in comparison with other listedcompanies in recent years. Today, with
its two focused divisions and their
attractive product portfolios, Forbo isa world leader in its markets. The
company possesses significant re­sources necessary for further strategic
development. Its strategy aims tocontinue the successful trend of recent
years on the one hand and, with theavailable resources, to further strengthen our positions in the global marketplace on the other.

Tasks of the Executive
Chairman of the Boardof Directors– Leading the Board of Directors– Preparing the decisions of the Board of Directors
and ensuring they are executed– Representing and positioning theGroup in the public– Overall management of strategy ­development and involvement in realizing
key strategic projects– Management of relationships with key
accounts and business as well as sector andcapital market partners

T asks of the Chief
Executive Officer– Operational management of the Group– Leading the Executive Board– Development and operational implementationof the strategies– Implementation and monitoring of multi-yearplanning and budgets– Supporting the Executive Chairman of theBoard of Directors in preparing important
projects relating to strategy as well as personnel
and finances for discussion and decision-taking
by the Board of Directors

49

BOD / HRNC / RC / AFC

BOD Board of Directors
HRNC Human Resources and Nomination Committee
RC Remuneration Committee
AFC Audit and Finance Committee

Executive Chairmanof the Board of Directors

Board of Directors Office
Investor Relations
Corporate Communications
Internal Audit
CEOStrategy and M & A
Corporate Development
Corporate HR

Executive Vice President
Flooring Systems

Executive Vice President
Movement Systems

CFO

Northern/Central/Eastern
EuropeEurope/Middle East/Africa

Corporate Controlling
and Reporting

Southern Europe/
Middle East/Africa

AmericasAsia/PacificCorporate Treasury andInsurances

Americas

Conveyor and Process Belts

Corporate Tax

Asia/Pacific

Plastic Modular Belts

Risk Management

Linoleum Floor Coverings

Flat Belts

Corporate Legal Services

Vinyl Floor Coverings

Operational Areas

Corporate IT

Textile Floor Coverings

Business andProduct Development

F & A Managers
Group Companies

Building and Construction
Adhesives

MarketingOperational Areas

FinanceBusiness Development andMarketingIT

Finance and IT
Human Resources

Human Resources

Member of the Executive Board

50

FORBO ANNUAL REPORT 2021 – ORGANIZATIONBOARD OF DIRECTORS

Dr. Reto Müller, Dr. Peter Altorfer, This E. Schneider, Claudia Coninx-Kaczynski, Michael Pieper, Vincent Studer

51This E. Schneider
Executive Chairman

Member of the Board of Directors of Rieter Holding AG, Winterthur
Member of the Board of Directors of Autoneum Holding AG, Winterthur

Michael Pieper

Vice Chairman and independent1) member
Owner of the Artemis Holding AG, Hergiswil
Chairman of the Management Board of Artemis Group, Hergiswil
Member of the Board of Directors of various Artemis and Franke subsidiaries worldwide
Member of the Board of Directors of Arbonia AG, Arbon
Member of the Board of Directors of Bergos AG, Zurich
Member of the Board of Directors of Autoneum Holding AG, Winterthur
Member of the Board of Directors of Reppisch-Werke AG, Dietikon
Member of the Supervisory Board of Duravit AG, Hornberg (D)Dr. Peter AltorferVice-Chairman, Lead Independent Director and independent1) member
Partner at the law firm Wenger & Vieli AG, Zurich
Member of the Board of Directors of BIH SA, Rapperswil-JonaVice-Chairman of the Board of Directors of Privatbank Bellerive AG, Zurich
Vice-Chairman of the Board of Directors of Nomura Bank (Schweiz) AG, Zurich
Member of the Board of Directors of H. Kracht’s Erben AG, Zurich
Member of the Board of Directors of Sanatorium Kilchberg AG, Kilchberg
Further mandates with non-listed investment and real estate companies
as well as charitable foundations in Switzerland

Claudia Coninx-Kaczynski
Independent1) member

Member of the Board of Directors of Swisscontent AG, Zurich
Member of the Board of Directors of Awina AG, Zurich
Member of other Boards of Trustees

Dr. Reto Müller
Independent1) member

Partner at BLR & Partners AG, Thalwil
Chairman of the Board of Directors of SWISS KRONO Holding AG, Lucerne
Chairman of the Board of Directors of Utz Holding AG, Bremgarten
Member of other Boards of Directors and Advisory Boards

Vincent Studer
Independent1) member

Partner, member of the Board of Directors and of the management of T + R AG, Gümligen/Berne
Member of the Board of Directors of Bank EEK AG, Berne
Member of other Boards of Directors or Boards of Trustees
1)

Independent as defined in the ‘Swiss Code of Best Practice for Corporate Governance’52

FORBO GESCHÄFTSBERICHT 2021 – AKTIVITÄTENBERICHT

53

THE FORBO
SHARE

54

FORBO ANNUAL REPORT 2021 – THE FORBO SHARETHE FORBO SHARE
The first two months of the 2021 stock market year were characterized by various uncertainties, not least in connection with the COVID-19 pandemic. After trading until the end of February almost 200 points lower than at
the start of the year, the Swiss Performance Index (SPI) started to climb and had already reached the 14,000-point
mark before the end of March. In May there was another period of skepticism, albeit not enough to prevent the
SPI from passing the 15,000-point mark after the first week in June. Shortly after the middle of August it was already at 16,000 points. Renewed uncertainties in September did cause a decline of around 1,000 points, but thisdownturn was fully compensated for before mid-November. Towards the end of the year there were brief ups
and downs, and the SPI closed the stock market year at 16,444 points, corresponding to year-on-year growth ofover 23%.
The Forbo share largely tracked the performance of the SPI. However, a comparison shows the Forbo share outperforming the SPI from the end of February to the beginning of June and from mid-July to the beginning of
October, at times significantly so. From mid-October to the end of December, the performance trends of bothran parallel. The Forbo share closed the year at CHF 1,870, equivalent to an increase in value of over 23%. Taking
the dividend into consideration, this corresponds to an actual increment of 24.5%.
For a number of years now the performance of the Forbo share has been steady and above average. Since theend of 2005, the share has outperformed the SPI on average in roughly two years out of three. In this period, theForbo share has generated 3.4 times as much value growth as the SPI (taking into account dividend distributions).

The Forbo share in comparison to the SPIForbo share
SPI
2,100

630%

1,850
460%

1,600
1,350

290%

1,100
850

120%

600
350

– 50%

100
2006

2021

55

Share capital
Issued registered shares1)
Thereof:
Shares outstanding
Share buyback programs
Other treasury shares
Reserve shares (without dividend rights)

2021
number
1,650,000

2020
number
1,650,000

2019
number
1,650,000

2018
number1,800,000

2017
number1,800,000

1,424,870
150,62553,086
21,4191,579,235
049,346
21,4191,601,315
027,266
21,4191,601,718
150,000
26,863
21,4191,704,444
63,105
11,032
21,419CHF
165,000

CHF
165,000

CHF
165,000

CHF
180,000

CHF
180,000

142,487
15,063
5,309
2,142

157,924
0
4,935
2,142

160,132
0
2,727
2,142

160,172
15,0002,686
2,142

170,444
6,311
1,103
2,142

CHF
339
91.6
25.04)
1.24)
1.74)
27

CHF
429
66.6
20.0
1.25)
1.95)
30

CHF
422
86.3
23.0
1.35)
1.75)
27

CHF
354
82.4
21.00
1.35)
1.65)
25

CHF
383
22.4
19.00
1.15)
1.45)
85

CHF
2,040
1,498
1,870
3,366
2,472
3,086

CHF
1,729
1,044
1,518
2,853
1,723
2,505

CHF
1,799
1,353
1,648
2,968
2,232
2,719

CHF
1,620
1,302
1,381
2,916
2,344
2,486

CHF
1,669
1,313
1,505
3,004
2,383
2,709

Issued nominal capital
Total
Thereof:
Shares outstanding
Share buyback programs
Other treasury shares
Reserve shares (without dividend rights)

Data per share
Group shareholders’ equity per share2)
Group profit per share (undiluted)2) 3)
Gross dividend and cash distribution
Gross dividend yield (in %)4) 5)

High
Low

Payout ratio6) (in %)Stock market statistics
Share priceMarket capitalization (m)7)

High
Low
Year-end
High
Low
Year-end

1) Par value per share in 2021, 2020, 2019, 2018 and 2017: CHF 0.10.
2) Based on the weighted average of the number of shares as set out innote 11 ‘Earnings per share’ on page 116 of the financial report.
3) See note 11 ‘Earnings per share‘ on page 116 of the financial report.
4) Proposal of the Board of Directors to the 2022 Ordinary General Meeting.
5) Calculated on the basis of a cash distribution in the form of a dividend.
6) Gross cash distribution as a percentage of Group profit.
7) Total number of shares multiplied by the corresponding share price.

CORPORATE
GOVERNANCEREPORT

58

FORBO ANNUAL REPORT 2021 – CORPORATE GOVERNANCE REPORTCORPORATEGOVERNANCEREPORTAt Forbo, the concept of corporate governance encompasses the entire set of principles and rules on organization, conduct, and transparency that are designed toprotect the company’s long-term interests. Forbo’s aim is to strike a careful balance
between management and control. The central rules are contained in the Articles of
Association, the Organizational Regulations, and the Regulations of the Committeesof the Board of Directors. The following information is set out in line with the Direc­
tive on Information relating to Corporate Governance (‘DCG’) and the relevant publications of SIX Swiss Exchange.

Group structure and shareholders
Group structure
Forbo Holding Ltd, domiciled at Lindenstrasse 8, 6340 Baar, is a limited company under Swiss law. The holding
company holds all subsidiaries, directly or indirectly, that belong to the Forbo Group. The shares of Forbo Holding
Ltd (security number 000354151/ISIN CH0003541510) are listed on SIX Swiss Exchange. A financial overview of
the Forbo Group (including market capitalization) can be found on page 17. The operational structure of theGroup is shown in the organizational chart on page 49. The scope of consolidation of Forbo Holding Ltd does
not include any listed companies. The non-listed companies within the scope of consolidation of Forbo Holding
Ltd are listed in the section ‘Group companies’ starting on page 136 in the financial report section. The company
name and domicile, share capital, and percentage of participation, along with information relating to the allocation of the Group company to the Group’s businesses, can also be found in that section of this Annual Report.
Significant shareholders
As of December 31, 2021, 3,923 shareholders were listed in the share register of Forbo Holding Ltd, or 103 (2.6%)
fewer than in the previous year. As of December 31, 2021, Forbo Holding Ltd knew of the following significant
shareholders with a holding of more than 3%:
31.12.2021
as a percentage
Michael Pieper1)
Forbo Holding Ltd2)UBS Fund Management (Switzerland) AG
Swisscanto Fondsleitung AG
Credit Suisse Funds AG

25.01
13.64
3–5
3–5
3–5

1) Michael Pieper holds his interest directly and indirectly through Artemis Beteiligungen I AG.
2) Forbo Holding Ltd holds its shareholding directly and indirectly via Forbo Management SA.

Disclosure of significant shareholders and significant shareholder groups and their holdings is effected in accordance with the disclosure notices made in the year under review pursuant to Article 120 of the Financial Market Infrastructure Act (FMIA) and the provisions of the Ordinance of the Swiss Financial Market Supervisory Authority on Financial Market Infrastructures and Market Conduct in Securities and Derivatives Trading (FMIO-FINMA).

59

Below is a summary of the current notified shareholdings published in the year under review:
On November 20, 2021, Swisscanto Fondsleitung AG reported that it had passed the 3% threshold and held
49,901 shares, corresponding to 3.02% of the voting rights.
On December 14, 2021, Forbo Holding Ltd reported that it had passed the 10% threshold limit and held 221,406
treasury shares directly and indirectly through Forbo Management SA, Baar, corresponding to 13.42% of the vot­
ing rights.
On December 29, 2021, UBS Fund Management (Switzerland) AG reported that it had fallen below the 5%
threshold and held 82,095 shares, corresponding to 4.98% of the voting rights.
Full disclosure reports and all further published disclosure notices can be consulted on the publication platformof the disclosure office of the SIX Swiss Exchange (www.ser-ag.com � Fundamentals � Notices Market Participants � Significant Shareholders).
For further information on significant shareholders or shareholder groups, we refer the reader to the table on
page 58 and to page 154 of the financial report (duty of disclosure pursuant to Article 663c of the Swiss Code ofObligations [CO]).
Cross-shareholdings
Forbo Holding Ltd has not entered into any cross-shareholdings with mutual capital shareholdings or voting
rights.

Capital structure
Share capital
As of December 31, 2021, Forbo Holding Ltd had a fully paid up share capital of CHF 165,000, divided into
1,650,000 listed registered shares, each with a par value of CHF 0.10. Of this amount:– 65.21% were registered in the name of 3,899 shareholders with voting rights– 30.30% were shares of banks or of SIX SIS AG pending registration of transfer– 4.48% were registered in the share register without voting rights
There are no different categories of shares. Each share entitles the owner to one vote. Further information on the
Forbo share can be found on pages 54 and 55. Further information on the rights of participation associated with
the Forbo share can be found on pages 69 and 70 of this Annual Report.
By resolution of the Ordinary General Meeting of Forbo Holding Ltd on April 5, 2019, the Board of Directors was
authorized to buy back 10% of the share capital over a period of three years either via a second trading line on
SIX Swiss Exchange or by another means. These shares will be definitively canceled. On the basis of this authorization, the Board of Directors launched a buyback via a second trading line on the SIX Swiss Exchange on March
22, 2021. On November 26, 2021, the Board of Directors suspended the buyback via the second trading line andplaced an offer for the buyback of treasury shares at a fixed price. This was successfully concluded on December
10, 2021, with the repurchase of 74,835 (4.54%) registered shares. On December 14, 2021, the suspension was
lifted and the buyback via the second trading line continued. During the buyback via the second trading line, a
total of 75,790 (4.59%) treasury shares had been bought back as at December 31, 2021. The buyback via the­second trading line will be maintained until March 31, 2022, at the latest.

60

FORBO ANNUAL REPORT 2021 – CORPORATE GOVERNANCE REPORT

During the share buyback program 2019–2022, 150,625 (9.13%) treasury shares had been bought back as at December 31, 2021. At the next General Meeting, the Board of Directors will move for the cancelation of all registered shares repurchased under this share buyback program.
Conditional and authorized capital
Pursuant to Clause 4 of the Articles of Association (www.forbo.com � Investors � Ordinary General Meeting),
Forbo Holding Ltd has a maximum conditional capital of CHF 16,645, corresponding to 166,450 registered­shares to be paid up in full with a par value of CHF 0.10 each. If the conditional capital were drawn on in full, theshare capital would increase by CHF 16,645, or 10.09%, from the current level of CHF 165,000 to CHF 181,645.
The capital increase takes place in accordance with the Articles of Association through the exercise of option
and convertible rights granted in connection with the bonds issued by the company or one of its subsidiaries,or through the exercise of option rights granted to shareholders. Except for shareholder options, shareholders
have no right of subscription. Holders of option or convertible rights are entitled to subscribe to new shareissues. The registration of new shares is subject to the general restriction set out in Clause 6 of the Articles of
Association (www.forbo.com � Investors � Ordinary General Meeting), which stipulates that shareholders areentered in the share register with voting rights only if they declare expressly that they have acquired the sharesin their own name and for their own account.
There is no authorized capital.
Changes in capital
No changes to the capital of Forbo Holding Ltd were made in 2021 and 2020.
The Ordinary General Meeting of Forbo Holding Ltd on April 5, 2019, decided, based on the audit report of a licensed audit expert, to reduce the ordinary share capital of the company by CHF 15,000 from CHF 180,000 to
CHF 165,000 by canceling 150,000 shares with a par value each of CHF 0.10. It was further resolved to amend the
Articles of Association accordingly. The capital reduction was effected, and the new share capital of CHF 165,000
was entered in the Commercial Register on June 27, 2019.
Participation certificates and non-voting equity securities (‘Genussscheine’)
Forbo Holding Ltd has issued neither participation certificates nor non-voting equity securities.
Limitations on transferability and nominee registrations
Forbo Holding Ltd does not have any percentage limitations on voting rights. The Board of Directors may only
refuse to register shares in the share register if the purchaser of the shares does not expressly declare that he/
she has acquired the shares in his/her own name and for his/her own account.
Pursuant to Clause 6 of the Articles of Association (www.forbo.com � Investors � Ordinary General Meeting),
nominees may be entered in the share register with voting rights for up to a maximum of 0.3% of the registeredshare capital entered in the Commercial Register. Over and above this limit, nominees are only entered provided
the name, address, and shareholding of those persons are disclosed for whose account the nominee holds a
total of 0.3% or more of the registered share capital entered in the Commercial Register.
No statutory privileges exist and there is no restriction on the transferability of the shares of Forbo Holding Ltd.
Convertible bonds and warrants/options
Forbo Holding Ltd has no outstanding convertible bonds nor has it issued any marketable warrants/options.
Details on the long-term incentive plan for the Executive Board, under which future subscription rights are­outstanding, can be found on pages 84 to 88 as well as on pages 126, 127 and 135 of this Annual Report.

61

Board of Directors
Members of the Board of Directors
The cut-off date for the following information is December 31, 2021.
The Board of Directors brings together expertise and competencies in all the relevant areas (in particular entrepreneurial skills and leadership, industry and technology, strategy, sales and distribution, international markets,sustainability, innovation, digitization, risk management, audit and financial know-how).
With the exception of This E. Schneider, Executive Chairman of the Board of Directors, none of the members of
the Board of Directors listed below holds or has held any operational management positions for Forbo Holding
Ltd or its Group companies. In the three business years preceding the reporting period, no member of the Boardof Directors was a member of the Executive Board of Forbo Holding Ltd and, with the exception of This E. Schneider, no Board of Directors member sat on the Executive Board of any of its subsidiaries. There are no significant
business relationships between the members of the Board of Directors and Forbo Holding Ltd or its Group companies. The tasks of the Executive Chairman of the Board are described on page 48 of the Annual Report.
This E. Schneider, Executive Chairman
This E. Schneider, born in 1952, is a Swiss citizen. He studied economics at the University of St. Gallen (lic. oec.
HSG) and at the Graduate School of Business, Stanford University, California, USA. After holding various management functions in Europe and the USA, he joined the Executive Board of Schmidt Agence AG, where he was
responsible for strategic planning, operations and logistics from 1984 to 1990. From 1991 to 1993, he was Chairman and CEO of the publicly listed company SAFAA, Paris. In 1994, he became a member of the Executive Boardof Valora, with responsibility for the canteen and catering division. From 1997 to 2002, he was Delegate and Vice
President of the Board of Directors of Selecta Group. From March 2004 to December 2013, This E. Schneider wasDelegate of the Board of Directors and CEO, and from January to April 2014 Delegate of the Board of Directorsof the Forbo Group. He has been the Executive Chairman of the Board of Directors since the Ordinary General
Meeting of 2014. This E. Schneider is also a member of the Board of Directors of Rieter Holding AG in Winterthur
and Autoneum Holding Ltd in Winterthur.

Independent1) members of the Board of Directors
Michael Pieper, Vice Chairman
Michael Pieper, born in 1946, is a Swiss citizen. He studied economics (lic. oec. HSG) at the University of St. Gallen.
He has been with the Artemis Group (formerly the Franke Group) since 1988 and has been its owner and CEO
since 1989. Among others, he is a member of the Boards of Directors of Arbonia AG in Arbon, Bergos AG in Zurich, Rieter Holding AG in Winterthur, Autoneum Holding AG in Winterthur, Reppisch-Werke AG in Dietikon anda member of the Supervisory Board of Duravit AG in Hornberg (D). He was first elected to the Board of Directorsof Forbo Holding Ltd in 2000.
Dr. Peter Altorfer, Vice-Chairman and Lead Independent Director
Peter Altorfer, born in 1953, is a Swiss citizen. He studied law at the University of Zurich, where he took his doctorate in law (Dr. iur.). He was admitted to the bar as attorney-at-law in 1982. He attended the PED program at the
IMD, Lausanne. Until 1988, he worked at Bank Leu AG. He subsequently joined the law firm Wenger & Vieli in Zurich,where he is now a partner, specializing in bank and company law as well as estate planning. Peter Altorfer sits on
the Boards of Directors of several companies, including BIH SA in Rapperswil-Jona, Privatbank Bellerive AG in Zurich, Nomura Bank (Schweiz) AG in Zurich, Kracht’s Erben AG in Zurich, Sanatorium Kilchberg AG in Kilchberg, andfurther non-listed investment and real estate companies as well as charitable foundations in Switzerland. He has
been a member of the Board of Directors of Forbo Holding Ltd since March 2005.
1)

Independent as defined in the ‘Swiss code of best practice for corporate governance’62

FORBO ANNUAL REPORT 2021 – CORPORATE GOVERNANCE REPORTClaudia Coninx-Kaczynski
Claudia Coninx-Kaczynski, born in 1973, is a Swiss citizen. She took a degree in law at the University of Zurich(lic. iur.) and earned her Master of Law (LL. M.) at the London School of Economics and Political Sciences (LSE).
From 2006 to 2011, she managed the business of Faerbi Immobilien AG (subsequently Rietpark Immobilien AG)
in Zurich as a member of the Board of Directors. Subsequently, until 2014, she implemented various projects for
P. A. Media AG and Swisscontent AG in Zurich (M & A among others). Between 2013 and 2016, she was a memberof the Board of Directors of TX Group AG (formerly Tamedia AG), where in 2017 she was appointed Chairwomanof the Pool of Majority Shareholders. She is a member of the Board of Directors of Swisscontent AG in Zurich aswell as of Awina AG in Zurich and sits on other Boards of Trustees. She has been a member of the Board of Directors of Forbo Holding Ltd since April 2014.
Dr. Reto Müller
Reto Müller, born in 1951, is a Swiss citizen. He took a first degree in economics and completed his doctorate(Dr. oec. HSG) at the University of St. Gallen. He also completed the Stanford Executive Program and additional
training at IMD, INSEAD and the Harvard Business School. He is a founding partner of the Helbling group of companies, for which he worked from 1984 to 2016. From 2000 to 2011, he was the CEO and Chairman of the Boardand from 2011 to 2016 the full-time Chairman of the Board of Helbling Holding AG. Between 2002 and 2010,
Reto Müller was either a member or Chairman of the Regional Economic Advisory Board (Zurich) of the Swiss
National Bank. He was a member of the Council of SWISSMEM between 2008 and 2016. He is partner at BLR & Partners AG in Thalwil, Chairman of the Board of Directors of SWISS KRONO Holding AG in Lucerne and Utz Group in
Bremgarten, and is on other Boards of Directors and Advisory Boards. He has been a member of the Board of
Directors of Forbo Holding Ltd since April 2011.
Vincent Studer
Vincent Studer, born in 1962, is a Swiss citizen. He graduated from the University of Applied Sciences, Berne, andtrained as a Swiss certified public accountant. In addition, he has completed various national and international
training courses. From 1991 to 2008, Vincent Studer worked at Ernst & Young AG as an external auditor and washead auditor responsible for auditing the statements of national and international companies in various industries. In 2001, he was appointed a partner in the area of Auditing. Since 2008, he has been a partner and since2015 also a member of the Board of the accountancy and auditing firm T + R AG, Gümligen/Berne. From 2008 to
2021 he was a member of the management and head of the Auditing business unit there. Vincent Studer is amember of the Board of Directors of Bank EEK AG in Berne. He holds further directorships in other companies
and foundations. He has been a member of the Board of Directors of Forbo Holding Ltd since April 2009.

63

Board of Directors of Forbo Holding Ltd
as per December 31, 2021
Executive Chairman
THIS E. SCHNEIDER
Executive Director
Vice Chairmen
MICHAEL PIEPER
Independent1) non-executive Director
DR. PETER ALTORFER
Independent1) non-executive Director and Lead Independent Director
Members
CLAUDIA CONINX-KACZYNSKI
Independent1) non-executive Director
DR. RETO MÜLLER
Independent1) non-executive Director
VINCENT STUDER
Independent1) non-executive Director

First elected
at OGM

AFC

HRNC

RC

2004

–

–

–

2000

–

M

M

2005

M

C

C

2014

–

M

M

2011

M

–

–

2009

C

–

–

Secretary of the Board of Directors
NICOLE GRAF
Non-member

OGM:
AFC:
HRNC:
RC:		
V: 		
M: 		
1)
:		

Ordinary General Meeting
Audit and Finance Committee
Human Resources and Nomination Committee
Remuneration Committee
Chair
MemberIndependent as defined by the ‘Swiss code of best practicefor corporate governance’64

FORBO ANNUAL REPORT 2021 – CORPORATE GOVERNANCE REPORT

Statutory regulations governing the number of permissible activities
pursuant to Article 12 Paragraph 1 Section 1 OaER
In accordance with Clause 22 of the Articles of Association (www.forbo.com � Investors � Ordinary General
Meeting), members of the Board of Directors may hold no more than five mandates in listed and twenty mandates in non-listed legal entities. A mandate is defined as any activity on the senior managerial or supervisory
bodies of legal entities that are entered in the Swiss Commercial Register or comparable foreign registers anddo not belong to the Forbo Group. Mandates with associated companies outside the Forbo Group are deemed
to be a single mandate.
Election and term of office
The members of the Board of Directors are elected in individual votes for a one-year term of office, in accordancewith the Ordinance against Excessive Remuneration in Listed Public Companies (OaER). A year is defined as theperiod between two Ordinary General Meetings. In accordance with the Organizational Regulations of Forbo
Holding Ltd, members who have reached the 70th year of age resign from the Board of Directors at the Ordinary
General Meeting of the following year. The Board of Directors may, however, approve exceptions. In determining
the composition of the Board of Directors, importance is attached to the election of independent individuals
with international experience in industrial companies as well as in the financial and consultancy sectors.
The Articles of Association of Forbo Holding Ltd do not contain any regulations that deviate from the statutory
provisions for the appointment of the Chairman, the members of the Remuneration Committee, and the independent proxy.
Internal organizational structure
The allocation of tasks within the Board of Directors and the composition of the Board committees are shown in
the table on page 63.
Decisions are as a general rule taken by the full Board of Directors. The Board constitutes three standing committees from its own ranks – the Audit and Finance Committee (AFC), the Human Resources and Nomination Committee (HRNC), and the Remuneration Committee (RC) – to deal with clearly defined subject areas of overriding
importance. These three committees have mainly advisory and control functions. The members of the AFC and
HRNC are elected by the Board of Directors on an annual basis and can be dismissed at any time. The membersof the RC are elected annually by the General Meeting.
As a rule, the Executive Chairman of the Board of Directors chairs the meetings of the Board and the General
Meeting. He plans and conducts the meetings of the Board and the General Meeting. The meetings of the Boardand the relevant items on the agenda are prepared by the Executive Chairman. He monitors the execution of
the measures adopted by the Board. He is the direct superior of the CEO, is in regular contact with him, and hasan advisory and supervisory function. In addition, the Executive Chairman represents the Board and the ForboGroup vis-à-vis the public, the authorities, and the shareholders. The tasks of the Executive Chairman of the Boardand the demarcation of responsibilities from those of the CEO are set out in the section ‘Areas of responsibility’on pages 66 and 67.
The Vice Chairmen are tasked with deputizing for the Executive Chairman should the latter be prevented from
attending for any reason. In accordance with the Organizational Regulations and actual practice, the Vice Chairmen have no further duties.
The Vice Chairmen are elected by the Board of Directors.

65

The Board of Directors meets on being convened by the Executive Chairman as often as business requires but
at least four times a year. The items on the agenda must be announced at least five working days before the dayof the meeting. This notification period may be shortened in urgent cases. In 2021, the Board of Directors held
four meetings with members physically in attendance, as well as one virtual meeting and six telephone/videoconference calls. The meetings, both physical and virtual, each lasted a whole day, while the conference calls
took one to two hours each. Every Board member participated in all eleven meetings.
The Executive Chairman may invite members of the Executive Board or other senior employees to attend Board
meetings for individual items. In the 2021 business year, members of the Executive Board and other senior employees participated in the physical and virtual meetings of the Board of Directors for the agenda items that
affected them. No members of the Executive Board nor any other senior employees participated in the Board
meetings held by conference call. External consultants may participate in the meetings of the Board of Directors,
the AFC, the RC or the HRNC only in exceptional circumstances to deal with particular items. In the 2021 business
year, no external consultants participated in the meetings of the Board of Directors. Participation of external consultants in meetings of the AFC, RC and HRNC are listed in the chapters on the AFC, RC and HRNC on pages 65,
76, 77 and 78.
Audit and Finance Committee
The AFC advises the Board of Directors in respect of its duties on behalf of the Group in the areas of financial
reporting, the accounting standards and systems used, and decisions with significant financial implications. The
AFC monitors the activities of the internal auditors and the external auditors. Moreover, it establishes the audit
program of the internal auditors and proposes to the Board of Directors the choice of the external auditors forthe attention of the General Meeting. The CEO and the CFO are regularly requested to attend meetings in anadvisory capacity, while representatives of the internal and external auditors may attend on special invitation.
The AFC convenes as often as business requires, but at least twice a year. In the 2021 business year, two meetings
were held, each lasting about half a day. All members of the AFC were present at both meetings. The external
auditors were present for selected items on the agenda of the AFC’s meeting on the financial statements and at
the meeting to discuss the scope of the audit and the audit fee. The Ernst & Young representatives responsiblefor internal audit attended the discussions of the internal audit reports at both meetings. No external consultants
participated in the meetings of the AFC in the year under review.
The AFC brings together expertise and competencies in the areas relevant for the committee on the basis of
executive functions in other companies, current directorships in other firms, and previous responsibilities/mandates. The relevant information can be found on pages 61 and 62 of this Annual Report.
Human Resources and Nomination Committee
We refer to the explanations in the remuneration report on pages 76 and 77.

Remuneration Committee
We refer to the explanations in the remuneration report on pages 77 and 78.

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FORBO ANNUAL REPORT 2021 – CORPORATE GOVERNANCE REPORT

Areas of responsibility
The Board of Directors bears ultimate responsibility for the management of Forbo Holding Ltd. The main dutiesof the Board of Directors are the following non-transferable and inalienable tasks pursuant to the Swiss Code ofObligations and the Articles of Association:– overall management of the company and issuing of the necessary directives– definition of the organizational structure– determination of accounting, financial controlling, and financial planning principles– appointment and dismissal of persons entrusted with the management of the company– overall supervision of the persons entrusted with managing the company, particularly with respect
to compliance with the law, Articles of Association, regulations, and directives– preparation of the Annual Report as well as of the General Meeting and implementation of its resolutions– preparation of the remuneration report– notification of the court in the event of over-indebtedness
The Board of Directors bears ultimate responsibility for supervising and monitoring the management of thecompany and is responsible for the corporate strategy. It issues guidelines for business policy and is regularly
briefed on the current state of business.
Business to be dealt with by the Board of Directors is regularly submitted in advance to the AFC, HRNC, and RC,
ad hoc committees or individual members, depending on the subject, for review or an opinion. With the exception of its non-transferable and inalienable tasks, the Board of Directors may transfer tasks and responsibilities infull or in part to individual members of the Board or to third parties.
The Board of Directors is empowered to take decisions on all matters which are not reserved or transferred to
the General Meeting or another body of Forbo by law, the Articles of Association, or regulations.
Tasks of the Executive Chairman of the Board of Directors:– chairing of the Board of Directors– preparation and monitoring of the execution of the decisions of the Board of Directors– representation and positioning of the Group in the public– overall management of strategy development and involvement in realizing key strategic projects– management of relationships with key accounts and with business, sector and capital market partners
Tasks of the Chief Executive Officer:– operational management of the Group– chairing of the Executive Board– development and operational implementation of strategies– implementation and monitoring of multi-year planning and budgets– supporting of the Executive Chairman of the Board of Directors in preparing important projects relating tostrategy, personnel, and finances for discussion and decision-taking by the Board of Directors

67

The CEO reports to the Executive Chairman of the Board of Directors and as a rule participates in all Board meet­ings dealing with topics that are relevant for the exercise of his function. He is not a member of the Board of­Directors, though. All business management tasks that are not allocated to the Board of Directors or the Execu­tive Chairman of the Board and that do not require the approval of the Board of Directors are delegated to the
CEO and are carried out by him on his own responsibility. The CEO is responsible for ensuring compliance withthe provisions of the law, the Articles of Association, and regulations throughout the Forbo Group.
In carrying out his tasks, the CEO is supported by the members of the Executive Board, who report to him. The
Executive Board comprises the CEO, CFO, and the Executive Vice Presidents of both divisions; it is responsible forthe long-term success and market-driven management of the Forbo Group.
The members of the Executive Board are responsible for their particular area of activity and also bear joint responsibility for safeguarding the interests of the Group and achieving the financial Group result.
Information and control instruments vis-à-vis the Executive Board
At the meetings of the Board of Directors, any member may request information about any matter concerning theForbo Group. Outside the meetings, such requests for information are to be addressed to the Executive Chairman.
The CEO and the other members of the Executive Board inform the Board of Directors at each regular meeting
about the current state of business, important business events, and significant deviations from the budget.
The Chairmen of the AFC, the HRNC, and the RC report at the Board of Directors meetings on the activities of theircommittees and express the opinions and recommendations of the AFC, HRNC or RC on the business items on
which decisions are to be taken. Each member of the Board of Directors has the right to inspect the minutes of theAFC, HRNC, and RC meetings. The Executive Board reports to the AFC through the CFO in consultation with theCEO; it reports to the HRNC and RC through the CEO.
The Board is also regularly briefed outside meetings about events and challenges the Group is facing and the gen­eral performance of the divisions. In addition, the Executive Chairman and the two Vice Chairmen are in regularcontact when essential policy issues are involved. For important, particularly urgent events, the CEO informs the
Executive Chairman of the Board of Directors immediately.
The Executive Board meets as often as business requires, normally once a month. In the 2021 business year, elevenmeetings were held, with the meetings usually lasting half a day. In addition, the Executive Board also met for a
two-day workshop during the 2021 business year.
The CEO chairs the meetings of the Executive Board. For details concerning the participation of members of the
Executive Board in meetings of the Board of Directors and its committees, refer to the sections on internal organization and on the AFC, HRNC, and RC on pages 64 and 65, as well as 76 to 78.
The Board of Directors fulfills its supervisory and monitoring obligations also by means of financial reporting and
its role in the planning cycle. The internal and external auditors may assist the Board in this task. However, neither
the external auditors nor the internal auditors were invited to any meetings of the Board of Directors in 2021 asthere were no special incidents or topics for discussion.
As part of financial reporting, the Board of Directors is informed as a rule once a month in writing about thecompany’s current business performance and earnings situation by means of annotated income statements, key
ratios, and deviation analyses.

68

FORBO ANNUAL REPORT 2021 – CORPORATE GOVERNANCE REPORTThe Board of Directors is, moreover, involved in the company’s planning cycle. As a rule, the existing strategy is
subjected to a thorough review by the Board of Directors in the first half of the year. The revised strategy is quantified in the three-year medium-term plan, which is normally approved at mid-year by the Board of Directors. Basedon the medium-term plan, the Board of Directors sets the budget objectives for the coming business year. Thesebudget objectives form the basis of the detailed budget, which is discussed and adopted by the Board of Directors
in the fourth quarter.
The current business year is assessed in a first estimate always at the end of May and a second estimate in mid-­
October. On completion of the business year, the extent to which the budget has been met is checked and­deviations are analyzed. This analysis is used to derive appropriate measures, which are then implemented in thenext planning cycle.
Internal audit is effected by Ernst & Young, which has been commissioned for this purpose. Internal audit is­administratively subordinated to the Executive Chairman of the Board of Directors, is functionally independent,
and reports directly to the AFC.
The audits are conducted in accordance with an annual plan approved by the AFC. A distinction is made between
ordinary and special engagement audits. The latter consist of limited reviews, follow-up reviews, compliance audits,and other special engagements. Where necessary, the risks and weaknesses identified in these audits are minimized
or eliminated by measures adopted by management and are constantly monitored.
In 2021, eight Group companies were audited by Ernst & Young on the occasion of six internal audits. The internal
audits included, among others, the audit of control points defined in the framework of the internal control system(ICS) as well as various compliance reviews (including data protection) related to the audited business processes.
Lastly, additional risks and controls in connection with the audited business processes were analyzed. Six companies in Forbo Flooring Systems and two companies in Forbo Movement Systems were audited in the course of theinternal audits.
By means of self-assessments and management controls by division management, the implementation and reli­ability of the controls introduced with the ICS were examined to ensure that deviations were identified and thatappropriate corrective measures were implemented.
Risk management
The ongoing and systematic evaluation of current and future risks invariably involves identifying and capitalizingon opportunities. Forbo regards risk management as a managerial and working tool designed, among otherthings, to safeguard the tangible and intangible assets of the company.
Forbo has a risk-based insurance coverage in line with industry practice and has appropriately insured in particular operational risks such as property damage, business interruption and liability. The risks specifically in the areasof property damage and business interruption are examined in the context of periodic risk engineering reportsby external experts. For this purpose, production companies are visited at regular intervals, and comprehensive
surveys are worked through with local management. Action plans are drawn up and implemented based on therisks identified. These risk engineering audits have been prepared since 1990.
As regards business risks, Forbo addresses strategic risks as well as market and financial risks. In the area of market
risks, interest and currency risks are centrally monitored and hedged in certain cases. The liquidity and financing
of subsidiaries are also monitored centrally. For more information on this subject, refer to pages 131 to 134 of theAnnual Report.
With regard to the risk management process, refer to the relevant explanations on pages 131 to 134 (note 23 ‘Risk
assessment and financial risk management’) of the Financial Report section of the Annual Report.

69

Executive Board
Members of the Executive Board, other activities, and vested interests
The members of the Executive Board, their nationality, function, training, and professional career, as well as otheractivities and vested interests, are set out on page 47 of this Annual Report.
Statutory regulations governing the number of permissible activities
pursuant to Article 12 Paragraph 1 Section 1 OaER
In accordance with Clause 22 of the Articles of Association (www.forbo.com � Investors � Ordinary General
Meeting), members of the Executive Board may hold no more than two mandates in listed and seven mandates
in non-listed legal entities. The acceptance of mandates by members of the Executive Board is subject to priorapproval by the Board of Directors. A mandate is defined as any activity on the senior managerial or supervisory
bodies of legal entities that are entered in the Swiss Commercial Register or comparable foreign registers and do
not belong to the Forbo Group. Mandates with associated companies outside the Forbo Group are deemed to
be a single mandate.
Changes to the Executive Board
On January 1, 2021, Andreas Jaeger joined the Forbo Group, succeeding Urs Uehlinger, who left the company atthe end of February 2021, as Chief Financial Officer and member of the Executive Board of the Forbo Group.
­Michael Schumacher, Chief Executive Officer and Chairman of the Executive Board of the Forbo Group, joined theForbo Group on September 1, 2021, assuming the roles held by Stephan Bauer on October 1, 2021, who left atthat date.
Management contracts
Forbo Holding Ltd has concluded no management contracts with third parties.

Compensation, shareholdings, and loans
For information on this subject, refer to the remuneration report from page 75.

Shareholders’ participation rights
Voting right restriction and representation
The registration of shares with voting rights in the share register requires the consent of the Board of Directors.
Such consent may be withheld if the purchaser does not expressly declare that he/she has acquired and is holding
the shares in his/her own name and for his/her own account. Pursuant to the Articles of Association, nominees
may be entered in the share register with voting rights for up to a maximum of 0.3% of the registered share capital entered in the Commercial Register. The restriction also applies to shares that are subscribed or acquired
through the exercise of a subscription, option or convertible right. Resolutions on the amendment or abrogationof the clause on the registration of registered shares require a majority of two-thirds of the votes represented at
the General Meeting and the absolute majority of the par value of the shares represented.
Deviating from Article 689 Paragraph 2 CO, shareholders who are unable to attend the General Meeting in person
may not be represented by any third party of their choosing. They may only be represented by the legal re­presentative, the independent proxy, or another shareholder who is registered in the share register.

70

FORBO ANNUAL REPORT 2021 – CORPORATE GOVERNANCE REPORTElectronic participation in the General Meeting
Clause 12 of the Articles of Association (www.forbo.com � Investors � Ordinary General Meeting) defines therules for electronic issuing of instructions to the independent proxy; the precise modalities for this are definedby the Board of Directors. In accordance with Clause 14 of the Articles of Association (www.forbo.com � Investors � Ordinary General Meeting), voting and elections at the General Meeting are in principle conducted­electronically, unless the General Meeting decides that the ballot should be in writing or by a show of hands or
the Chairman orders such a ballot procedure.
Statutory quorums
The Articles of Association of Forbo Holding Ltd do not provide for quorums that are larger than those stipulated
by law for decisions of the General Meeting.
Convening of the General Meeting
The General Meeting is convened in accordance with the statutory provisions.
AgendaShareholders who represent at least 1% of the share capital may request that an item be placed on the agenda.
This request must be communicated to the Board of Directors in writing, indicating the proposals, at least 45 days
before the date of the General Meeting.
Entry in the share register
In accordance with Clause 12 of the Articles of Association (www.forbo.com � Investors � Ordinary General
Meeting), the Board of Directors, in its invitation to the General Meeting, announces the cut-off date for entries inthe share register authorizing shareholder participation and voting.

Changes in control and defense measures
Duty to make an offer
The Articles of Association of Forbo Holding Ltd do not contain an ‘opting-up’ clause or an ‘opting-out’ clausepursuant to Articles 135 and 125 of the Financial Market Infrastructure Act.
Clause on changes of control
As per year-end 2021, no clauses on changes of control existed in agreements or plans involving members of theBoard of Directors, the Executive Board or other members of management.

Auditors
Duration of the mandate and term of office of the Auditor in Charge
KPMG has been the Forbo Group’s auditors since 2015. The auditors are elected every year by the Ordinary Gen­
eral Meeting on a proposal by the Board of Directors. Rolf Hauenstein has been the Auditor in Charge since April
24, 2015. The term of office of the auditor in charge is limited to seven years.
Auditing fees
The auditing fees levied by the Group’s auditors for auditing the consolidated financial statements, including thestatutory audit of the individual financial statements of the holding company and the consolidated subsidiaries,
amounted to CHF 0.8 million in the year under review.

71

Additional fees
The additional consultancy fees that were invoiced by the auditing company amounted to CHF 0.1 million in 2021.
These fees were charged mainly for the provision of tax advice.
Information instruments of the external auditors
Where required, the external auditors prepare for the Executive Chairman of the Board of Directors, the CEO, andthe CFO an annual management letter reporting on their work and the results of their audit at Group level in theyear under review. The key points are submitted to the Board of Directors in the form of a comprehensive report.
The external auditors also prepare management letters on the subsidiaries they have audited. The AFC assesses
and evaluates the proposals and statements thus received and appraises the corrective measures taken by man­agement. At the AFC’s invitation, representatives of the external auditors attend the AFC meetings in an advisory
capacity. The Chairman of the AFC reports on the activities of the AFC and its assessment of the external auditors
at the meetings of the Board of Directors. Any member of the Board of Directors may inspect the minutes of the
AFC meetings.
At its meetings, the AFC assesses the performance and fees of the external auditors as well as their independence
in both their auditing and their non-auditing capacities. This evaluation is based on the documents prepared by
the external auditors and the discussions held with the external auditors in the meetings. It also draws on theevaluation of the CFO, who, if required, obtains the opinion of local management with regard to the audit workfor the subsidiaries. The criteria for the evaluation of the external auditors include, in particular, their technical andoperational competency, their independence and objectivity, punctual delivery of audit reports, the scope andfocus of the audits, and the ability to provide effective and practical recommendations. The assessment by the
AFC forms the basis of the proposal made by the Board of Directors to the Ordinary General Meeting regarding
the choice of the external auditors.

72

FORBO ANNUAL REPORT 2021 – CORPORATE GOVERNANCE REPORTBlackout periods
Forbo has specified general blackout periods associated with the publication of the Annual and Half-Year Reports.
Each general blackout period comes into effect on the first day following the respective reporting period andapplies until 23:59 CET on the day of publication of the Annual and Half-Year Reports. The general blackout period
covers all Forbo securities and applies regardless of whether the persons concerned are in possession of insider
information as defined in Article 2 FMIA. The general blackout period applies to all members of the Board of­Directors and the Executive Board of Forbo Holding Ltd, all employees at the Forbo Group head office in Baar,
Switzerland, the members of the management boards of both divisions and their assistants, and all employees
who have insight into the financial figures of a division, and any persons closely associated with them. The Securities Trading Compliance Committee, comprising the CFO, Head Corporate Treasury and Head Corporate Legal
Services, checks the list of those subject to the general blackout periods on a half-yearly basis, amending it asrequired. In each case, the Securities Trading Compliance Committee gives the persons affected by the general
blackout period prior notification by email.
In addition to the general blackout periods, special blackout periods can be imposed at any time, with the duration, scope, affected personnel and any exceptions being defined separately in each case.
As an exception, a transaction with Forbo securities is permitted during a blackout period if it is the result of a plan
drawn up outside the blackout period, the main details of the transaction (quantity, price, date) were specified
beforehand and the transaction cannot be influenced by the person concerned during the blackout period.
Any exceptions must be approved by the Securities Trading Compliance Committee, with the approval being
given outside the blackout period.

Information policy
Transparency for investors
Forbo provides objective and periodic communication to its shareholders, the capital market, the media, and the
public by reporting in a timely fashion on business trends and activities relevant to the company. The Executive
Chairman of the Board of Directors can be contacted directly for such information.
Shareholders receive summary reports on the business year as well as half-year reports. The Annual Report, likeall other published documents, is available in printed form as well as online at www.forbo.com � Investors. The
General Meeting is an additional source of information. Periodic publication of media releases, the annual media
and analysts’ conference, and road shows are further information tools for the media and the capital market.

73

Ad hoc communication
Registration for the automated dissemination of ad hoc releases in accordance with the guideline on ad hoc
publicity of the SIX Swiss Exchange is available at the following address:www.forbo.com � Media � Media releases ‘subscription service’
Notification to shareholders takes place through publication in the company’s official publication provided noother form of information is stipulated by law. Written notification to shareholders takes place through a simple
letter to the addresses listed in the share register.
A financial calendar with the key dates can be found on page 8 of this Annual Report. Further information on the
Forbo share is printed on pages 54 and 55 of this Annual Report.
Publications may be ordered by email, fax, or telephone:
Email communications@forbo.com
Phone + 41 58 787 25 25
Fax + 41 58 787 20 25
The contact address for Investor Relations is:
Forbo Management SA
Urs Christen, Head Investor Relations
Lindenstrasse 8
P.O. Box 1339
CH-6341 Baar
Phone + 41 58 787 25 25
The contact address for press information is:
Forbo Management SA
Karin Marti, Head Corporate Communications
Lindenstrasse 8
P.O. Box 1339
CH-6341 Baar
Phone + 41 58 787 25 25

REMUNERATIONREPORT

76

FORBO ANNUAL REPORT 2021 – REMUNERATION REPORTREMUNERATIONREPORT
Introduction
The report meets the provisions of the Ordinance against Excessive Remuneration in Listed Public Companies(OaER), which came into effect on January 1, 2014, and consequently fulfils the requirements of the Swiss Codeof Obligations.
Once a year, in a separate and binding ballot, the Ordinary General Meeting approves the maximum sum for the
total remuneration to be paid to the Board of Directors for the business year following the Ordinary General
Meeting. In addition, a vote is taken on the maximum total amount of fixed remuneration to be paid to the­Executive Board for the business year following the Ordinary General Meeting, the amount of short-term variable remuneration (bonus/short-term incentive) to be paid to the Executive Board for the business year preceding
the Ordinary General Meeting, as well as the maximum total amount of the long-term participation (long-term
incentive) for the Executive Board for the year of the respective Ordinary General Meeting.
The variable remuneration model for the Executive Board with the short-term incentive was supplemented bya long-term participation (long-term incentive) component, effective as of January 1, 2017. This long-term­incentive consists of a performance share unit plan. Its aim is to link a significant portion of the Executive Board’s
remuneration even more closely with the company’s long-term success and to make it more responsive to shareholders’ interests. Details on the long-term incentive can be found in the chapter ‘Elements of remuneration of
the Executive Board’ on pages 83 to 85. An amendment to the Articles of Association concerning this matter wasapproved by a large majority at the Ordinary General Meeting on April 6, 2017.
The shareholders will vote separately on the following four compensation motions at the 2022 Ordinary General
Meeting:– Maximum total remuneration for the Board of Directors for 2023
– Maximum fixed remuneration for the Executive Board for 2023
– Short-term variable remuneration of the Executive Board for 2021 (bonus/short-term incentive)– Maximum total amount of the long-term participation for the Executive Board for 2022
(long-term incentive plan 2022–2024)
The total remuneration was approved by a large majority in a consultative vote on the 2020 remuneration reportat the Ordinary General Meeting of April 1, 2021 (agenda item 4.1). Participants in the 2022 Ordinary General
Meeting will also be invited to vote in a consultative ballot on the entire 2021 remuneration report.

Content and methodology for determining
the remuneration
The Human Resources and Nomination Committee (HRNC): task and function
The Human Resources and Nomination Committee (HRNC) advises the Board of Directors in exercising its responsibilities for the Group in matters relating to human resources and nominations both for the Board of Directors
and the most senior level of management. More specifically, the HRNC formulates personnel policy proposals forappointments to the Board of Directors and to the posts of Chairman, CEO, and other Executive Board members
for submission to the Board of Directors. Furthermore, it assesses and approves the proposals of the Executive
Chairman of the Board and the CEO regarding Executive Board appointments and employment contracts. It also
approves the acceptance of mandates by members of the Executive Board in companies that are not part of the
Forbo Group.

77

The Human Resources and Nomination Committee meets as often as business requires, but at least twice a year.
In the 2021 business year, the HRNC held one meeting with personal presence, as well as one video conference
call, each lasting a couple of hours, each lasting about one hour. No external consultants participated in thesemeetings.
The Human Resources and Nomination Committee consists of at least two members of the Board of Directors.
The Ordinary General Meeting of April 1, 2021, elected Dr. Peter Altorfer (Chair), Claudia Coninx-Kaczynski andMichael Pieper to the HRNC for the 2021 business year.
The HRNC brings together expertise and competencies in the areas relevant for the committee on the basis of
executive functions in other companies, current directorships in other firms, and previous responsibilities/mandates. The relevant information can be found on pages 61 and 62 of this Annual Report.
The Remuneration Committee (RC): task and function
The Remuneration Committee supports the Board of Directors in defining the principles of remuneration policy
and in determining the remuneration paid to members of the Board of Directors and the Executive Board out of
the total sum of remuneration as approved by the Ordinary General Meeting. It supports the Board of Directors
in drawing up participation programs and in all other tasks related to remuneration. The Remuneration Committee formulates appropriate recommendations for submission to the Board of Directors. The Board of Directors
may delegate further duties and powers to the Remuneration Committee. The Executive Chairman of the Boardof Directors is regularly invited to its meetings in an advisory capacity, as is the CEO in certain circumstances.
Agenda items and matters directly affecting the function or the person of the Executive Chairman of the Boardof Directors or the CEO are deliberated in their absence.
The Remuneration Committee meets as often as business requires, but at least twice a year. In the 2021 business
year, the Remuneration Committee held one meeting with personal presence, as well as one video conference
call, each lasting a ­couple of hours. No external consultants participated in these meetings.
The Remuneration Committee consists of at least two members of the Board of Directors. The Ordinary General
Meeting of April 1, 2021, elected Dr. Peter Altorfer (Chair), Claudia Coninx-Kaczynski and Michael Pieper to theRemuneration Committee for the 2021 business year. The members of the Remuneration Committee are independent (non-executive) members of the Board of Directors, i.e. they have never belonged to the managementof Forbo and have no, or only negligible, business relations with the company, though they may be shareholders.
The RC brings together expertise and competencies in the areas relevant for the committee on the basis of
executive functions in other companies, current directorships in other firms, and previous responsibilities/mandates. The relevant information can be found on pages 61 and 62 of this Annual Report.
Decision-making process of the Remuneration Committee
The maximum amount of the total remuneration paid to the Board of Directors and the maximum fixed remuneration paid to the Executive Board are usually determined by the Remuneration Committee once a year in thespring for the following business year and are submitted to the Board of Directors for acceptance at its February
meeting. The amount of the short-term variable remuneration (bonus/short-term incentive) and the definitionand objectives of the long-term participation (long-term incentive) for the Executive Board are determined by the
Remuneration Committee once a year in November for the following year.

78

FORBO ANNUAL REPORT 2021 – REMUNERATION REPORTThe Executive Chairman of the Board of Directors is regularly invited to the meetings of the Remuneration Committee in an advisory capacity, as is the CEO in certain circumstances. Agenda items and matters directly affecting
the function or the person of the Executive Chairman of the Board of Directors or the CEO are deliberated in theirabsence. The other members of the Executive Board are not entitled to attend or participate in these meetings.
ProposalAcceptanceApproval

RC
RC
RC

BoD
BoD
BoD

Ordinary General Meeting for the following business year
Ordinary General Meeting for the following business year
Ordinary General Meeting for the preceding business year

RC

BoD

Ordinary General Meeting for the current business year

RC

BoD

Performance targets – Executive Board regarding
long-term participation (long-term incentive)

RC

BoD

Performance targets – CEO

RC

BoD

Remuneration budget
Maximum total remuneration of the Board of Directors
Maximum fixed remuneration of the Executive Board
Short-term variable remuneration of the Executive Board(bonus/short-term incentive)
Maximum total amount of the long-term participation
for the Executive Board (long-term incentive)
Performance targets
Performance targets – Executive Board regarding shortterm variable remuneration (bonus/short-term incentive)

Important changes in 2021
In the business year 2021, no important changes to the remuneration system were made either for the Board of
Directors or for the Executive Board.

Principles of remuneration for the Boardof Directors and the Executive Board
Forbo’s remuneration strategy is geared to long-term and sustainable corporate development. The aim is to remunerate employees appropriately for their achievements, commitment, and performance, and thereby en­
courage their long-term loyalty to the company. The purpose of paying part of the remuneration in the form ofshares is to link the interests of the managers to those of the shareholders. The portion of the remuneration paidin shares is derived from a fixed remuneration amount.
The members of the Board of Directors receive a fixed remuneration, the amount of which is determined basedon whether the member is Board Chairman, a simple Board member or also a member of one of the Board committees. The remuneration is paid out to members of the Board of Directors partly in the form of locked up sharesin Forbo Holding Ltd.
The members of the Executive Board receive a fixed and a variable remuneration. The fixed remuneration is paid
mainly in cash but may also include shares of Forbo Holding Ltd. The portion paid in shares is derived from afixed remuneration amount. The variable remuneration consists of a short-term remuneration (bonus/short-term
incentive) and a long-term participation (long-term incentive).

79

The bonus/short-term incentive is a short-term, performance-related remuneration, at least 50% of which must
be taken in the form of locked up shares of Forbo Holding Ltd (see the description of the management investment plan [MIP] on pages 83 and 84 of this Remuneration Report). The portion paid in shares is derived from afixed remuneration amount. The bonus is derived from the achievement of individual (qualitative) targets by each
Executive Board member and of financial (quantitative) targets by the company. Depending on the function andresponsibilities of the Executive Board member in question, these financial targets may be derived from Group
and/or divisional objectives. It may not exceed 200% of the fixed remuneration of the individual Executive Board
member.
The long-term incentive is a long-term participation plan consisting of a performance share unit plan. At the startof the performance period, each member of the Executive Board is granted a given number of future subscription rights in the form of performance share units (PSUs). One PSU corresponds to a future subscription right toone share. The size of the PSU allocation corresponds to a defined percentage of the fixed remuneration. The
PSUs are subject to a three-year vesting period. They are converted into vested shares only on condition that theGroup’s performance objectives are achieved. At the end of the performance period, the company will determine whether the objectives set by the Board of Directors at the start of the performance period for the performance indicators have been reached. Depending on the degree to which the objectives have been reached, agiven percentage of the PSUs will be converted into shares, which are subject to a three-year vesting period.
The relevant statutory provisions governing the principles of performance-related remuneration, the distributionof shares, and the additional sum for remuneration of new members of the Executive Board who are appointed
after the Ordinary General Meeting are set out in Chapter IV, pages 9 and 10 of the Articles of Association of Forbo
Holding Ltd. These can be found at:www.forbo.com � Investors � Ordinary General Meeting

Determining the remuneration of the Board of Directors
In order to determine the remuneration of the Board of Directors, the compensation paid to Board members ofForbo Holding Ltd is compared periodically with that paid to Board members of comparable industrial companies
based on information that is available from publicly accessible sources and from respected market data providers
or is known to Board members from their experience of office in similar companies. Industrial companies are­regarded as comparable if they are globally active and domiciled in Switzerland, report sales of between CHF 0.5
and 2.5 billion, have a market capitalization of CHF 1 to 4 billion and employ 2,000 to 10,000 people or if they areglobally active, publicly listed corporations operating in the same business areas as Forbo. The remuneration for
the Executive Chairman of the Board of Directors takes into account that the remuneration is predominantly inblocked shares with a vesting period for three years to ensure a long-term orientation for the company. As a general rule, no external consultants are co-opted for determining the remuneration.
The relevant statutory provisions governing the principles of performance-driven remuneration and the distribution of shares are set out in Chapter IV, pages 9 and 10 of the Articles of Association of Forbo Holding Ltd.
These can be found at:www.forbo.com � Investors � Ordinary General Meeting

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FORBO ANNUAL REPORT 2021 – REMUNERATION REPORT

Elements of remuneration for the Board of Directors
Non-executive members of the Board of Directors
The non-executive members of the Board of Directors receive a fixed remuneration, the amount of which is­determined based on whether the member is Board Chairman, a simple Board member, or also a member of the
Audit and Finance Committee (AFC), the Remuneration Committee (RC) or the Human Resources and Nomination Committee (HRNC). Of the remuneration, 40% is paid to the Board of Directors in shares of Forbo Holding
Ltd. The portion paid in shares is derived from a fixed remuneration amount. These shares have a lockup periodof three years. The number of shares issued is determined on the basis of the average price in the ten stock market days after distribution of a dividend or repayment of par value. If no dividend is distributed or no par value
repayment made, the average price during the first ten stock market days starting on June 1 of the relevantbusiness year applies. The settlement or payment of the shares usually takes place in November.
For the purpose of reporting the remuneration, the shares issued are valued at fair value on the date of allocation.
The total compensation for the non-executive members of the Board of Directors also includes a lump sum for
expenses plus employer contributions to the usual social insurances.
The non-executive Board members do not participate in the management investment plan (MIP).
Executive Chairman of the Board of Directors
The compensation for the Executive Chairman of the Board of Directors is disclosed separately and included u­ ndertotal remuneration to the Board of Directors.
The remuneration is mainly paid in locked up shares, which have a lockup period of three years. The annual cash
payment for the year under review of CHF 470,000 (previous year: CHF 290,000) is used to a predominant part for
employee contributions to the pension fund and social security (AHV and IV) and for other levies. The underlying
share price used to calculate the number of shares is the weighted average price of the first ten days on which
Forbo Holding Ltd shares were traded on the stock market in 2021, less the reduced value as a result of locking
up the shares (tax value 2021: CHF 1,285.62 per share; previous year: CHF 1,399.14 per share). The share package
corresponds to annual compensation at fair value (excluding the reduction for the lockup period) of CHF 2,263,103(1,478 shares); previous year: CHF 2,262,967 (1,358 shares).
With this share package and this cash remuneration, all compensations such as short-term and long-term variable remuneration elements are settled. This share package may not be either pledged or assigned and can besold in three years at the earliest. This compensation model is thus also geared to long-term and sustainable­corporate development and is fully consistent with the interests of the company and its shareholders.
The total compensation for the Executive Chairman of the Board of Directors came to CHF 3,182,103 for the year
under review (previous year: CHF 2,990,758). Contained in this amount and reported in the column ‘Other payments’ are employer contributions to the pension fund, other usual social insurances, private use of the company
car, contributions for accident and health insurance, and location expenses. The Executive Chairman of the Boardof Directors is not a party to the management investment plan (MIP) or the share-based compensation programof the Board of Directors.
Remuneration paid
For the remuneration paid to the Board of Directors in the year under review and the details concerning valuationof the shares, the reader is referred to pages 86 to 88 of this remuneration report.

81

Determining the remuneration of the Executive Board
Basic principles
In order to determine the remuneration of the Executive Board, criteria such as function, responsibility and experience are taken into account and the remuneration paid to Forbo Executive Board members is compared withthat paid to Executive Board members in comparable industrial companies. This is based on information that isavailable from publicly accessible sources and from respected market data providers or is known to the membersof the Remuneration Committee from their experience of office in similar companies. Industrial companies are
regarded as comparable if they are globally active and domiciled in Switzerland, report sales of between CHF 0.5
and 2.5 billion, have a market capitalization of CHF 1 to 4 billion and employ 2,000 to 10,000 people or if they areglobally active, publicly listed corporations operating in the same business areas as Forbo. As a general rule, no
external consultants are co-opted for determining the remuneration.
Alignment of performance-based remuneration with the corporate strategy
The remuneration strategy of Forbo is geared to its current corporate strategy and linked to the relevant key­ratios. This is reflected in the choice of performance criteria that are derived from Group and/or divisional objectives depending on the function of the individual Executive Board member; these include net sales, organic
growth, EBIT, net working capital, return on net assets, and growth in earnings per share. The criteria for determining the remuneration paid to Executive Board members are thus transparent.
The Board of Directors is closely involved in the company’s planning cycle. As a rule, the current corporate strat­
egy is subjected to an in-depth review by the Board in the first half of the year. Once it has been confirmed orrevised, the strategy is quantified in the three-year medium-term plan, which is approved at mid-year by the
Board of Directors. Based on the medium-term plan, the Board of Directors sets the budget objectives for the
coming business year. These budget objectives are the basis for the detailed budget, which is examined andadopted by the Board of Directors in the fourth quarter.
The Board of Directors assesses the current business year by means of an initial estimate at the end of May anda second estimate in mid-October. On completion of the business year, the extent to which the budget has beenreached is checked and deviations are analyzed. The actual amount of the variable remuneration paid out to the
Executive Board is determined on the basis of the achievement of these individual targets. The Board of Directors
defines the relation between budget target achievement and payment ratio.
The short-term, variable remuneration (bonus/short-term incentive) for the previous year is paid out on completion of the business year and after approval by the shareholders. In the case of the long-term participation (longterm incentive), the performance share units are allocated after approval by the Ordinary General Meeting; any
entitlement arising therefrom is determined in March on completion of the three-year performance period andconverted into vested shares.
The contributing factors/performance criteria determining the amount of the payout/share allocation of thevariable remuneration components are linked directly to the company’s success.
The chart below provides a detailed breakdown of the timeline and the interdependence of the corporate targets
and the remuneration.

82

FORBO ANNUAL REPORT 2021 – REMUNERATION REPORT

Planning cycle
1st quarter
Ordinary General Meeting
Corporate strategy
Reviewing/amending strategy
Establishing mid-term plan
Establishing budget
Working out remuneration
Defining maximum total remunerationof Board of Directors
Defining maximum total remunerationof Executive Board
Approving total remuneration of Board of Directors andof fixed remuneration of Executive Board for following
business year by the Ordinary General Meeting
Setting targets for Executive Board
Assessing target achievement and proposal forvariable remuneration elements of Executive Board
Approving short-term, variable remuneration of
Executive Board for previous business year
(bonus/short-term incentive)
Approving maximum total amount of long-term
participation of Executive Board for current business year
(long-term incentive)
Decision period

2nd quarter3rd quarter

4th quarter

83

Elements of remuneration of the Executive Board
Remuneration of the members of the Executive Board consists of a fixed base salary and two variable compensation components, the bonus/short-term incentive and the long-term incentive.
Fixed remuneration
The fixed base remuneration paid to the Executive Board in the reporting year consists of the gross base salary,
private company car use, and social security payments made by the company. The Remuneration Committee may
also decide that part of the remuneration will be paid in the form of shares in Forbo Holding Ltd (lockup periodof five years).
Short-term variable remuneration (bonus/short-term incentive)
The bonus/short-term incentive is derived from qualitative (individual) and quantitative (financial) targets, which
are defined in accordance with the operational responsibility of the Executive Board member in question. The
Board of Directors defines and weights the individual and financial targets.
The qualitative targets are geared to the company’s long-term sustainable development and may account for 10%of the bonus/short-term incentive. The remaining 90% depend on the achievement of the financial (quantitative)
targets. The main targets for members of the Executive Board are: net sales of the Group and/or a division (40%
to 50% of the variable remuneration), EBIT of the Group and/or a division (35% to 50% of the variable remuneration), and net working capital of the Group and/or a division (7% of the variable remuneration).
Whereas achievement of the financial (quantitative) objectives (90%) can be objectively measured, assessing­whether some qualitative objectives (10%) have been met may in certain cases involve discretionary decisions.
The qualitative objectives contain a proportion of sustainability elements.
The defined objectives of the short-term variable remuneration are equivalent to 100% target achievement. The
maximum target achievement is 150%. If a given threshold for a particular target is not reached, no bonus for thattarget is paid. Depending on the function, the variable remuneration may be as much as 140% of the fixed remuneration if targets are fully met. If the targets are exceeded, the variable remuneration may be as much as 200%of the fixed remuneration.
The amount of the short-term variable remuneration, which is based on achievement of the individual and Grouptargets, is set in March after completion of the business year and is submitted to shareholders for approval at theOrdinary General Meeting.
Conversion of remuneration into shares in the management investment plan (MIP)
The bonus payment from the bonus/short-term incentive is linked to the management investment plan (MIP),
which was introduced in 2006 and amended in 2012. According to this plan, at least 50% of the annual short-term
variable remuneration of Executive Board members must be paid into the MIP. The portion paid in shares is de­
rived from a fixed remuneration amount.
As for the remaining 50% of the annual short-term variable remuneration, the Executive Board members may­either draw all or part of it in cash or pay it into the MIP. The Executive Board members may redefine the allocationof this remaining 50% every year. The portion paid in shares is derived from a fixed remuneration amount.

84

FORBO ANNUAL REPORT 2021 – REMUNERATION REPORT

Following the amendment of the MIP, all the sums paid into it will be invested solely in shares of Forbo Holding
Ltd as of January 1, 2013. As a first step, the amount invested in the MIP will be increased by 25%, partly in orderto take account of the three-year lockup period. In addition, this amount will be multiplied by a factor that tracks
the share price movement. This factor is calculated as follows:((SPA – SPP)/SPP) + 1, where ‘SPA’ stands for the share price applicable for the allocation of shares in the year of
allocation and ‘SPP’ for the applicable share price in the previous year. The upper limit for this factor is 1.1 and thelower limit is 0.95.
The relevant share price for the allocation of shares is calculated based on the unweighted average of the closing
prices of the Forbo share in the first 14 trading days in January of the allocation year. The shares are locked up fora period of three years. They cannot be sold or pledged during this time.

portion in cash
maximum 50%

in cashBonus

portion MIP investment
minimum 50% –maximum 100%

× 1.25× factor 0.95 – 1.1
depending on shareprice development

in shares
three-year lockup

Foreign members of the Executive Board may acquire stock awards instead of shares. The stock in question willbe transferred after three years.
Long-term participation plan (long-term incentive)
The previous variable model for remuneration of the Executive Board, consisting of a short-term performance-­
related remuneration (bonus/short-term incentive) was supplemented by a long-term participation plan (longterm incentive), effective from January 1, 2017. The amendment was approved by the Ordinary General Meetingof April 6, 2017.
The aim of the long-term incentive is to link part of the remuneration of the Executive Board even more closelywith the company’s long-term success.
The long-term incentive consists of a performance share unit plan. At the start of the performance period, eachmember of the Executive Board is granted a given number of future subscription rights in the form of per­formance share units (PSUs). One PSU corresponds to a future subscription right to one share. The size of the
PSU allocation corresponds to a defined percentage of the Executive Board member’s fixed remuneration; thepercentage may vary from 15% to 50%. The PSUs are subject to a three-year vesting period. They are converted
into vested shares only on condition that the Group’s performance objectives are achieved. At the end of theperformance period, the company will determine whether the objectives set by the Board of Directors at thestart of the ­performance period for the performance indicators have been reached. Depending on the degree
to which the ­objectives are reached, a given percentage of the PSUs will be converted into shares after the threeyear vesting period. Converted shares are locked up for a period of three years. They cannot be sold or pledged
during this time. Immediately on termination of the plan participant’s employment contract, regardless of

85­ hether the plan participant has terminated the contract or the company has terminated the contract with thewplan participant, all PSUs are forfeited.
The relevant share price for the allocation of PSUs at the start of the performance period is calculated basedon the unweighted average of the closing prices of the Forbo share in the first 14 trading days in January of the­relevant year.
The performance indicators of the long-term incentive are geared to the long-term and sustainable development of the company and consist of three evenly weighted objectives. These are organic growth, the return on
net assets (RONA), and growth in earnings per share (EPS) adjusted for the share buybacks. The target achievement is in each case clearly measurable. There are no discretionary elements for the decisions.
The long-term incentive objectives are based on a target achievement of 100%. It is not possible to exceed the
maximum target achievement level of 100%. If a member fails to reach a given threshold for an objective, no
PSUs are converted into shares for this indicator.
Foreign members of the Executive Board may draw stock awards rather than shares when the PSUs are converted.
The relevant shares are transferred after three years.
The degree to which objectives have been achieved is determined in March after conclusion of the three-year
performance period.
Actual bonus payments
Readers are referred to pages 86 to 88 of this remuneration report for the amount of the actual short-term variable remuneration (bonus/short-term incentive) paid to the Executive Board in the year under review and for details
on the valuation and allocation of shares. The number of future subscription rights in the form of performance
share units for the Executive Board as part of the long-term incentive can also be found on these pages.
There are no option plans.

Employment contracts of the Executive Board members
The employment contracts of the Executive Board members are concluded for an indefinite duration with a­maximum period of notice of twelve months.
The Board of Directors can order that lockup periods stipulated in the employment contracts of Executive Board
members in connection with the MIP or the long-term incentive may be revoked wholly or in part upon the­occurrence of defined events (e.g. change of control, termination of employment, retirement or death).
Should changes in control of the company occur, no additional remuneration or benefits will be paid out.
No severance payments have been agreed with Executive Board members.

86

FORBO ANNUAL REPORT 2021 – REMUNERATION REPORT

Disclosure of remuneration for the Boardof Directors and the Executive Board
Remuneration of the Board of Directors
The total remuneration paid to the non-executive members of the Board of Directors came to CHF 810,178 in theyear under review (previous year: CHF 809,919). This sum consists of the base salary in cash (60% of the remu­
neration), amounting to CHF 413,615 (previous year: CHF 413,862) and the base remuneration in shares (40% of
the remuneration) of CHF 335,136 (previous year: CHF 334,842). This corresponds to 186 shares (previous year: 266
shares) at a market value of CHF 1,801.80 each (previous year: CHF 1,258.80). The portion paid in shares is derived
from a fixed remuneration amount. This total remuneration includes a lump sum for expenses plus employer contributions to the usual social insurances, which are reported separately in the column ‘Other remuneration’.
The remuneration paid to the Executive Chairman of the Board of Directors is explained in detail on page 80 of
this remuneration report.
Remuneration of the Executive Board
The total remuneration paid to the members of the Executive Board came to CHF 3,752,600 in the year underreview (previous year: CHF 2,407,100), subject to approval of the variable portion by the 2022 Ordinary General
Meeting. This sum includes a fixed base salary of CHF 1,642,803 (previous year: CHF 1,520,434) and short-term
variable bonus remuneration (short-term incentive) of CHF 1,292,254 (previous year: CHF 140,380), a long-term
participation (long-term incentive) of CHF 343,921 (previous year: CHF 356,345) plus the private use of the company car, and employer contributions to the pension fund as well as other usual social insurances, which arereported separately in the column ‘Other remuneration’.
The fixed portion of the base salary paid in shares (lockup period of five years) came to CHF 143,699 (previous
year: CHF 278,961). The portion paid in shares is derived from a fixed remuneration amount. The portion of thevariable remuneration (short-term incentive) paid in shares in connection with the MIP (lockup period of three
years) came to CHF 761,206 (previous year: CHF 111,384), which is subject to approval by the 2022 Ordinary­General Meeting. The portion paid in shares is derived from a fixed remuneration amount.
For the three actual long-term incentive plans, a total of 627 future subscription rights in the form of performance share units were issued.

Plan2019 – 2021
2020 – 2022
2021 – 2023

Allocationof subscription rights
April 2019
April 2020
April 2021

Performance
period2019 – 2021
2020 – 2022
2021 – 2023

Vesting
date (PSUs)
April 2022
April 2023
April 2024

Unlockingof shares
April 2025
April 2026
April 2027

Numberof PSUs
allocated
189
216
222

Value PSUs
in CHF(allocation)
267,354356,345
343,921

87

Disclosure of remuneration of the Board of Directors and Executive Board
Remuneration
For the year 20211)

Variable
remunerations

Base salary

CashSharesCash
CHF

Bonus/short-term incentive2)

Long-term incentive3)

Shares

Allocation Performance
Share Units

Name and function

CHF

Number

CHF

CHF

CHF

470,000

1,478

2,263,103

449,000

3,182,103

Michael Pieper,
Vice Chairman

80,53836

64,865

12,349157,752

Dr. Peter Altorfer,
Vice Chairman and Lead
Independent Director

103,89747

84,685

15,175

203,757

Claudia Coninx-Kaczynski,
member

71,59032

57,658

13,796

143,044

Dr. Reto Müller, member
Vincent Studer, member
Board of Directors total6)
Executive Board7)8)9) total
Of whom highest-paid
member of Executive Board(Jean-Michel Wins)

71,59086,000883,615
1,499,104
320,000

32
39
1,664
87
26

57,65870,2702,598,239
143,699
45,562

11,2908,817
510,427473,622130,294

140,538
165,087
3,992,281
3 752,600
1,076,363

409
234

CHF

761,206
435,507

Number

222
94

CHF

Total

This E. Schneider,
Chairman5)531,0480

NumberOther
remuneration4)

343,921145,000

1) The remuneration of the Board of Directors and the Executive Board is reported gross before deduction of employee social insurance contributions. The amounts shown in the table are based on the valuation models used and disclosed in the consolidated financial statements.
2) The variable short-term remuneration of the Executive Board (bonus/short-term incentive) corresponds to the actual degree to which targets
were reached in 2021 and will be submitted to the April 2022 Ordinary General Meeting for approval. The criterion for determining the number of shares issued for the variable remuneration is the unweighted average of the closing prices of the Forbo share in the first 14 trading
days in January of the allocation year in connection with the MIP. The allocation takes place in April (subject to approval by the Ordinary­General Meeting) for the period from January to December of the previous year. The value at allocation was CHF 1,861.14. The shares arelocked up for a period of three years.
3) The long-term incentive for the Executive Board corresponds to the long-term participation plan for 2021 (long-term incentive plan 2021–2023) and to the number of future subscription rights allocated to the plan in the form of performance share units (PSUs). One PSU corre­
sponds to a future subscription right to one share and is subject to a three-year vesting period.
4) ‘Other remuneration’ includes in particular employer contributions to the usual social insurances, private use of the company car, and lumpsum or on-site expenses.
5) Please refer to page 80 of this remuneration report for details on the structure of the remuneration of the Executive Chairman of the Board of
Directors. These details also contain the criterion for determining the number of shares issued and their lockup periods.
6) The criterion for determining the number of shares issued for the non-executive members of the Board of Directors is the average share pricein the ten trading days after payment of the dividend or repayment of the par value: CHF 1,801.80. The allocation is made at the discounted
tax value of 1,512.82 CHF. The shares are locked up for a period of three years and are reported at market value in the table above.
7) Contains remuneration elements for the CEO and CFO (9 and 2 months respectively), who left during the 2021 business year, as well as
remuneration elements for the new CEO (4 months).
8) The criterion for determining the number of shares issued for the base salary is the unweighted average of the closing price of the Forbo sharein the first 14 trading days in January of the allocation year. The shares are allocated in April for the period from May of the previous year to
April of the year of allocation. The shares are locked up for a period of five years. The value of the shares allocated was CHF 1,547.00 for 2021
and for 2022 CHF 1,861.14.
9) The criterion for determining the number of shares issued for the variable remuneration is the unweighted average of the closing price of the
Forbo share in the first 14 trading days in January of the allocation year. The shares for the bonus for the business year 2021 will be allocatedin April 2022, subject to approval by the 2022 Ordinary General Meeting. The shares are locked up for a period of three years. The value atallocation was CHF 1,861.14. Foreign members of the Executive Board may acquire stock awards instead of shares. The stock in question willbe transferred after three years.

88

FORBO ANNUAL REPORT 2021 – REMUNERATION REPORT

Remuneration
For the year 20201)

Variable
remunerations

Base salary

CashName and function

SharesCash
CHF

Bonus/short-term incentive2)

Long-term incentive3)

Shares

Allocation performance
share units

CHF

Number

CHF

CHF

CHF

290,000

1,358

2,262,967

437,7912,990,758

Michael Pieper,
Vice Chairman

80,041

52

65,45812,319157,818

Dr. Peter Altorfer,
Vice Chairman

104,187

67

84,34015,135

203,662

Claudia Coninx-Kaczynski,
member

71,382

46

57,905

13,766

143,053

Dr. Reto Müller, member
Vincent Studer, member
Board of Directors total6)
Executive Board7)8)9) total
Of whom highest-paid
member of Executive Board(Stephan Bauer)

71,382
86,870703,862
1,241,472
400,000

46
55
1,624
175
127

57,905
69,234
2,597,809
278,961
201,537

11,264
8,731
499,006
389,941
176,781

140,551
164,835
3,800,677
2,407,099
951,027

72
47

CHF

111,384
72,709Number

216
60

CHF

Total

This E. Schneider,
Executive Chairman5)

28,9960

NumberOther
remuneration4)

356,345
100,000

1) The remuneration of the Board of Directors and the Executive Board is reported gross before deduction of employee social insurance contributions. The amounts shown in the table are based on the valuation models used and disclosed in the consolidated financial statements.
2) The variable short-term remuneration of the Executive Board (bonus/short-term incentive) corresponds to the actual degree to which targets
were reached in 2020 and will be submitted to the April 2021 Ordinary General Meeting for approval. The criterion for determining the number of shares issued for the variable remuneration is the unweighted average of the closing prices of the Forbo share in the first 14 trading
days in January of the allocation year in connection with the MIP. The allocation takes place in April (subject to approval by the Ordinary General Meeting) for the period from January to December of the previous year. The value at allocation was CHF 1,547.00. The shares are locked
up for a period of three years.
3) The long-term incentive for the Executive Board corresponds to the long-term participation plan for 2020 (long-term incentive plan 2020 –2022) and to the number of future subscription rights allocated to the plan in the form of performance share units (PSUs). One PSU corresponds to a future subscription right to one share and is subject to a three-year vesting period.
4) ‘Other remuneration’ includes in particular employer contributions to the usual social insurances, private use of the company car, and lumpsum or on-site expenses.
5) Please refer to page 80 of this remuneration report for details on the structure of the remuneration of the Executive Chairman of the Board of
Directors. These details also contain the criterion for determining the number of shares issued and their lockup periods.
6) The criterion for determining the number of shares issued for the non-executive members of the Board of Directors is the average share pricein the ten trading days after payment of the dividend or repayment of the par value: CHF 1,258.80. The allocation is made at the discounted
tax value of CHF 1,056.91. The shares are locked up for a period of three years and are reported at market value in the table above.
7) Remuneration of the entire Executive Board including the highest-paid Executive Board member.
8) The criterion for determining the number of shares issued for the base salary is the unweighted average of the closing price of the Forbo sharein the first 14 trading days in January of the allocation year. The shares are allocated in April for the period from May of the previous year to
April of the year of allocation. The shares are locked up for a period of five years. The value of the shares allocated was CHF 1,673.71 for 2020and for 2021 CHF 1,547.00.
9) The criterion for determining the number of shares issued for the variable remuneration is the unweighted average of the closing price of the
Forbo share in the first 14 trading days in January of the allocation year. The shares for the bonus for the business year 2020 will be allocatedin April 2021, subject to approval by the 2021 Ordinary General Meeting. The shares are locked up for a period of three years. The value atallocation was CHF 1,547.00. Foreign members of the Executive Board may acquire stock awards instead of shares. The stock in question willbe transferred after three years.

89

Advances and loans
As of December 31, 2021, no advances or loans to members of the Board of Directors or the Executive Board
were outstanding.
The relevant statutory provisions concerning advances, loans and employee benefits for members of the Boardof Directors and the Executive Board are set out in Chapter IV, pages 9 and 10 of the Articles of Association ofForbo Holding Ltd, which can be downloaded at:www.forbo.com � Investors � Ordinary General Meeting

Disclosure of shareholdings pursuant to Article 663c CO
2021 business year
As at December 31, 2021, the individual members of the Board of Directors and the Executive Board (including
related parties) held the following number of shares in Forbo Holding Ltd:
Shareholdings 2021
Name and function

Amountof shares

This E. Schneider, Executive Chairman
Michael Pieper, Vice Chairman and independent1) member
Dr. Peter Altorfer, Vice Chairman, independent1) member and Lead Independent Director
Claudia Coninx-Kaczynski, independent1) member
Dr. Reto Müller, independent1) member
Vincent Studer, independent1) member
Total Board of Directors
Michael Schumacher, Chief Executive Officer
Marc Deimling, Executive Vice President Movement Systems
Andreas Jaeger, Chief Financial Officer
Jean-Michel Wins, Executive Vice President Flooring Systems
Total Executive Board

35,677
412,637
1,453
389
746
1,058
451,960
0
80
3
254
337

1) Independent as defined in the ‘Swiss code of best practice forcorporate governance’90

FORBO ANNUAL REPORT 2021 – REMUNERATION REPORTAs at December 31, 2020, the individual members of the Board of Directors and the Executive Board (including
related parties) held the following number of shares in Forbo Holding Ltd:
Shareholdings 2020
Name and function

Amountof shares

This E. Schneider, Executive Chairman
Michael Pieper, Vice Chairman and indipendent1) member
Dr. Peter Altorfer, Vice Chairman, indipendent1) member and Lead Independent Director
Claudia Coninx-Kaczynski, independent1) member
Dr. Reto Müller, independent1) member
Vincent Studer, independent1) member
Total Board of Directors
Stephan Bauer, Chief Executive Officer
Marc Deimling, Executive Vice President Movement Systems
Urs Uehlinger, Chief Financial Officer
Jean-Michel Wins, Executive Vice President Flooring Systems
Total Executive Board

42,352486,856
1,406
357
714
1,019
532,704
2,345
54
253
275
2,927

1) Independent as defined in the ‘Swiss code of best practice forcorporate governance’

91

Report of the statutory auditor

Report of the Statutory
AuditorTo the General Meeting of Forbo Holding Ltd, Baar

We have audited the accompanying remuneration report of Forbo Holding Ltd for the year ended 31 December
2021. The audit was limited to the information according to articles 14 – 16 of the Ordinance against Excessivecompensation in Stock Exchange Listed Companies (Ordinance) on pages 87 to 90 of the remuneration report.
Responsibility of the Board of Directors
The Board of Directors is responsible for the preparation and overall fair presentation of the remuneration reportin accordance with Swiss law and the Ordinance against Excessive compensation in Stock Exchange Listed
Companies (Ordinance). The Board of Directors is also responsible for designing the remuneration system anddefining individual remuneration packages.
Auditor's Responsibility
Our responsibility is to express an opinion on the accompanying remuneration report. We conducted our audit inaccordance with Swiss Auditing Standards. Those standards require that we comply with ethical requirements
and plan and perform the audit to obtain reasonable assurance about whether the remuneration report complies
with Swiss law and articles 14 – 16 of the Ordinance.
An audit involves performing procedures to obtain audit evidence on the disclosures made in the remuneration
report with regard to compensation, loans and credits in accordance with articles 14 – 16 of the Ordinance. The
procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatements in the remuneration report, whether due to fraud or error. This audit also includes evaluating the reasonableness of the methods applied to value components of remuneration, as well as assessing the overall presentation of the remuneration report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
OpinionIn our opinion, the remuneration report for the year ended 31 December 2021 of Forbo Holding Ltd complies with
Swiss law and articles 14 – 16 of the Ordinance.

KPMG AG{{Signatureleft}}Rolf Haueinstein
Licensed Audit Expert
Auditor in Charge

Zurich, 2 March 2022{{Signatureright}}
Regula Tobler
Licensed Audit Expert

92

FINANCIAL REPORT
Forbo Group financial report
93
Consolidated balance sheet
94
Consolidated income statement
95
Consolidated comprehensive income statement
96
Consolidated statement of changes in equity
97
Consolidated cash flow statement
98
Notes – accounting principles
99
Notes109
Group companies
136
Report of the statutory auditor
140
Consolidated balance sheets 2017 – 2021
146
Consolidated income statements 2017 – 2021
147
Financial statements for Forbo Holding LtdBalance sheet
Income statementNotes to the financial statements
Proposal for appropriation of available earnings
Report of the statutory auditor

149
150
151
152
157
158

94

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheet

AssetsCHF mCurrent assets
Cash and cash equivalents
Current financial assets
Trade receivables
Other receivables
Accrued income and deferred expenses
Inventories
Non-current assets
Non-current financial assets
Deferred tax assets
Property, plant, and equipment
Intangible assets and goodwill
Total assets
Shareholders’ equity and liabilities
CHF mCurrent liabilities
Current financial liabilities
Trade payables
Other current liabilities
Current tax liabilities
Accrued expenses and deferred income
Current provisions
Non-current liabilities
Non-current financial liabilities
Deferred tax liabilities
Non-current provisions
Employee benefit obligations
Total liabilities
Shareholders’ equity
Share capital
Treasury shares
Reserves and retained earnings
Total shareholders’ equity and liabilities

The accompanying notes are an integral part of the consolidated financial statements.

31.12.2021

31.12.2020

553.6
93.3
0.0
153.4
32.2
11.8
262.9
428.0
0.2
37.4
294.8
95.6
981.6

668.7
255.8
0.1
141.4
39.7
13.2
218.5
442.1
0.2
45.4
295.7
100.8
1,110.8

314.5
50.8
112.2
30.0
20.4
81.6
19.5
145.3
31.6
9.8
35.5
68.4
459.8
521.8
0.2
– 0.1
521.7
981.6

251.5
14.1
94.4
30.4
16.6
76.2
19.8
175.8
31.1
8.9
46.5
89.3
427.3
683.5
0.2
– 0.1
683.4
1,110.8

Note

22
22
12

13
22
10
14/21
15

Note

22
22

16
17
22
10
17
18

20
20

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

95

Consolidated income statement

1.1. – 31.12.
CHF m
Net sales
Cost of goods sold
Gross profit
Development costs
Marketing and distribution costs
Administrative costs
Other operating expenses
Other operating income
Operating profit
Financial income
Financial expenses
Group profit before taxes
Income taxes
Group profit for the year
Group profit attributable to shareholders of Forbo Holding Ltd
Earnings per share, total
CHF
Basic earnings per share
Diluted earnings per share

The accompanying notes are an integral part of the consolidated financial statements.

2021

2020

1,254.0– 803.0
451.0– 15.9– 175.3– 92.8
– 7.2
19.2
179.0
3.0
– 0.8
181.2
– 40.0141.2
141.2

1,117.7– 707.5
410.2– 15.2– 171.3– 86.4– 15.2
14.9
137.0
0.7
– 1.6
136.1
– 29.9
106.2
106.2

91.63
91.62

66.60
66.60

Note

5

6

7
8

10

Note

11
11

96

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Consolidated comprehensive
income statement
1.1. – 31.12.
CHF m
Group profit for the year
Items that will not be reclassified to the income statement:
Remeasurements of employee benefit obligations, net of taxes
Items that are or may be subsequently reclassified to the income statement:
Translation differences
Other comprehensive income for the year, net of tax
Total comprehensive income
Total comprehensive income attributable to the shareholdersof Forbo Holding Ltd

The accompanying notes are an integral part of the consolidated financial statements.

2021

2020

141.2

106.2

16.8

– 7.8

– 11.6
5.2
146.4
146.4

– 23.3– 31.1
75.1
75.1

Note

10

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

97

Consolidated statementof changes in equity
2021

CHF m
January 1, 2021
Group profit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income
Share-based payments
Treasury shares
Dividend payment
December 31, 2021

SharecapitalTreasuryshares0.2– 0.1

Reserves

0.2

– 0.1

1,032.8
141.2
16.8
158.0
4.4
– 281.1– 31.4882.7

Share
capitalTreasurysharesReserves

0.2

– 0.1

0.0

Translationdifferences– 349.4– 11.6– 11.6– 361.0

Translationdifferences

Total

683.5
141.2
5.2
146.4
4.4
– 281.1– 31.4
521.8

2020

CHF m
January 1, 2020
Group profit for the year
Other comprehensive income for the year, net of tax
Total comprehensive income
Share-based payments
Treasury shares
Dividend payment
December 31, 2020

0.0
0.2

The accompanying notes are an integral part of the consolidated financial statements.

– 0.1

1,002.6
106.2
– 7.8
98.4
3.0
– 34.4– 36.81,032.8– 326.1– 23.3– 23.3– 349.4

Total

676.6
106.2
– 31.175.1
3.0– 34.4– 36.8683.5

98FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Consolidated cash flow statement

1.1. – 31.12.
Cash flow from operating activities
CHF mGroup profit for the year
Tax expense
Financial result
Depreciation of property, plant, and equipment and right-of-use assets
Amortization of intangible assets
Share-based payments
Income tax paid
Decrease (–)/Increase in provisions and employee benefit obligations
Increase (–)/Decrease in trade receivables
Increase (–)/Decrease in inventories
Increase/Decrease(–) in trade payables
Decrease/Increase (–) in other net working capital
Net cash flow from operating activities
Cash flow from investing activities
CHF m
Purchase of non-current assets
Proceeds from the disposal of non-current assets
Interest received
Net cash flow from investing activities
Cash flow from financing activities
CHF m
Payment of lease liabilities
Increase current financial liabilities
Interest paid
Purchase of treasury shares
Dividend payment
Net cash flow from financing activities
Change in cash and cash equivalents
CHF m
Decrease(–)/Increase in cash and cash equivalents
Translation differences on cash and cash equivalents
Total cash and cash equivalents at beginning of year
Total cash and cash equivalents at year-end

The accompanying notes are an integral part of the consolidated financial statements.

2021

2020

141.2
40.0
– 2.2
51.9
4.8
4.4
– 36.4– 9.2– 16.1– 47.9
20.2
15.8
166.5

106.2
29.9
0.9
50.4
4.6
3.0
– 37.4
1.0
12.8
8.0
– 1.5
– 6.5
171.4

– 38.80.0
0.4– 38.4– 39.70.1
0.7– 38.9– 17.736.2– 0.8– 276.5– 31.4– 290.2– 17.5– 0.9– 34.4– 36.8– 89.6– 162.1
– 0.4
255.8
93.3

42.9
– 4.8
217.7
255.8

Note

10
14
15
9

Note

Note

21
22
21

Note

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

99

Notes –
accounting principles
1 General information
Forbo Holding Ltd and its subsidiaries (together constituting the ‘Group’) manufacture floorings, construction
adhesives, and drive and conveyor technology. The
Group has a global network of locations with production and distribution as well as pure sales companies.
Forbo Holding Ltd is a public limited company under
Swiss law, domiciled in Baar, Switzerland. It is listed on
the SIX Swiss Exchange (FORN).
These financial statements were approved by the
Board of Directors on March 2, 2022, and released for
publication on March 3, 2022. This financial report issubject to approval by the Ordinary General Meetingof April 1, 2022.

2 Accounting principles
The principal accounting policies applied in the preparation of these consolidated financial statements are
set out below. These policies have been consistently
applied to all the years presented, unless otherwise
stated.
Basis of preparation
The consolidated financial statements of Forbo Holding Ltd were prepared in accordance with the International Financial Reporting Standards (IFRS) and in compliance with Swiss law.
The consolidated financial statements are preparedin Swiss francs. The Swiss franc is both the functional
currency and the reporting currency of the company.
Unless otherwise noted, all sums are stated in millionsof Swiss francs (CHF m) and are generally rounded to
one decimal place.
The consolidation was done on the basis of the audited
financial statements of the subsidiaries prepared according to uniform corporate accounting policies. The
reporting date for all Group companies is December 31.

The consolidated financial statements were preparedin accordance with the principle of historical costs, withthe exception of derivatives measured at fair value andpension fund liabilities measured at the net value ofthe discounted defined benefit obligations less the fairvalue of the plan assets.
The preparation of the consolidated financial statements requires management to make discretionary
judgments, estimates and assumptions that can affectthe application of accounting methods and reported
revenues, expenses, assets, liabilities, and contingent
assets and liabilities at the date of the financial statements. Actual results may differ from these estimatesand assumptions. Estimates and the underlying assumptions are being reviewed continually. Revised versions of estimates and assumptions are recognized prospectively. Information about discretionary judgments
as well as assumptions and uncertainty involved in estimates are contained in note 3 ‘Critical judgments,­estimates and appraisals by management’.
Scope and principles of consolidation
Subsidiaries are companies that are controlled by theGroup. The Group exercises control over a company if
it is exposed to variable returns from its involvement in
the company or possesses rights to the returns and isable to influence these returns by means of its discretionary control over the company. The financial statements of subsidiaries are included in the consolidated
financial statements from the point at which control
begins.
The purchase method of accounting is used to account for business combinations. The value of thetransferred consideration in a business combinationand the acquired identifiable net assets are recognizedat the fair value on the acquisition date. The consideration includes cash payments and the fair value of theassets transferred, liabilities incurred or acquired, andequity instruments issued by the acquirer on the transaction date. Liabilities dependent on future events,
which are based on agreements on contingent considerations, are accounted for at their fair value in theaccounting treatment of the acquisition. Acquisition
costs are reported as expenditure in the income statement. Non-controlling interests are measured at theacquisition date with their proportionate share in theidentifiable net assets of the acquired entity.

100 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Goodwill is the excess of the consideration of the business combination and the amount of the non-controlling interest over the identifiable net assets assessed at fair value.
Inter-company transactions, balances, and unrealized
gains or losses on transactions between Group companies are eliminated.
Associates are all entities over which the Group has­significant influence but not control, generally accompanied by a shareholding of 20% to 50% of the voting
rights. Investments in associates are accounted for­using the equity method of accounting and are ini­
tially recognized at cost.
The Group’s share of its associates’ post-acquisition
profits or losses is recognized in the income statement,
and its share of post-acquisition changes in reserves isrecognized in reserves. The cumulative post-acquisition movements are offset against the carrying amountof the investment. When the Group’s share of losses inan associate equals or exceeds its interest in the associate, the Group does not recognize further losses, unless it has incurred obligations or made payments onbehalf of the associate.
Changes in the scope of consolidation
In the reporting period, there were no changes in thescope of consolidation. In the previous year, the sales
company TOB ’Forbo Flooring Ukraine’ was founded in
Kiev, Ukraine, within the Flooring Systems segment. In
the Corporate segment, Forbo Finanz AG was mergedwith Forbo Financial Services AG (renamed Forbo
Management SA) in order to streamline the corporate
structure. Forbo Finanz AG was subsequently deregistered as a result of the merger. Effective as of January
1, 2021, Forbo Management SA took over the activitiesof the Corporate segment of Forbo International SA,
which then moved its domicile from Baar to Wallbach
and was renamed Forbo Siegling Schweiz AG.
The subsidiaries included in the group of consolidated
companies are listed under ‘Group companies’ (frompage 136 of this report).

Foreign currency translation
Transactions in foreign currencies
The individual companies prepare their financial statements in their functional currency. The functional currency is the currency of the primary economic environment in which the company operates and generally
corresponds to the local currency. Foreign currencytransactions are translated into the functional currency
using the exchange rates prevailing at the dates oftransaction. Foreign exchange gains and losses resulting from the settlement of such transactions and fromthe translation at year-end exchange rates of monetary
assets and liabilities denominated in foreign currencies
are recognized in the income statement.
Foreign operations
The annual statements of foreign Group companies
stated in foreign currencies are translated into Swiss
francs as follows: assets and liabilities at year-end exchange rates; the income statement and cash flow
statement at average exchange rates for the year. Currency translation differences arising from the different
translation of balance sheets and income statements
and from equity capital transactions are recognized inother comprehensive income and taken to profit orloss for the period (reclassified) in the event the foreign
Group company is disposed of.
On consolidation, exchange differences arising fromthe translation of net investments in independent foreign operations are recognized in other comprehensive income. When a foreign operation is disposed of,these exchange differences are transferred to the income statement as part of the gain or loss on sale.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 101

The following exchange rates against the Swiss franc
have been applied for the most important currencies
concerned:
Income statement (averageexchange rates for the year)

Exchange rates
Euro zone
USA
Great Britain
Japan
China
Sweden

EUR
USD
GBP
JPY
CNY
SEK

1
1
1
100
100
100

Balance sheet(year-end exchange rates)

2021

2020

2021

2020

1.08110.9141
1.25730.832414.1684
10.65431.0706
0.93681.20270.878513.5918
10.2186

1.03430.91401.23370.794214.3418
10.10411.08400.88221.20110.8552
13.5234
10.7469

Net sales and revenue recognition
Revenue from contracts with customers is recognizedwhen the control of the goods or services is transferredto the customer. The revenue is based on the con­tractually agreed transaction price, i.e. the amount towhich the Group can be expected to be entitled in return for the transfer of the goods or services to a customer.

Type of productor service
Flooring Systems

Movement Systems

Type and time of the fulfillment of performance obligation, significant terms of payment
The revenue is generated predominantly by the sale of goods that are recognized at a point in time, in accordance with theagreed terms. The sale of goods is based on fixed prices. In some cases, goal-oriented, variable volume discounts are
granted. Volume rebates are deducted from sales in the same amount as expected cash outflows. The payment terms arein line with general business terms and conditions, with payment due dates ranging from 30 to 60 days.
The warranty periods granted for goods are in line with the general business terms and conditions in the sector; in somecases, these may be longer than defined by law. Provisions are made on the basis of the expected cash outflow for known
warranty claims and those expected in future.
The type and time of the fulfillment of the performance obligation and the terms of payment are identical with those for
Flooring Systems.
Movement Systems, in addition, provides services in connection with the servicing, maintenance, and seamless connectionof belting products. These services are recognized separately as revenue at the time the service is provided.

102 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Government grants
Government grants are recognized only when there
is reasonable assurance that the related conditions
are met, and the grants will be received. Grants are­deducted when arriving at the carrying amount of
the asset concerned and they are recognized in the income statement over the period of the depreciable asset by means of a reduced depreciation charge.
Government grants that compensate the company for
expenses incurred are recognized in the income statement accounts in the period in which the expenses tobe compensated accrue.
Research and development
All research costs are posted directly to the income
statement in the period in which they are incurred. Development costs are capitalized only if these costs canbe reliably measured, the product or process is tech­nically feasible and commercially viable, a future economic benefit is likely, and the Group has sufficient­resources and intends to complete the development
and exploit the asset. Other development expenses
that do not meet these criteria are taken to the income
statement as they are incurred. Capitalized development costs are measured at the cost of acquisition or
production less cumulative amortizations and impairments.
Share-based payments
Equity-settled share-based payments to employees
are valued at the fair value of the equity instrumenton the date on which the instruments are granted. The
fair value determined on granting equity-settled sharebased payments is recognized in the income statement over the vesting period and is included in personnel expenses.

Earnings per share
The number of shares used for calculating earnings per
share is determined on the basis of the weighted average number of the shares issued less the weighted average number of treasury shares held. To calculate diluted earnings per share, an adjusted number of sharesis determined from the total number of shares used to
calculate earnings per share plus the potentially dilutive effects of shares from employee incentive plans. To
take account of the dilutive effect of employee incentive plans, the number of shares is determined that
could have been purchased at the market price on thebasis of the cumulative difference between the market
price and the strike price of the future subscription
rights. The market price used for this purpose corresponds to the average price of the shares in the business year under review. The earnings or diluted earnings per share is the quotient obtained by dividing
the distributable net profit by the relevant number ofshares.
Income taxes
Income taxes constitute the total of current and deferred income taxes.
Current income taxes are determined on the basis oftaxable profits and the applicable tax laws of the individual countries. They are recognized as an expense in
the accounting period in which the profits are made.
Deferred tax liabilities are recognized for temporary differences between assets and liabilities in the balance
sheet, and their tax bases if they will result in taxable
income in future. Deferred tax assets are reported
for temporary differences that will result in deductible
amounts in future periods and for tax effects from unused tax losses and tax credits, but only to the extent
as it is probable that sufficient taxable profits will beavailable against which these differences can be offset.
Deferred tax liabilities are not recognized if temporary
differences arise from the initial recognition of goodwill.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 103

Deferred tax assets and tax liabilities are measured at
the tax rates that are expected to be enacted in the
period in which the asset will be realized or the liability
will be settled. Current and deferred tax assets and­liabilities are offset when they arise from the same tax
reporting group, relate to the same tax authority, thelegal right to offset exists, and they are intended to besettled net or realized simultaneously.
Current and deferred income taxes are recognized as
an income tax benefit or expense in the income statement, with the exception of items posted directly toequity or recognized in other comprehensive income.
In this case, the corresponding tax effect is also to berecognized directly in shareholders’ equity or in othercomprehensive income.
Property, plant, and equipment
Land is recognized at cost on acquisition. Land is notdepreciated, but allowances are set aside for impairments that have occurred. All other fixed assets suchas buildings, machines and equipment, vehicles andother operational assets are reported at cost on acquisition less accrued depreciation and impairments.
Betterments that increase the useful lives of the assets,
significantly improve the quality of the output or enable a substantial reduction in operating costs are capi­
talized and depreciated over the remaining useful lives.
Depreciation is calculated according to the straight-line
method over the following estimated useful life:
Land and buildings
Land 
no depreciation
Buildings
20 to 40 years
Modifications and installations
5 to 10 years orduration of rental contract
Machinery and equipment
Machines, equipment and tools
5 to 10 years
Vehicles and other property, plant, and equipment
Vehicles
5 yearsIT
3 to 5 years
Other operational assets
3 to 10 years
Assets under construction
Assets under construction
no depreciation

If there are signs of an impairment, the recoverable
amount of the asset is determined. If the carrying
amount exceeds the recoverable value, the carrying
amount of the asset is reduced accordingly and thedifference charged to the income statement.
Intangible assets and goodwill
The goodwill generated in connection with businesscombinations is measured at the cost of acquisition
less cumulative impairment losses.
Goodwill is not amortized but tested for impairment
at least annually.
The acquisition costs of trademarks, licenses, customer
relationships, and technologies acquired in a businesscombination correspond to the fair value at the dateof acquisition.
Trademarks with an indefinite useful life are not subject to amortization but are tested for impairment atleast annually. Any impairment is recognized as an expense in the income statement.
Other intangible assets that are acquired by the Groupand have a finite useful life are carried at acquisition or
production costs less cumulative amortization and impairments. The amortization of other intangible assets
with a finite useful life uses the straight-line method;
the following estimated useful lives are applied:
Software 
Customer relations Technologies 

3 to 5 years
5 to 15 years
up to 30 years

Amortization methods, useful lives, and residual values
are reviewed annually at the reporting date and adjusted where necessary.

104 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Financial instruments
Recognition and initial measurement
Trade receivables are recognized when they occur. Allother financial instruments are recognized when theGroup becomes a contracting party. Financial assets(with the exception of trade receivables with no essential financing component) and financial liabilities are
initially recognized at fair value. Transaction costs,
which are directly attributable to acquisition or issuance, are added in addition for financial instrumentsthat are not measured at fair value through profit orloss. Trade receivables with no essential financing components are initially recognized at the transaction price.
Classification and subsequent measurementof financial assets
Financial assets are measured and classified in accordance with the following categories:– ‘Amortized cost’– ‘Fair value through other comprehensive income’– ‘Fair value through profit or loss‘A financial asset is measured at amortized cost if thebusiness model provides for the asset to be held in order to receive cash flows on contractually agreed
dates. The payments consist only of the nominal value
plus interest. Essentially, the financial assets in theGroup consist of cash and cash equivalents and tradereceivables that are reported at amortized cost using
the effective interest method less valuation allowancesfor expected credit losses. Cash and cash equivalents
are stated at nominal value. It includes cash on hand,bank accounts, and fixed-term deposits with maturities
up to three months from the date of acquisition.
Derivatives are valued at their fair value. The derivatives
used are accounted for on the day the trade is conducted. Derivative financial instruments are classified
in the balance sheet in ‘Current financial assets’ or in‘Current financial liabilities’.

The Group recognizes allowances for expected credit
losses on financial instruments that are reported atamortized costs. The Group applies a permissible, simplified model of valuation allowances (‘provision matrix’) for trade receivables. In this valuation allowance
table, expected losses on receivables are determinedon the balance sheet date on the basis of past experience of default probability, and of future-oriented expectations based on experience with the customers
and market conditions.
The Group considers a financial asset to be in default
if it is unlikely that the borrower can pay his obligation
to the Group in full without the Group having to takerecourse to measures such as the realization of collateral.
Classification and subsequent measurementof financial liabilities
Financial liabilities are classified and measured atamortized costs or at fair value through profit or loss.
The majority of financial liabilities in the Group are liabilities from leasing contracts. These are measured
at amortized costs using the effective interest method.
A financial liability is recognized in the income statement at fair value if it is a derivative.
Inventories
Inventories are measured at the lower of cost or net
realizable value. Cost includes direct material and, if
appli­cable, other direct costs and related production
overheads to the extent that they are incurred in bringing the inventories to their present location and condition. The net realizable value constitutes the estimatedsales price less all estimated costs up to completion, as
well as the costs of marketing, sales, and distribution.
Inventories are generally measured at average cost. Inter-company profits on intra-Group deliveries are eliminated in the income statement.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 105

Shareholders’ equity
Registered shares are classified as share capital at theirpar value. Payments by shareholders above the par value are credited to reserves.
Treasury shares are deducted at their par value fromshare capital. The acquisition costs in excess of par value arising on the acquisition of treasury shares are debited to reserves. On the sale of treasury shares, gains
or losses compared with the par value are credited ordebited to reserves.
Dividends are debited to equity in the period in which
the resolution on their distribution is adopted.
Employee pension plans
The Group maintains various pension plans designed
as defined contribution and defined benefit plans.
These pension plans are established in accordancewith the local conditions in each country. The plans are
funded either by contributions to legally autonomous
pension funds and insurance plans or by recognition of
the pension plan liabilities in the financial statementsof the respective companies.
For defined contribution plans, the costs incurred in
the relevant period correspond to the agreed employer contributions.
For defined benefit plans, the pension costs and lia­
bilities are assessed annually on the basis of various
economic and demographic assumptions by independent actuaries according to the ‘projected unit credit
method’. The liabilities correspond to the present valueof the expected future cash outflows. The plan assets
are stated at market value and deducted from the pension liabilities. Pension costs, consisting of current service costs incurred in the relevant period and net interest expense, less employee contributions, are stated as
personnel expenses in the income statement. Past service costs or gains resulting from changes in pension
plans are recognized directly in the income statement.
Profits or losses resulting from pension plan curtailments or settlements are immediately taken as well tothe income statement.

Remeasurements include actuarial gains and losses
due to changes in the present value of the pension obligations arising from changes in assumptions and experience adjustments plus the return on plan assets
less the contributions contained in net interest expense. Remeasurements are recognized in other comprehensive income, taking deferred taxes into account,
and are never subsequently reclassified to the income
statement.
Provisions
Provisions are recognized if the Group has a current
legal or constructive obligation as a result of a past
event, it is probable that an outflow of resources will
be required to settle the obligation, and a reliable estimate of the amount can be made. The provision isthe best estimate on the reporting date of the amountrequired to meet the current obligation, taking into
account the risks and uncertainties underlying the obligation.
Leasing
The Group is the lessee for various property, plant, andequipment; vehicles and buildings constitute the vast
majority of leasing agreements.
The Group recognizes a right-of-use asset that represents its right to control the use of the underlying
asset, plus a liability from the lease that represents its
obligation to make lease payments. The lease liability
is recognized initially at the net present value of thelease payments and subsequently at the book value
using the effective interest method. It is restated if the
future lease payments change as a result of changes ininterest rates or a reassessment of purchase, renewal
or termination options. The lease payments are discounted at the implicit interest rate of the leasing arrangement or, if this is not available, at the incremental
borrowing rate. Determination of the incremental borrowing rate is based on interest rates of different financial sources and is adjusted to take into account thelease conditions and the type of asset.

106 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

The right-of-use is measured according to the initialrecognition of the lease liability and is amortized overthe lease term on a straight-line basis. The lease term
for leasing contracts that contain extension options
reasonably certain to be exercised or no explicitly stated end date is at the discretion of the company withincertain limits.
Exceptions are made for short-term leases and for leases for low-value assets used by the company. These
lease payments are recognized as expenditure over thelease term.
The Group recognizes right-of-use assets under ‘Property, plant, and equipment’ and leasing liabilities under‘Financial liabilities’ in the balance sheet. Further information is disclosed in note 21 ‘Leasing’.

3 Critical judgments, estimates andappraisals by management
The application of the measurement and accounting
principles requires that circumstances and estimates
be assessed, and assumptions be made with respect
to the carrying amounts of assets and liabilities. The
estimates and the underlying assumptions are basedon past experience and other factors regarded as relevant, including expectations of future events that appear reasonable in the given circumstances. The actual results may, of course, deviate from the estimatesand assumptions of management.
Estimates and the underlying assumptions are reviewed continuously. Revised estimates are recognized prospectively. The following are the main areasin which a significant risk exists in the coming businessyear involving a significant adjustment of the carrying
value of assets and liabilities.

Impairment tests
Along with the regular periodic review of goodwill andintangible assets with an indefinite useful life, the carrying amounts of fixed and intangible assets with a­finite useful life are also always reviewed if due tochanged circumstances or other triggering events
these amounts can possibly no longer be realized. Ifsuch a situation occurs, the recoverable amount is­determined based on expected future revenues. This
corresponds to either the discounted expected cash
flows or the expected net sales price.
Important assumptions in the calculations underlying
these impairment tests include growth rates, margins,
estimates and management’s expectations of the future development of net working capital, and discountrates. The actual cash flows may deviate from theplanned and discounted values. Likewise, the useful
lives may be shortened, or non-current assets impairedin the event of a change in the use of buildings, machinery and facilities, change or abandonment of locations, or lower-than-expected revenues over the medium term. Further information on this topic can befound in note 14 ‘Property, plant, and equipment’ andnote 15 ‘Intangible assets and goodwill’.
Valuation of pension plan liabilities
Various employee pension plans exist for employees of
the Group. In the valuation of defined benefit plans,
actuarial assumptions are made to estimate future developments. These include assumptions and estimates
relating to the discount rate, the inflation rate as well asassumptions for future wage trends. In their actuarial
calculations for determining employee benefit obligations, the actuaries also use statistical information suchas mortality tables and staff turnover rates. If these parameters change owing to a change in the economic
situation or market conditions, the subsequent results
may deviate considerably from the actuarial reports
and calculations. These deviations may have a significant medium-term effect on expenses and income
from the employee pension schemes and on the comprehensive income statement. Further information on
this topic can be found in note 18 ‘Employee benefit
obligations’.
Recognition and measurement of provisions
In the conduct of ordinary business activities, a liabilityof uncertain timing and/or amount may arise. Provisions are determined using available information basedon reasonably expected cash outflows. Claims against
Group companies may arise that may not be covered,or are covered only in part, by provisions or insurance
benefits. Further information on this topic can be foundin note 17 ‘Provisions’.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 107

Income taxes
The Group is obliged to pay income taxes in various
countries. Certain key assumptions are necessary in order to determine income tax in the relevant countries.
There are business events which have an impact on
taxation and taxable profit. Hence, the amount of the
final taxation cannot be determined definitively. The
measurement of current tax liabilities is subject to theinterpretation of tax regulations in the relevant countries. The adequacy of this interpretation is assessed by
the tax authorities in the course of the final assessment
or tax audits. This may result in material changes to tax
expenses. Where the definitive taxation of these business events deviates from the previous assumptions,this will have an impact on the current and deferredtaxes in the period in which the taxation is definitively
determined. Furthermore, determining whether tax
losses carried forward can be capitalized requires a critical estimate of the probability that they can be offset
against future profits. This assessment is based on planning information. Further information on this topic canbe found in note 10 ‘Income taxes’.

4 Application of new or revised
accounting standards
Applied new and revised standards
and interpretations
The following relevant revised standards and interpretations of the International Accounting Standards
Board (IASB) were applied for the first time in the business year that began on January 1, 2021:– Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and
IFRS 16 ‘Interest rate benchmark reform - Phase 2’– Amendments to IFRS 16 ‘COVID-19-related rent­concessions’ (since April 1, 2021)
The first-time adoption of the above-mentioned revised standards and interpretations had no appreciable
impact on the consolidated financial statements presented here.

108 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Introduction of new standards
in 2022 and beyond
There are no new standards that are relevant for theGroup. The following revised standards and interpretations that were published by end 2021 but are not yet
mandatory were not applied in advance in the present
consolidated financial statements.

Standards
Revisions and amendments of standards and interpretations
Annual Improvements to IFRS Standards 2018 – 2020
Amendments to IAS 16 ‘Property, Plant and Equipment: Proceeds before Intended Use’Amendments to IFRS 3 ‘Reference to the Conceptual Framework’
Amendments to IAS 37 ‘Onerous Contracts – Cost of Fulfilling a Contract’
Amendments to IAS 1 ‘Classification of Liabilities as Current or Non-current’
Amendments to IAS 1 and IFRS Practice Statement 2 ‘Disclosure of Accounting Policies’
Amendments to IAS 8 ‘Definition of Accounting Estimates’
Amendments to IAS 12 ‘Deferred Tax related to Assets and Liabilities arising from a Single
Transaction’*No significant impact on the consolidated financial statements is expected.

*
*
*
*
*
*
*
*

Date effective

Plannedapplication

January 1, 2022
January 1, 2022
January 1, 2022
January 1, 2022
January 1, 2023
January 1, 2023
January 1, 2023
January 1, 2023

2022 business year
2022 business year
2022 business year
2022 business year
2023 business year
2023 business year
2023 business year
2023 business year

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 109

Notes

5 Segment reporting
The Group is a global producer of Flooring Systems andMovement Systems. The divisions correspond to the­internal management structure and are run separately
because the products they manufacture, distribute,and sell differ fundamentally in terms of production,
distribution, and marketing.
In the Flooring Systems division, the Group develops,
produces, and sells linoleum, vinyl floorings, entrance
flooring systems, carpet tiles, needle felt floor coverings, Flotex, the washable textile flooring, and building
and construction adhesives as well as various accessory
products required for laying, processing, cleaning, andcare of flooring. In the Movement Systems division, theGroup develops, produces, and sells high-quality conveyor and processing belts, as well as plastic modular

belts, and drive, timing and flat belts made of synthetic
materials. Corporate includes the costs of the Group
headquarters and certain items of income and expenses that are not directly attributable to a specific segment.
The Flooring Systems and the Movement Systems divisions are reportable segments. The identification of
the reportable segments is based on internal man­agement reporting to the Executive Chairman of theBoard of Directors and to the Chief Executive Officerof the Group and hence on the financial information
used to review the performance of the operational
units in order to reach a decision on the allocation of
resources.

Segment information on the reportable segments forthe reporting year:
2021
CHF m
Sales
Inter-segment sales
Net sales to third parties
Operating profit (EBIT)
EBITDA1)
Operating assets
Capital expenditure2)
Number of employees (December 31)

Flooring
Systems
851.8
0.0
851.8
131.2
166.7
514.3
23.4
3,021

Movement
Systems
402.4
– 0.2
402.2
54.3
74.2
317.6
15.4
2,472

Corporate/
Elimination
– 0.2
0.2

Flooring
Systems
757.0
0.0
757.0
109.9
144.6
487.5
20.5
2,967

Movement
Systems
361.0
– 0.3
360.7
35.9
55.0
303.3
19.1
2,309

Corporate/
Elimination
– 0.3
0.3

– 6.5
– 5.3
18.8
0.0
39

Total
1,254.0
0.0
1,254.0
179.0
235.6
850.7
38.8
5,532

1) Operating profit before depreciation and amortization
2) Purchase of tangible and intangible assets (excluding leasing)

Segment information on the reportable segments forthe prior year:
2020
CHF m
Sales
Inter-segment sales
Net sales to third parties
Operating profit (EBIT)
EBITDA1)
Operating assets
Capital expenditure2)
Number of employees (December 31)
1) Operating profit before depreciation and amortization
2) Purchase of tangible and intangible assets (excluding leasing)

– 8.8
– 7.6
18.5
0.1
41

Total
1,117.7
0.0
1,117.7
137.0
192.0
809.3
39.7
5,317

110 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTSManagement reporting is based on the same accounting principles as external reporting.
The Executive Chairman of the Board of Directors andthe Chief Executive Officer assess the performanceof the reportable segments based on their operating
result (EBIT). The financial result is not allocatedto the segments since it is Corporate Treasury thatmainly exercises central control over it.

Inter-segment sales are transacted at arm’s length. The
segments apply the same accounting principles as theGroup. Sales to third parties, as they are reported to the
Executive Chairman of the Board of Directors and theChief Executive Officer, are identical with the sales reported in the income statement.

Reconciliation of segment information to the income
statement and balance sheet:
2021

2020

179.0
2.2
181.2

137.0
– 0.9
136.1

31.12.2021

31.12.2020

850.7
130.9
981.6

809.3
301.5
1,110.8

CHF m
Total segment result (EBIT)
Financial result
Group profit before taxes

CHF m
Total operating assets
Non-operating assets
Total assets

Operating assets include ‘Trade receivables’, ‘Other­receivables’, ‘Accrued income and deferred expenses’,­‘Inventories’, ‘Property, plant, and equipment’, and ‘Intangible assets and goodwill’. Non-operating assets i­ nclude‘Cash and cash equivalents’, ‘Current financial assets’,‘Non-current financial assets’ and ‘Deferred tax assets’.

The following table shows revenue broken down bygeographic region and by the two product groups thatare identical with the reportable segments.

Flooring Systems

CHF mRegions
EuropeAmericasAsia/Pacific and Africa
Total net sales to third parties

Movement Systems

2021
Third-party
sales

2020
Third-party
sales

2021
Third-party
sales

2020
Third-party
sales

651.6
123.9
76.3
851.8

585.7
107.9
63.4
757.0

162.9
130.4
108.9
402.2

140.0
118.9
101.8
360.7

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 111

Net sales to third parties by destination were generated
in the following regions:

CHF m
Switzerland (domicile)
Germany
FranceBenelux
Scandinavia
Great Britain and Ireland
Other countries Europe
EuropeUSA
Other countries Americas
AmericasAsia/Pacific and Africa
Total net sales to third parties

In the period under review, sales to no single customer
exceeded 10% of total Group sales.

CHF m
Switzerland (domicile)
Germany
FranceBenelux
Scandinavia
Great Britain and Ireland
Other countries Europe
EuropeUSA
Other countries Americas
AmericasAsia/Pacific and Africa
Total operating assets

6 Development costs‘Development costs’, which mainly comprise productdevelopment, amounted to CHF 15.9 million in the reporting year (2020: CHF 15.2 million).

2021
Third-party sales

2020
Third-party sales

27.9
155.9
149.9
129.4
102.7
74.5
174.2
814.5
207.5
46.8
254.3
185.2
1,254.0

26.2
145.9
124.3
122.2
94.6
67.2
145.3
725.7
186.7
40.1
226.8
165.2
1,117.7

Operating assets are distributed over the following regions:31.12.2021
Operating assets

31.12.2020
Operating assets

31.2
102.1
71.2
208.1
42.7
90.2
58.8
604.3
100.5
21.1
121.6
124.8
850.7

31.5
91.9
73.5
199.4
33.8
103.8
61.3
595.2
87.3
11.3
98.6
115.5
809.3

Costs for manufacturing trials, recipe optimization andnew collections are not reported within ‘Development
costs’.
As in the previous year, no development costs were
capitalized.

112 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

7 Other operating expenses

8 Other operating income‘Other operating expenses’ comprise expenses of different kinds in connection with structural measures,
legal costs, warranties, taxes on capital, levies based on
local legislation, and allowances for doubtful trade receivables.

‘Other operating income’ comprises a range of income,as the release of provisions owing to settled obligations related to the sale of industrial adhesives and forlegal proceedings as well as insurance payments, profit from the sale of fixed assets and material for recycling
purposes, rental income, and the release of allowances
for doubtful trade receivables.

9 Personnel expenses

Personnel expenses
CHF mSalaries and wages
Social security contributions
Employee benefit expenses for defined contribution plans
Employee benefit expenses for defined benefit plans
Total personnel expenses

As at December 31, 2021, the headcount was 5,532(2020: 5,317). The weighted average headcount over
the year was 5,508 (2020: 5,491).
Personnel expense increased year-on-year because of
the higher headcount. In addition, in the previous year,
unused holidays and overtime were reduced and compensation from individual programs related to the
COVID-19 pandemic could be collected.

2021

2020

301.7
59.7
13.8
5.8
381.0

279.7
59.7
14.1
5.8
359.3

Salaries and wages include share-based payments­expenses of CHF 4.4 million (2020: CHF 3.0 million). A
bonus program is available for around 150 managers,which is linked to achieving financial targets set for theGroup, the divisions, and individual objectives (see also
note 19 ‘Employee participation plan’).

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 113

10 Income taxes

Income taxes
CHF mCurrent income taxes
Deferred income taxes
Total income taxes

2021

2020

35.8
4.2
40.0

30.5
– 0.6
29.9

2021

2020

181.2
– 43.123.8%

136.1– 33.1
24.3%

– 0.7
0.8
0.4
0.6
2.0
– 40.0
22.1%

– 0.9
2.4

Analysis of tax expense
The following reconciliation explains the difference
between the expected and the effective tax expense:

CHF mGroup profit before taxes
Tax expense at the expected tax rate
Expected tax rate in %Tax effects of:
Non-tax-deductible expenses
Tax-exempt income
Recognition of previously unrecognized tax losses
Utilization of previously unrecognized tax losses
Previous-year taxes and other positions
Effective income tax expenses
Effective income tax rate in %Since the Group operates in various countries with different tax laws and rates, the expected and effective tax
expense depends every year on the origin of the profits
or losses in each country. The expected tax expense is
the sum of the expected individual tax expense of all
subsidiaries. The expected individual tax expense in a

0.2
1.5
– 29.922.0%

country is calculated by multiplying the individual profit/loss by the tax rate applicable in the country concerned.

114 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Capitalized and non-capitalized tax loss carry-forwards, by expiry date:
2021
CHF m
Expiry after:
1 year
2 years
3 years
4 years
5 years
More than 5 years
Total tax loss carry-forwards

Not capitalized

Capitalized

Total

3.1

0.9
0.9

0.9
4.0

20.0
23.1

0.9
41.4
44.1

0.9
61.4
67.2

Not capitalized

Capitalized

Total

2020
CHF m
Expiry after:
1 year
2 years
3 years
4 years
5 years
More than 5 years
Total tax loss carry-forwards

As in the previous year, no tax loss carry-forwards expired in the year under review.
Deferred income tax assets and liabilities are offset
when they relate to the same tax jurisdiction, provided

CHF mDeferred tax assets
Deferred tax liabilities
Deferred taxes, net

0.0
1.8
4.6
3.8
17.9
28.1

0.0
1.8
4.6
3.8
42.2
42.2

60.1
70.3

that the legal right to offset exists, and they are intended either to be settled net or to be realized simultan­
eously.
The following amounts are shown in the balance sheet:

31.12.2021

31.12.2020

37.4
– 9.8
27.6

45.4
– 8.9
36.5

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 115

Deferred tax assets and liabilities, tax credits and tax
charges from deferred taxes:
Deferred tax assets

CHF mJanuary 1, 2020
Changes recognized in income statement
Changes recognized in other comprehensive income
Translation differences
As at December 31, 2020
Changes recognized in income statement
Changes recognized in other comprehensive income
Translation differences
As at December 31, 2021
Netting with deferred tax liabilities
As at December 31, 2021

Inventories
8.9
– 1.0

Property,plant, andequipment
1.0
1.4

Provisions
13.5
– 0.7

Loss carryforwards
12.6
– 0.5

– 0.2
7.7
– 0.5

0.0
2.4
0.0

0.0
12.8
– 4.3

– 0.2
11.9
0.5

0.0
7.2

– 0.2
2.2

0.0
8.5

– 0.1
12.3

Inventories
2.9
0.0
– 0.1
2.8
0.7
– 0.1
3.4

Property,plant, andequipment
4.9
0.7
– 0.1
5.5
1.5
– 0.2
6.8

Provisions
0.1
0.0
0.0
0.1
0.0
0.0
0.1

Intangible
assets
11.1
– 2.1
– 0.2
8.8
– 0.4
0.3
8.7

Employeebenefit obligations
14.8
2.0
– 0.2
16.6
1.3
– 3.8
– 0.6
13.5

Other
5.7
0.0
– 0.1
5.6
0.7
– 0.1
6.2

Total
56.5
– 0.8
2.0
– 0.7
57.0
– 2.3
– 3.8
– 1.0
49.9
– 12.5
37.4

Deferred tax liabilities

CHF mJanuary 1, 2020
Changes recognized in income statement
Translation differences
As at December 31, 2020
Changes recognized in income statement
Translation differences
As at December 31, 2021
Netting with deferred tax assets
As at December 31, 2021
Increase in deferred tax assets 2020
Decrease in deferred tax assets 2021

As at December 31, 2021, no deferred tax liabilities
on undistributed profits from consolidated companies
have been recognized, since this income is deemed
to have been reinvested for an indefinite period.

Employeebenefit obligations
0.0
0.0
0.0

0.0

Other
3.3
0.0
0.0
3.3
0.1
– 0.1
3.3

Total
22.3
– 1.4
– 0.4
20.5
1.9
– 0.1
22.3
– 12.5
9.8
2.3
– 8.9

Should there be a distribution, withholding and othertaxes might be incurred, which upon decision may beprovided for accordingly.

116 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Tax expense and income recognized directly in theother comprehensive income statement:
2021
CHF m
Actuarial gains/losses (–) on employee benefit obligations
Translation differences
Other comprehensive income

11 Earnings per share
Undiluted earnings per share are calculated by dividing the net profit or loss for the year attributable toshareholders of Forbo Holding Ltd by the weighted
average number of registered shares issued and outstanding in the year under review.

2020

Before tax

Tax expense

After tax

Before tax

Tax income

After tax

20.6
– 11.6
9.0

– 3.8

16.8
– 11.6
5.2– 9.8– 23.3– 33.1

2.0– 7.8– 23.3– 31.1– 3.8

2.0

The figure for diluted earnings per share also takes into
account the potential dilution effects if all issued andin-the-money share entitlements (Long-Term Incentive Plan) were to be exercised.
The calculations are based on the following information:

Group profit for the year in CHF million
Weighted average number of shares
Number of shares adjusted for long-term incentive plans (LTI)
Weighted average number of shares used to calculate diluted earnings per share
Basic earnings per share in CHF
Diluted earnings per share in CHF

2021
141.2
1,541,336
122
1,541,458
91.63
91.62

2020
106.2
1,594,494
16
1,594,510
66.60
66.60

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 117

12 Trade receivables

Trade receivables
CHF m
Accounts receivable
Notes receivable
Allowance
Total trade receivables

31.12.2021

31.12.2020

145.4
12.8
– 4.8
153.4

134.7
12.8
– 6.1
141.4

31.12.2021

31.12.2020

63.5
78.1
154.3
– 33.0
262.9

48.7
71.2
131.4
– 32.8
218.5

Information with regards to the Group’s credit and market risks and allowances for doubtful trade receivables
are found in note 23 ‘Risk assessment and financial risk
management’.

13 Inventories

Inventories
CHF m
Raw materials and supplies
Work in progress
Finished goods
Valuation allowance for inventories
Total inventories

Cost of materials recognized in the reporting year
came to CHF 528.7 million (2020: CHF 436.2 million).
The increase is due to higher volumes as well as significantly higher raw material prices.

118 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

14 Property, plant, and equipment

Cost on acquisition
CHF m
As at January 1, 2020
Additions
Disposals
Transfers
Translation differences
As at December 31, 2020
Additions
Disposals
Transfers
Translation differences
As at December 31, 2021

Land andbuildings

Machineryandequipment

Vehicles andotherproperty,plant, andequipment

166.9
27.7
– 7.4
4.8
– 8.0
184.0
14.4
– 4.2
1.5
– 8.1
187.6

728.3
8.0
– 7.7
11.7
– 12.3
728.0
11.0
– 4.0
17.6
– 20.6
732.0

134.4
7.3
– 3.4
1.3
– 2.4
137.2
7.1
– 5.3
1.4
– 4.5
135.9

Land andbuildings

Machineryandequipment

Vehicles andotherproperty,plant, andequipment

38.6
15.3
– 3.6
– 4.5
45.8
16.3
– 4.2
– 6.4
51.5

602.1
25.4
– 7.6
– 9.3
610.6
26.1
– 4.0
– 18.6
614.1

114.0
9.7
– 3.2
– 1.5
119.0
9.5
– 4.9
– 4.0
119.6

0.0

0.0

754.7
50.4
– 14.4– 15.3775.4
51.9– 13.1– 29.0
785.2

128.3
138.2
136.1

126.2
117.4
117.9

20.4
18.2
16.3

16.9
21.9
24.5

291.8
295.7
294.8

Accumulated depreciation and impairments
CHF m
As at January 1, 2020
Depreciation
Disposals
Translation differences
As at December 31, 2020
Depreciation
Disposals
Translation differences
As at December 31, 2021
Net carrying amountAs at January 1, 2020
As at December 31, 2020
As at December 31, 2021

Property, plant, and equipment is recognized at amortized cost. As in the previous year, no impairments occurred in the year under review.

included in the items ‘Cost of goods sold’, ‘Devel­
opment costs’, ‘Marketing and distribution costs’, and­‘Administrative costs’.

Included under property, plant, and equipment areright-of-use assets amounting to CHF 47.3 million(2020: CHF 46.9 million). Further information can befound in note 21 ‘Leasing’.

As at December 31, 2021, there were no assets forwhich interest on borrowed capital was capitalized
during the preparation phase.

Maintenance and repair costs amounted to CHF 25.5
million (2020: CHF 22.7 million). The depreciation expense of CHF 51.9 million (2020: CHF 50.4 million) is

As at December 31, 2021, the Group had outstanding
purchase orders for capital goods amounting to CHF
4.8 million (2020: CHF 2.1 million).

Assetsunderconstruction

16.9
23.0
– 17.8
– 0.2
21.9
23.7

Total
property,plant, andequipment

1,046.5
66.0– 18.5– 22.9
1,071.1
56.2– 13.5– 20.5– 0.6
24.5– 33.81,080.0

Assetsunderconstruction

Total
property,plant, andequipment

0.0

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 119

15 Intangible assets and goodwill

Cost on acquisition
CHF m
As at January 1, 2020
Additions
Transfers
Translation differences
As at December 31, 2020
Additions
Disposals
Transfers
Translation differences
As at December 31, 2021

Accumulated amortization and impairments
CHF m
As at January 1, 2020
Amortization
Disposals
Translation differences
As at December 31, 2020
Amortization
Disposals
Translation differences
As at December 31, 2021
Net carrying amountAs at January 1, 2020
As at December 31, 2020
As at December 31, 2021

Otherintangible assets

Goodwill

Trademarks

84.3

32.8

– 1.2
83.1

– 0.3
32.5

– 1.7
81.4

0.1
32.6

1.2
79.5

Goodwill

Trademarks

Otherintangible assets

Total

8.8

26.3

0.0
8.8

0.0
26.3

– 0.3
8.5

0.0
26.3

55.6
4.6
– 0.1
– 2.4
57.7
4.8
– 0.1
0.7
63.1

90.7
4.6
– 0.1
– 2.4
92.8
4.8
– 0.1
0.4
97.9

75.5
74.3
72.9

6.5
6.2
6.3

25.9
20.3
16.4

107.9
100.8
95.6

31.12.2021
69.2
3.7
72.9

31.12.2020
70.3
4.0
74.3

81.5
0.3
– 0.1
– 3.7
78.0
0.4
– 0.1

Total

198.6
0.3
– 0.1
– 5.2
193.6
0.4
– 0.1
0.0
– 0.4
193.5

The position ‘Trademarks’ consists mainly of the trademarks acquired in connection with the acquisition of
Bonar Floors in 2008. ‘Other intangible assets’ consists
primarily of the customer relations and technologies
acquired as part of the acquisition of Bonar Floors.

Goodwill is distributed among the following groups ofcash-generating units:

Flooring Systems
Movement Systems
Total Goodwill

120 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

The goodwill in Flooring Systems comprises primarily
the goodwill acquired in connection with the acqui­sition of Bonar Floors. The annual impairment test of
goodwill yielded a value in use that was greater thanthe carrying amount.
Intangible assets with an indefinite useful life (goodwill
and trademarks) are subject to an annual impairment
test at cash-generating unit level. The test is carriedout using a standardized method with discounted
cash flow for calculating the value in use. Cash flow for
the first five years is estimated on the basis of the plan
approved by management (detailed planning period).
Cash flows beyond the detailed planning period are
extrapolated to the terminal value by means of using
sustainable earnings. The growth rate underlying theterminal value equals the expected inflation (1%).

During the detailed planning period, relatively constant
EBITDA margins are assumed, which are around 20%(2020: 19%) for Flooring Systems and around 19%(2020: 15%) for Movement Systems.
The discount rate corresponds to the total weighted
cost of capital before taxes including an average risk
charge estimated by management, and is 9.3% (previous year: 8.9%). The intangible assets with an indefinite
useful life were subject to impairment testing also in
the form of sensitivity analyses (WACC).
No change in the basic assumptions that can be regarded as reasonably realistic will result in the carrying
amounts exceeding the recoverable amounts.

16 Accrued expenses anddeferred income
31.12.2021

31.12.2020

43.3
38.3
81.6

37.4
38.8
76.2

Accrued expenses and deferred income
CHF m
Accrued expenses for compensation and employee benefits
Other accrued expenses
Total accrued expenses and deferred income

Accrued expenses for compensation and employee
benefits mainly comprise overtime accruals and com-missions. Other accrued expenses include accrued volume rebates, commissions, premiums, interest andgoods and services received but not yet invoiced.

17 Provisions
Provisions
CHF m
As at January 1, 2021
Additions
Used during the year
Released during the year
Translation differences
As at December 31, 2021
Of which current provisions
Of which non-current provisions

Provisions
for legal
claims

Personnel
provisions

Other
provisions

13.3
5.4
– 2.0
– 0.9
– 0.2
15.6

3.4
0.3

– 4.2
– 0.2
3.7

36.2
0.4
– 0.6
– 6.1
0.0
29.9

– 2.3
– 0.1
1.3

66.3
9.0
– 5.4
– 14.4
– 0.5
55.0

3.7

1.3
28.6

14.1
1.5

0.9
0.4

19.5
35.5

Warranty
provisions

Environmental
provisions

5.3
2.9
– 2.8
– 0.9
0.0
4.5

8.1

3.2
1.3

Total

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 121

Warranty provisions are linked to product sales and are
based on past experience. The provisions for legal
claims relate mainly to product liability claims in which
the Group is involved in the course of its normal business. Warranties related to the sale of industrial adhesives in 2012 were settled in the reporting period. Personnel provisions comprise possible obligations
arising from employment contracts. Most of the antici­
pated cash outflow for the non-current provisions is
expected in the next two to five years.

18 Employee benefit obligations
The Group has established several pension plans on
the basis of the specific requirements of the countries
in which it operates. The Group maintains both, defined contribution and ­defined benefit plans that insure employees against the risks of death and invalidity
and provide old-age pensions.
The liabilities and assets under the main defined bene­
fit plans are assessed annually by independent actuaries using the ‘projected unit credit method’.
Pension plans in the United Kingdom
The Group has two defined benefit pension plans in
the United Kingdom. The main one is the Forbo Superannuation Fund (FSF), which accounts for about 60%of the Group’s total pension liabilities. The FSF isa pension plan whose benefits are based on the final
salary and which pays out a guaranteed pension forlife to its members. The FSF is closed to new entrants.
The composition of the pension liabilities is as follows:
2% to active employees, 33% to deferred members
and 65% to current beneficiaries. New employees in
the United Kingdom who meet certain criteria are
now offered a defined contribution plan.
The FSF operates under trust law and is managed andadministered by the trustees on behalf of the members in accordance with the terms of the Trust Deed
and Rules and relevant legislation. The FSF’s assets areheld by the trust. Responsibility for governance of the
FSF – including investment decisions and contribution schedules – lies with the trustees. The board oftrustees must be composed of representatives of thecompany and plan participants in accordance with
the FSF’s regulations and British pension law.

The pension plan follows an investment strategy that isgeared to the structure of the pension liabilities (‘liability-driven investment’ approach).
The use of any ultimate surplus is not subject to any
restrictions under the FSF’s articles of incorporation andcan be used freely by the Group. These surpluses are
therefore recognized in the balance sheet as assets inaccordance with IAS 19 revised.
Pension plan in Switzerland
The Group pays contributions to an independent pension fund as part of the occupational pension provision(known in Switzerland as the ‘second pillar’). As a minimum benefit, this independent pension fund must
provide the beneficiary with an old-age pension at thetime of retirement. This pension is paid out of the retirement savings capital at the start of the pension. The
Group meets these liabilities through agreements withpension funds that cover the pension liabilities in full.
The pension liabilities of the Swiss Group companies
account for about 19% of the Group’s entire pension
liabilities. 95% of the liabilities are to employees and 5%
to beneficiaries.
The Swiss pension system includes guarantees that expose the company to the risk that it may have to provide additional financing, for instance, if the pension
fund is unable to meet its obligations or decides to end
the insurance relationship. The pension fund guarantees a minimum return and is responsible for the payment of a pension for life once the insurance benefits
fall due. As a result of these guarantees, Swiss pension
plans are treated as defined benefit plans under IFRS,
even though they contain essential elements of defined contribution plans.

122 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

The company cannot participate in any surplus of
the pension plan. According to Swiss pension law(BVG), all surpluses belong to the pension plan andhence to its members.
Other pension plans
Other notable defined benefit plans exist in France,
Germany, Japan, Sweden, and the USA.

actuaries using the projected unit credit method. The
fair value of the plan assets was determined as at December 31, 2021, based on the information available
when the annual financial statements were prepared.
The weighted average duration of the pension plans(‘plan duration’) is 13.3 years for the United Kingdom,17.7 years for Switzerland, and 15.4 years for the othercountries.

The latest actuarial valuations of the present valuesof defined benefit liabilities and of service costs were
performed as at December 31, 2021, by independent

The principal assumptions underlying the actuarial calculations are summarized as follows.

2021

2020

Actuarial assumptions
Switzerland

UK

Other

Weighted

Switzerland

UK

Other

Weighted

0.3
1.9
1.3

1.8
4.1
3.4

1.3
2.8
1.8

1.4
2.3
2.8

0.1
1.8
1.3

1.2
3.6
2.9

1.0
2.7
1.9

1.0
2.4
2.5

22
23

21
24

21
24

21
24

23
25

21
23

20
24

21
23

23
25

22
25

22
25

22
25

24
26

22
24

22
25

22
25

Discount rate (in %)Future increases in salaries (in %)Inflation rate (in %)Life expectancy at age of 65 (in years)
Year of birth 1956
Men
Women
Year of birth 1971
Men
Women

The pension costs for defined benefit plans recognized in the consolidated income statement can besummarized as follows:
2021

2020

Pension costs
CHF mService cost
Interest costs
Interest income on plan assets
Total actuarial net periodic
pension costs

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

2.3
0.1
0.0
2.4

0.3
2.9
– 2.7
0.5

2.5
0.5
– 0.1
2.9

5.1
3.5
– 2.8
5.8

2.1
0.2
– 0.1
2.2

0.4
3.8
– 3.7
0.5

2.6
0.7
– 0.2
3.1

5.1
4.7
– 4.0
5.8

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 123

Changes in pension liabilities under the defined benefit plans:
2021

2020

Benefit obligations
CHF m
As at January 1
Service cost
Employee contributions
Interest costs
Benefits paid
Actuarial gains (–)/losses
Curtailments and settlements
Translation differences
As at December 31

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

69.0
2.3
1.0
0.1
– 2.8
– 7.0

231.0
0.3

62.0
2.5
0.0
0.5
– 1.8
– 3.8
– 0.1
– 2.8
56.5

362.0
5.1
1.0
3.5
– 14.8– 23.8
– 0.1
3.8
336.7

63.4
2.1
0.9
0.2
– 1.0
3.4

228.9
0.4
3.8
– 9.1
19.8

61.3
2.6
0.0
0.7
– 2.6
0.5

353.6
5.1
0.9
4.7
– 12.723.7– 12.8
231.0

– 0.5
62.0

– 13.3
362.0

62.6

2.9
– 10.2– 13.0
6.6
217.6

69.0

.

Changes in plan assets of the defined benefit plans atfair value:

2021

2020

Plan assets
CHF m
As at January 1
Interest income on plan assets
Employer contributions
Employee contributions
Return on pension assets (excluding amounts in interest income)
Benefits paid
Curtailments and settlements
Translation differences
As at December 31

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

45.4
0.0
1.7
1.0
1.5

222.0
2.7
0.3

5.3
0.1
1.6
0.0
0.5

272.7
2.8
3.6
1.0
– 3.2

44.7
0.1
1.6
0.9
– 0.9

224.9
3.7
0.2
14.9

5.4
0.2
2.6
0.0
– 0.1

275.0
4.0
4.4
0.9
13.9

– 2.8

– 10.2

– 9.1

– 2.6

– 12.76.3
215.9– 14.8
– 0.1
6.3
268.3

– 1.0

46.8

– 1.8
– 0.1
0.0
5.6

45.4

– 12.6
222.0

– 0.2
5.3

– 12.8
272.7

– 5.2

Actuarial gains and losses are recognized in the balance sheet under ‘Pension liabilities’ and accounted for
directly in the other comprehensive income.

Most of the pension plans are financed in full or in partvia outsourced funds. Pension liabilities amounting to
CHF 35.9 million (2020: CHF 38.8 million) out of a totalof CHF 336.7 million (2020: CHF 362.0 million) are unfunded.

124 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Changes in the net liabilities of defined benefit plans
recognized in the balance sheet:

2021

2020

Net liabilities
CHF m
As at January 1
Net pension cost
Employer contributions
Actuarial gains (–)/losses
Translation differences
Net liabilities as at December 31

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

23.6
2.4
– 1.7
– 8.5

9.0
0.5
– 0.3
– 7.8
0.3
1.7

56.7
2.9
– 1.6
– 4.3
– 2.8
50.9

89.3
5.8
– 3.6
– 20.6
– 2.5
68.4

18.7
2.2
– 1.6
4.3

4.0
0.5
– 0.2
4.9
– 0.2
9.0

55.9
3.1
– 2.6
0.6
– 0.3
56.7

78.6
5.8
– 4.4
9.8
– 0.5
89.3

15.8

23.6

Gains and losses of defined benefit pension plans offset in the comprehensive income statement for all segments:

2021

2020

Recognized gains and losses in
the comprehensive income
statement
CHF mActuarial gains/losses (–) in thecurrent period:

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

7.0

13.0

3.8

23.8

– 3.4

– 19.8– 0.5– 23.7

Based on adjustment of demographic assumptions

4.9

– 1.1

0.1

3.9

0.0

– 0.6

0.0

– 0.6

Based on adjustment of financial
assumptions

2.3

9.4

3.4

15.1

– 2.6

– 19.3– 1.8– 23.7

Experience adjustment
Return on pension assets (excluding amounts in interest income)

– 0.2
1.5

4.7
– 5.2

0.3
0.5

4.8
– 3.2

– 0.8
– 0.9

0.1
14.9

1.3
– 0.1

0.6
13.9

Total gains/losses (–) recognizedin the comprehensive income
statement before taxes

8.5

7.8

4.3

20.6

– 4.3

– 4.9

– 0.6

– 9.8

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 125

Change in the present value of defined benefit liabilities:

Sensitivities +50bp
CHF m
Discount rate
Increases in salaries
Inflation rate
Interest credits on retirement assets

2021

2020

+50bp

+50bp

Switzerland

UK

Other

Switzerland

UK

Other

– 5.3
1.6
1.2
1.4

– 13.7
0.1
4.6

– 4.0
2.3
3.8

– 6.3
1.9
1.4
1.6

– 14.9
0.1
9.0

– 4.8
2.7
4.5

Sensitivities –50bp

–50bp

CHF m
Discount rate
Increases in salaries
Inflation rate
Interest credits on retirement assets–50bp

Switzerland

UK

Other

Switzerland

UK

Other

6.0
– 1.6
– 1.2
– 1.4

15.3
– 0.1
– 8.0

4.6
– 2.1
– 3.4

7.2
– 1.8
– 1.4
– 1.5

16.6
– 0.1
– 8.3

5.4
– 2.5
– 4.1

The above table describes the effect of the principal
actuarial assumptions on pension liabilities. The tableshows the effect of an isolated change of a single parameter, assuming that all other parameters remainunchanged. However, sensitivities may differ for individual plans. The sensitivity analysis aims to visualize
the uncertainty in valuating pension liabilities undermarket conditions at the date of valuation. The resultscannot be extrapolated owing to possible non-linear
effects in the event of changes to the actuarial assumptions. Moreover, the analysis cannot say anything
about the likelihood of these changes occurring, nor
can it present the view of the Group regarding anticipated future changes in pension liabilities. Any measures taken by management to reduce the risks arealso not taken into account in the analysis.

126 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Weighted average asset allocation of the defined benefit plan assets as at December 31:%
Shares
Bonds
Real Estate
Other securities
Cash and cash equivalents
Total plan assets as at December 31‘Shares’, ‘Bonds’, ‘Real Estate’ and ‘Other securities’ werequoted investments. The plan assets did not include
any direct shares or other securities of the Forbo Group.
Future contributions to defined benefit plans in thefollowing year are estimated on the basis of the period
under review.
Other non-current benefits
The Group does not finance any other non-current
benefits. The plans for long-service bonuses and otherbenefits related to years of service are negligible or do
not qualify as plans for other non-current benefits.

19 Employee participation plan
As of December 31, 2021, there existed the following
share-based remuneration elements:
Remuneration of the Board of Directors
The remuneration of the Executive Chairman of theBoard of Directors is mainly in locked-up shares. The
details and figures for this remuneration model are
to be found on page 135 of this Financial Report andon pages 80 and 87 of the Remuneration Report. The
number of shares with a three-year vesting period allocated to the non-executive members of the Board of
Directors came to 186 in the reporting year (2020: 266)
Remuneration of the Executive Board
Long-term incentive plan
The long-term Incentive consists of a performance
share unit plan. At the start of the performance period,
each member of the Executive Board is granted a given
number of future subscription rights in the form of­performance share units (PSUs). One PSU corresponds
to a future subscription right to one share. The PSUs are
subject to a three-year vesting period. At the end of
the performance period, the company will determine
whether the objectives set by the Board of Directors
at the start of the performance period for the performance indicators have been reached. Depending on

2021

2020

10.3
46.5
12.8
25.7
4.7
100.0

5.6
44.5
3.9
42.6
3.4
100.0

the degree to which the objectives are reached, a given
percentage of the PSUs will be converted into shares
after the three-year vesting period. Converted sharesare locked up for a period of three years. The relevant
share price for the allocation of PSUs at the start of theperformance period is calculated from the unweighted
average of the closing prices of the Forbo share in thefirst 14 trading days in January of the year in which the
PSUs were allocated.
Within the framework of the Long-Term Incentive Plan
74 shares (2020: 81) were allocated in the year underreview. The share price at measurement date was CHF
1,547.00 (2020: CHF 1,673.71).
Management investment plan
Short-term variable compensation for the Executive
Board is linked to the Management Investment Plan
(MIP). According to this plan, at least 50% of the annual
short-term variable remuneration of Executive Board
members is paid into the MIP. As for the remaining 50%of the annual short-term variable remuneration, the Executive Board members may either draw all or part of
it in cash or pay it into the MIP. They may redefine theallocation of this remaining 50% every year. The sharesare locked up for a period of three years.
The portion of variable remuneration that is settled
in the form of shares is recognized at fair value and­reported as a corresponding increase in equity. The
shares distributed under the MIP are issued at the unweighted average closing price of the Forbo share forthe first 14 trading days in January of the year in which
they were issued.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 127

The number of shares of Forbo Holding Ltd issued
in the year under review under the MIP was 113 (2020:
92). A further 169 shares (2020: 193) were allocated to
Executive Board members in the reporting year as partof the fixed base salary.
The amount charged to the income statement in application of IFRS 2 for shares issued came to CHF 4.4
million in the year under review (2020: CHF 3.0 million).

20 Share capital andcapital management
Share capital
As at December 31, 2021, the share capital of Forbo
Holding Ltd stood at CHF 165,000 (2020: CHF 165,000),
divided into 1,650,000 registered shares with a par valueof CHF 0.10 each. Of this amount 21,419 registeredshares without voting or dividend rights continued to
be at the disposal of the Board of Directors. Consequently, 1,628,581 (2020: 1,628,581) registered shareswere eli­gible for dividends as at December 31, 2021.

Change of shares issued and outstanding:

Total shares outstanding
Treasury shares
Treasury shares
Share buyback programs
Own shares with no dividend rights
Total treasury shares
Total shares issued and outstanding

At the Ordinary General Meeting held on April 5, 2019,
the Board of Directors of Forbo Holding AG was authorized to buy back 10% of the share capital over a periodof three years via a second trading line on the SIX Swiss
Exchange or otherwise. These shares are earmarked forcancelation. On the basis of this authorization, theBoard of Directors launched a share buy-back programon March 22, 2021, via the second trading line on the
SIX Swiss Exchange. On November 26, 2021 the Boardof Directors stopped the buy-back via the second trading line and placed an offer to buy back own shares at
a fixed price. On December 10, 2021 this offer ended
with the buy-back of 74,835 shares (4.54%). On December 14, 2021 the buy-back via the second trading line
resumed. Under the share buy-back program via thesecond trading line, a total of 75,790 shares (4.59%) wasbought back by December 31, 2021. The share buyback via the second trading line may be continued until
latest March 31, 2022.

31.12.2021
Number
1,650,000

ChangeNumber

31.12.2020
Number
1,650,000

53,086150,625
21,419225,130
1,424,870

3,740
150,625

49,346

154,365– 154,365

21,41970,765
1,579,235

Thus, under the 2019–2022 share buy-back program, a
total of 150,625 own shares (9.13%) was bought back by
December 31, 2021. At the next Ordinary General Meeting, the Board of Directors will propose the cancelationof all the shares bought back under this program.
Capital management
By capital management, the Group means management of consolidated shareholders’ equity as well as optimization of the capital employed. The former includes
the fully paid-up share capital, the positions ‘Treasury
shares’, ‘Reserves’, and ‘Translation differences’ and, as per
December 31, 2021, amounted to CHF 521.8 million(2020: CHF 683.5 million).

128 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

21 Leasing

The table below shows the right-of-use assets recognized under property, plant, and equipment.

The Group is the lessee for various fixed assets, in particular buildings and vehicles.

Right-of-use assets

Vehicles and otherproperty, plant, andequipment

Total property, plant, andequipment

13.1
5.7
– 0.3
– 6.6
– 0.4
11.5
5.7
– 0.4
– 6.3
– 0.1
10.4

41.8
26.6
– 4.0
– 16.2
– 1.3
46.9
17.8
– 0.4
– 16.5
– 0.5
47.3

CHF m
As at January 1, 2020
Additions
Derecognition
Depreciation
Translation differences
As at December 31, 2020
Additions
Derecognition
Depreciation
Translation differences
As at December 31, 2021

Land and buildings

Machinery and equipment

27.0
20.6
– 3.7
– 8.9
– 0.8
34.2
11.5
0.0
– 9.5
– 0.4
35.8

1.7
0.3
0.0
– 0.7
– 0.1
1.2
0.6
0.0
– 0.7
0.0
1.1

Interest from lease liabilities amounted to CHF 0.8 million in the year under review (2020: CHF 0.9 million).
Expenditure and payments for short-term leases cameto CHF 3.6 million (2020: CHF 3.2 million) and for leasesof low-value assets to CHF 1.0 million (2020: CHF 0.9
million). The recognized lease liabilities came to CHF
45.4 million at year-end (2020: CHF 45.2 million), statedin the current and non-current financial liabilities (seenote 22 ‘Financial instruments’).

The lease payments for recognized lease liabilities, including interest, came to CHF 18.5 million in the reporting year (2020: CHF 18.4 million).
The maturity analysis of the leasing liabilities as at December 31, 2021, is reported in note 23 ‘Risk assessmentand financial risk management’.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 129

22 Financial instruments
Classification and fair values
The table below shows the carrying amounts and fairvalues of financial assets and financial liabilities. It does

not contain any information on the fair value of financial assets and financial liabilities if the book value constitutes an appropriate approximate value for their current fair value.

Classification of financial instruments

CHF m
31.12.2021
Financial assets:
Cash and cash equivalents
Trade receivables
Other receivables
Non-current financial assets
Financial liabilities:
Derivative financial instruments
Current financial liabilities
Trade payables
Other current liabilities
Non-current financial liabilities

The item ‘Derivative financial instruments’ contains
open foreign exchange hedging and swap transactions
with a contract value at December 31, 2021, totaling
CHF 156.7 million (2020: CHF 31.5 million). The foreignexchange rates can be directly observed or determined. The derivatives are therefore assigned to hierarchy level 2.
‘Current financial liabilities’ and ‘Non-current financial
liabilities’ reflect the li­abilities from leasing. In the re-Carrying amount

Fair value throughprofit or loss

Amortized cost

Total

93.3
153.4
7.2
0.2

93.3
153.4
7.2
0.2

50.0
112.2
12.1
31.6

0.8
50.0
112.2
12.1
31.6

0.8

porting year, ‘Current financial liabilities’ included in ad­
dition a money market financing of CHF 36.2 million.
The carrying amount of the financial assets and financial liabilities valued at amortized cost is a reasonableapproximation for the fair value. The Group did not
hold any significant financial instruments measured atrecurring fair value nor was there any regrouping between the levels of the fair value hierarchy.

130 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Classification of financial instruments

CHF m
31.12.2020
Financial assets:
Derivative financial instruments
Cash and cash equivalents
Current financial assets
Trade receivables
Other receivables
Non-current financial assets
Financial liabilities:
Current financial liabilities
Trade payables
Other current liabilities
Non-current financial liabilities

Carrying amount

Fair value throughprofit or loss

Amortized cost

Total

255.8
0.1
141.4
13.0
0.2

0.0
255.8
0.1
141.4
13.0
0.2

14.1
94.4
11.1
31.1

14.1
94.4
11.1
31.1

0.0

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 131

23 Risk assessment and financial
risk management
The tasks of the Board of Directors include identifying
risks, determining suitable measures, and implementing those measures or having them implemented. The
Board of Directors of Forbo Holding Ltd conducted aGroup-wide risk assessment in the reporting year andalso determined the risks to be managed by particularmanagement levels. The Board of Directors is closely
involved in the assessment of strategic risks and, in
consultation with the Executive Board, ensures that
operational risks are dealt with appropriately and thatthey are duly reported. This approach gives the Board
a complete overview of the key risks and measures.
This broad overview enables the Group to set priorities
and allocate the necessary resources.
The Group is exposed to the following risks arising fromthe use of financial instruments:– Market risk
– Liquidity risk
– Default risk
Market risk
In its day-to-day operations, the Group uses derivativeand non-derivative financial instruments to manage
the risks and opportunities arising from fluctuations
in exchange rates and interest rates. The various risks
associated with existing assets and liabilities as well asplanned and anticipated transactions are monitored
and managed centrally – with due regard to theGroup’s overall risk exposure. In line with the Group’s
hedging policy, Corporate Treasury constantly monitors both the risk exposure and the effectiveness of thehedging instruments and issues recommendations
with regard to partial or complete hedging of existingrisks.
The Group uses derivative financial instruments solely
to manage financial risks and not for the purpose of
speculation. To hedge its currency risks, the Group uses
mainly currency cash transactions, forward currency
contracts, and currency swap transactions. In order tomanage counterparty risk, derivative financial transactions are concluded only with first-class banks. The
creditworthiness of these institutions is assessed on thebasis of evaluations by leading rating agencies.

No hedge accounting was used in this context in 2021
or 2020.
Foreign exchange risk management
Risks arising from short-term currency exposure created by purchases and sales of goods and services(transaction risks) are identified, and selective hedging
strategies are implemented in line with an ongoing assessment of exchange rate movements. The Group
uses foreign exchange forward and option contracts
with maturities of up to 15 months to hedge against
transaction risk.
Furthermore, risks associated with the translation of­assets and liabilities denominated in foreign currencies(translation risks) are managed by establishing an appropriate financing policy.
A realistic assessment of changes in interest rates for
the US dollar, the euro, the pound sterling and the
Swiss franc has no significant impact on the result andthe equity of the Group from the valuation of transactions with financial instruments.
Interest rate risks
Interest rate risks arise from changes in the fair valueof interest-bearing assets and liabilities caused by fluctuations in interest rates. Since these risks may have anegative effect on net financial profit and shareholders’equity, the Group uses derivatives to manage them ona case-by-case basis. A realistic assessment of changes
in interest rates for the US dollar, the euro, the poundsterling and the Swiss franc has no significant impact
on the result and the equity of the Group from the valu­
ation of transactions with financial instruments.
Liquidity risk
Liquidity risk is the risk that the Group may possibly beunable to meet contractually agreed financial obligations that are settled by delivering cash or other financial assets. Group companies need sufficient cash in order to meet their commitments. Corporate Treasury is
responsible for managing liquidity. The share of the aggregate cash and cash equivalents managed by Corporate Treasury was around 60% on December 31, 2021.
At present, the Group regards a cash level of roughly
CHF 60 million as sufficient to meet its payment obligations at all times.

132 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

The maturity structure of the existing financial liabilities
is shown in the following table. These liabilities correspond to contractually agreed maturities and represent

nominal payment outflows. Inflows and outflows offunds from derivative financial instruments are shown
separately.

As at December 31, 2021

CHF m
Interest-free liabilities
Liabilities from leasing
Liabilities from money market financing
Cash outflow from financial derivatives

Total Cashoutflow/
inflow (–)
124.3
46.8
36.2
0.8

Remaining term
to maturity
up to
1 year
124.3
14.0
36.2
0.8

Total Cashoutflow/
inflow (–)
105.5
46.8
– 0.0

Remaining term
to maturity
up to
1 year
105.5
15.8
– 0.0

Remaining term
to maturity
1 – 2 years

Remaining term
to maturity
2 – 5 years

Remaining term
to maturity
over 5 years

13.6

15.7

3.5

Remaining term
to maturity
1 – 2 years

Remaining term
to maturity
2 – 5 years

Remaining term
to maturity
over 5 years

12.4

14.3

4.3

As at December 31, 2020

CHF mInterest-free liabilities
Liabilities from leasing
Cash inflow from financial derivatives

Default risk
Default risk is the risk of financial losses in the event thata customer or the counterparty in a financial instrument fails to meet his or its obligations. The risk consists
mainly of trade receivables and bank accounts or shortterm deposits with banks. The maximum amount of thedefault risk is the book value of the financial assets.

Cash and cash equivalents
With regard to counterparty risk exposure to banks,Group-wide directives stipulate that financial investments and other financial transactions are to be madeonly with first-class banks. Given the credit ratings ofthese counterparties, the Group does not anticipate
any defaults.

The Group recognizes allowances for expected credit
losses on financial instruments that are reported atamortized costs. It assesses at the end of each reporting period whether there is an objective basis for further impairment of a financial asset and whether theallowances made are still appropriate.

Trade receivables
The Group’s default risk is affected mainly by the individual characteristics of its customers. Management,
however, also takes into account the characteristics ofthe customer base as a whole, including the default
risk of the sector and of the countries in which the customers operate, since these factors may also affect thedefault risk.

The Group considers a financial asset to be in default if
it is unlikely that the borrower can pay his obligation to
the Group in full without the Group having to take recourse to measures such as the realization of collateral.

To manage this risk adequately, the financial creditworthiness of various customers is constantly monitored.
Credit risks are diversified by the company’s broad customer base in various business segments and geographic regions.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 133

Carrying amounts of trade receivables by currency:

CHF m
CHF
EUR
USD
JPY
GBP
CNY
SEK
Other
Total trade receivables, before loss allowance

The Group employs a model of valuation allowances(‘provision matrix’) for trade receivables. In this valuation allowance table, expected losses on receivables
are determined on the balance sheet date on the basis

31.12.2021

31.12.2020

1.7
70.7
23.1
13.2
9.8
7.1
4.8
27.8
158.2

1.2
67.5
22.4
12.0
8.3
6.1
4.1
25.9
147.5

of past experience of default probability and of future-oriented expectations based on experience withthe customers and market conditions.

As at December 31, 2021
CHF m
Not due
Overdue ≤ 30 days
Overdue 31 – 90 days
Overdue 91 – 180 days
Overdue > 180 days
Total

Gross carrying
amount
141.3
7.4
5.2
2.6
1.7
158.2

Loss allowance
1.9
0.2
0.3
0.6
1.2
4.2

Weighted averageloss rate
1.3%
2.7%
5.8%
23.1%
70.6%
2.7%

Credit impaired
0.0
0.0
0.0
0.1
0.5
0.6

Gross carrying
amount
131.6
8.1
4.0
1.7
2.1
147.5

Loss allowance
3.0
0.3
0.3
0.4
1.6
5.6

Weighted averageloss rate
2.3%
3.7%
7.5%
23.5%
76.2%
3.8%

Credit impaired
0.0
0.0
0.2
0.1
0.2
0.5

As at December 31, 2020
CHF m
Not due
Overdue ≤ 30 days
Overdue 31 – 90 days
Overdue 91 – 180 days
Overdue > 180 days
Total

134 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Changes in valuation allowances for doubtful trade receivables during the reporting year:

CHF mJanuary 1
Additions
ReleaseUse
Translation differences
As at December 31

The creation and release of allowances for doubtful
trade receivables are included in ‘Other operating expenses and income’ in the income statement.

2021

2020

– 6.1
– 0.8
1.0
1.1
0.0
– 4.8

– 6.0
– 1.3
0.3
0.6
0.3
– 6.1

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 135

24 Related party transactions
Compensation paid to members of the Board of Directors and Executive Board:
Executive Board
CHF mRemuneration
Employer contributions to the pension scheme
Share-based payments
Total payments

2021
2.28
0.22
1.11
3.61

2020
1.45
0.21
0.39
2.05

The compensation paid to the Executive Board consists of a fixed gross base salary, short-term variable
remuneration in cash, private use of the company car,and social security payments made by the company.
Employer contributions to the pension fund are reported separately. The share-based remuneration paid
to the Executive Board consists of the following elements: a fixed base salary portion, which is paid inshares; short-term variable re­muneration under theManagement Investment Plan (MIP) for the reporting
year; and the future subscription rights, awarded pro
rata for the reporting year and weighted in accordancewith target achievement in the reporting year in theform of performance share units for the long-term incentive plans 2019–2021, 2020–2022 and 2021–2023(see note 19 ‘Employee participation plan’).

25 Events after the balance sheet date
Between the balance sheet date and the date of publication of this annual report no event occurred that
could have a significant effect on the 2021 annual financial statements.

Board of Directors
2021
1.20
0.19
2.60
3.99

2020
1.01
0.19
2.60
3.80

Total
2021
3.48
0.41
3.71
7.60

2020
2.46
0.40
2.99
5.85

The remuneration paid to the Board of Directors includes a gross base remuneration in cash, employer
contributions to the usual social insurances, lump sum
and on-site expenses, and private use of the company
car (only for the Executive Chairman).
The share-based remuneration paid to the Board of
Directors includes a gross base remuneration in shares,
consisting on the one hand of a 40% portion of the
remuneration in shares for the non-executive Board
members and, on the other hand, of the share-based
portion of the remuneration for the Executive Chairman.
As at December 31, 2021 and 2020, the Group had no
significant receivables due from or liabilities to relatedparties.

136 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Group companies(as at December 31, 2021)

Currency

Share capital

Wetherill Park, NSW
Wetherill Park, NSW

AUD
AUD

1,400,000
7,100,000

100%
100%

S

Austria
Forbo Flooring Austria GmbH
Forbo Siegling Austria Ges.m.b.H.

ViennaViennaEUR
EUR

72,673330,000

100%
100%

S

Belgium
Forbo Flooring N.V.

Groot-Bijgaarden

EUR

250,000

100%

S

BrazilForbo Pisos Ltda.
Forbo Siegling Brasil Ltda.

São PauloSão Paulo

BRL
BRL

16,564,200
7,008,746

100%
50%

S

CanadaForbo Flooring Canada Corp.
Forbo Siegling Canada Corp.

Halifax
Halifax

CAD
CAD

500,200
501,000

100%
100%

S

Chile
Forbo Siegling Chile S.A.

Santiago

CLP

313,090,945

50%

S

Colombia
Forbo Siegling Colombia S.A.S.

Bogotá, D.C.

COP

2,250,000,000

100%

S

Czech Republic
Forbo Siegling Česká republika s.r.o.
Forbo s.r.o.

Liberec
PragueCZK
CZK100,000
500,000

100%
100%

Denmark
Forbo Flooring A/SForbo Siegling Danmark A/S

Glostrup
Brøndby

DKK
DKK

500,000
33,000,000

100%
100%

S

Finland
Forbo Flooring Finland Oy

HelsinkiEUR

33,638100%

SFranceForbo Château-Renault S.A.S.
Forbo Participations S.A.S.
Forbo Reims SNC
Forbo Sarlino S.A.S.
Forbo Siegling France S.A.S.

Château-Renault
Reims
Reims
Reims
Lomme

EUR
EUR
EUR
EUR
EUR

1,000,000
5,000,000
3,879,810
6,415,500
819,000

100%
100%
100%
100%
100%

MS

Group company

Registered office

Australia
Forbo Floorcoverings Pty. Ltd.
Forbo Siegling Pty. Ltd.

S Sales
MS Manufacturing and Sales
H Holding/Services
N Not consolidated as at December 31, 2021
D Direct participation of Forbo Holding Ltd

N

N

D

Flooring
Systems

Movement
Systems

Equityinterest

Holding/Services

S

S

MS

S

S
S

MS

H
MS
S
S

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 137

Currency

Share capital

EUR
EUR
EUR
EUR
EUR

15,400,000
2,050,000
500,000
10,230,000
100,000

100%
100%
100%
100%
100%

Derbyshire
Kirkcaldy
Derbyshire
Dukinfield
Derbyshire
Derbyshire

GBP
GBP
GBP
GBP
GBP
GBP

22,000,000
48,000,000
50,77449,500,000
400,000

100%
100%
100%
100%
100%
100%

Hong Kong

HKD

1

100%

Delhi
Pune

INR
INR

15,000,000
26,000,000

100%
100%

Indonesia
PT Forbo Siegling Indonesia

Kabupaten Bandung

IDR

6,344,580,000

100%

Ireland
Forbo Ireland Ltd.

DublinEUR125,000

100%

S

Segrate (Milan)
Paderno Dugnano(Milan)EUR
EUR

60,000120,000

100%
100%

S

Tema S.r.l.

Parma

EUR

50,000

100%

S

Japan
Forbo Siegling Japan Ltd.

Tokyo

JPY

330,000,000

100%

MS

Malaysia
Forbo Siegling SDN. BHD.

Johor Bahru

MYR

2,500,002

100%

S

MexicoForbo Siegling, S.A. de C.V.

Tlalnepantla

MXN

24,676,404

100%

MS

Group company

Registered office

Germany
Forbo Beteiligungen GmbH
Forbo Eurocol Deutschland GmbH
Forbo Flooring GmbH
Forbo Siegling GmbH
Realbelt GmbH

LörrachErfurtPaderborn
Hanover
LörrachGreat Britain
Forbo Flooring UK Ltd.
Forbo Floors UK Ltd.
Forbo-Nairn Ltd.
Forbo Siegling (UK) Ltd.
Forbo UK Ltd.
Westbond Ltd.
Hong Kong
Forbo International Hong Kong Ltd.
India
Forbo Flooring India Pvt. Ltd.
Forbo Siegling Movement Systems
India Pvt. Ltd.

Italy
Forbo Resilienti S.r.l.
Forbo Siegling Italia S.p.A.

S Sales
MS Manufacturing and Sales
H Holding/Services
N Not consolidated as at December 31, 2021
D Direct participation of Forbo Holding Ltd

D

D

Flooring
Systems

Movement
Systems

Equityinterest

Holding/Services

H
MS
S
MS
S

MS
H
H
S
H
H

H

S
S

S

S

138 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Currency

Share capital

Equityinterest

Zaanstad
Krommenie
Krommenie
Krommenie
Coevorden
Spankeren

EUR
EUR
EUR
EUR
EUR
EUR

454,000
11,350,000
1,944,500
13,500,000
3,624,000
113,445

100%
100%
100%
100%
100%
100%

New Zealand
Forbo Siegling Ltd.

Auckland

NZD

650,000

100%

NorwayForbo Flooring AS
Forbo Siegling Norge AS

Asker
Oslo

NOK
NOK

1,000,000
100,000

100%
100%

People’s Republic of China
Forbo Movement Systems (China) Co., Ltd.
Forbo Shanghai Co., Ltd.
Forbo Siegling (China) Co., Ltd.

PinghuShanghai
Shenyang

USD
CHF
USD

25,000,000
4,000,000
16,221,000

100%
100%
100%

PolandForbo Siegling Poland sp. z o.o.

Łódź

PLN

600,000

100%

Portugal
Forbo-Revestimentos, S.A.

Maia (Porto)

EUR

74,850100%

Romania
Forbo Siegling Romania S.R.L.

Bucharest

RON

38,000100%

RussiaOOO ‘Forbo Flooring‘
OOO ‘Forbo Kaluga‘
OOO ‘Forbo Siegling CIS‘OOO ‘Forbo Eurocol RUS‘

Moscow
MoscowSaint Petersburg
Stary Oskol

RUB
RUB
RUB
RUB

500,000
158,313,780
400,000
187,181,000

100%
100%
100%
100%

Slovakia
Forbo Siegling s.r.o.

Malacky

EUR

1,000,000

100%

South Korea
Forbo Korea Ltd.

Seoul

KRW

900,000,000

100%Group company

Registered office

Netherlands
Forbo Eurocol Nederland B.V.
Forbo Flooring B.V.
Forbo Flooring Coral N.V.
Forbo NL Holding B.V.
Forbo-Novilon B.V.
Forbo Siegling Nederland B.V.

S Sales
MS Manufacturing and Sales
H Holding/Services
N Not consolidated as at December 31, 2021
D Direct participation of Forbo Holding Ltd

Flooring
SystemsMS
MS
MS

Movement
Systems

Holding/Services

H
MS
S

S

S
S

MS
S
MS

S

S

S

S
MS
S
MS

MS

S

S

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 139

Currency

Share capital

Equityinterest

Barcelona
Montcada i Reixac(Barcelona)

EUR
EUR

60,101
1,532,550

100%
100%

S

SwedenForbo Flooring AB
Forbo Siegling Svenska AB

GothenburgKållered (Gothenburg)

SEK
SEK

8,000,000
1,000,000

100%
100%

S

Switzerland
Forbo Management SA
Forbo-Giubiasco SA
Forbo Siegling Schweiz AG

Baar
Bellinzona
Wallbach

D

CHF
CHF
CHF

100,000
100,000
100,000

100%
100%
100%

Thailand
Forbo Siegling (Thailand) Co. Ltd.

Samut Prakan

D

THB

13,005,000100%

Istanbul

TRY17,500,000

100%

S

Ukraine
TOB ‘Forbo Flooring Ukraine’

Kiev

UAH

2,000,000

100%

S

United Arab Emirates
Forbo Flooring Middle East DMCC

Dubai

AED

499,000

100%

S

USA
Forbo America Inc.
Forbo America Services Inc.
Forbo Flooring, Inc.
Forbo Siegling, LLC

Wilmington, DE
Wilmington, DE
Wilmington, DE
Wilmington, DE

USD
USD
USD
USD

19,957,259
50,0003,517,000
15,455,000

100%
100%
100%
100%

Group company

Registered office

Spain
Forbo Pavimentos, S.A.
Forbo Siegling Iberica, S.A.U.

TurkeyForbo Hareket ve Zemin Sistemleri Ticaret
Limited irketi

S Sales
MS Manufacturing and Sales
H Holding/Services
N Not consolidated as at December 31, 2021
D Direct participation of Forbo Holding Ltd

D

Flooring
Systems

Movement
Systems

Holding/Services

S

S

H
MS
MS

S

S

H
H
S
MS

140 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Report of the statutory auditor

Statutory Auditor's Report
To the General Meeting of Forbo Holding Ltd, Baar

Report on the Audit of the Consolidated Financial Statements
OpinionWe have audited the consolidated financial statements of Forbo Holding Ltd, and its subsidiaries (the Group),
which comprise the consolidated balance sheet as at 31 December 2021 and the consolidated income statement, statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion the consolidated financial statements (pages 94 to 139) give a true and fair view of the consolidated
financial position of the Group as at 31 December 2021, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with International Financial Reporting Standards(IFRS) and comply with Swiss law.
Basis for Opinion
We conducted our audit in accordance with Swiss law, International Standards on Auditing (ISAs) and Swiss Auditing Standards. Our responsibilities under those provisions and standards are further described in the Auditor’s
Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independentof the Group in accordance with the provisions of Swiss law and the requirements of the Swiss audit profession,as well as the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional
Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key Audit Matters
VALUATION OF INVENTORIESKey audit matters are those matters that, in our professional judgment, were of most significance in our audit of
the consolidated financial statements of the current period. These matters were addressed in the context of ouraudit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 141

VALUATION OF INVENTORIESKey Audit Matter

Our response

We mainly performed the following audit procedures:
Inventory as at 31 December 2021 amounted to
CHF 262.9 million (31 December 2020: CHF 218.5 million) and represents one of the most material asset po- – We obtained an understanding of the process
sitions. Valuation allowance for inventories as at 31 Derelated to controls on incoming and outgoing goods
cember 2021 amounted to CHF – 33.0 million
and related to the identification of obsolete inventories. Based on this we critically assessed whether(31 December 2020: CHF – 32.8 million). Valuation oftransactions are completely and accurately recorded
inventories is consequently of significance to an underin the accounts.
standing of the financial statements.
Inventory is recognized at acquisition or manufacturing – Considering the diverse design of internal control
and IT systems of individual subsidiaries, we tested
costs and periodically assessed in terms of recoverabilthe operating effectiveness of identified key controls
ity. There is a risk that for work in progress and finishedrelating to existence and valuation of inventories.
goods the manufacturing costs exceed the actual sales
price less selling, distribution and administrative costs– We critically assessed the adequacy of the processes(net realizable value).
to identify, as well as the basis and the method tovalue, obsolete inventories. We recalculated the
Furthermore, determining valuation allowances therevaluation allowance for obsolete inventories and,
fore involves a certain degree of judgment.
based on a sample, reconciled it to the underlying
documentation.
– Furthermore, in testing the valuation of inventories atlower of cost or net realizable value, we compared
costs and sales prices. This was done on a case-bycase basis based on a sample or mass data analysis.
For further information on inventories refer to the following:–

Note 2 – Summary of significant accounting policies: inventories, page 104–

Note 13 – Inventories, page 117

142 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Report of the statutory auditor

Other Information in the Annual Report
The Board of Directors is responsible for the other information in the annual report. The other information comprises all information included in the annual report, but does not include the consolidated financial statements, thestand-alone financial statements of the company, the remuneration report and our auditor’s reports thereon.
Our opinion on the consolidated financial statements does not cover the other information in the annual report and
we do not express any form of assurance conclusion thereon.
In connection with our audit of the consolidated financial statements, our responsibility is to read the other information in the annual report and, in doing so, consider whether the other information is materially inconsistent withthe consolidated financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of thisother information, we are required to report that fact. We have nothing to report in this regard.
Responsibility of the Board of Directors for the Consolidated Financial Statements
The Board of Directors is responsible for the preparation of the consolidated financial statements that give a trueand fair view in accordance with IFRS and the provisions of Swiss law, and for such internal control as the Boardof Directors determines is necessary to enable the preparation of consolidated financial statements that are freefrom material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors is responsible for assessing the Group’s
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using thegoing concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease
operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as awhole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with Swiss law, ISAs and Swiss Auditing Standards will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in
the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with Swiss law, ISAs and Swiss Auditing Standards, we exercise professional
judgment and maintain professional skepticism throughout the audit. We also:–

Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

–

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theGroup’s internal control.

–

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made.

–Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosuresin the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 143–

Evaluate the overall presentation, structure and content of the consolidated financial statements, including
the disclosures, and whether the consolidated financial statements represent the underlying transactions andevents in a manner that achieves fair presentation.

–

Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditor’s report, unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.

144 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Report of the statutory auditor

Report on Other Legal and Regulatory Requirements
In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of consolidated financial statements according to the instructions of the Board of Directors.
We recommend that the consolidated financial statements submitted to you be approved.
KPMG AG{{Signatureleft}}{{Signatureright}}

Rolf Haueinstein
Licensed Audit Expert
Auditor in Charge

Regula Tobler
Licensed Audit Expert

Zurich, 2 March 2022

KPMG AG, Badenerstrasse 172, CH-8036 Zurich© 2022 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 145

146 FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheets
2017 – 2021
AssetsCHF mCurrent assets
Cash and cash equivalents
Current financial assets
Trade receivables
Other receivables
Accrued income and deferred expenses
Inventories
Non-current assets
Non-current financial assets
Deferred tax assets
Property, plant, and equipment
Intangible assets and goodwill
Total assets

Shareholders’ equity and liabilities
CHF mCurrent liabilities
Current financial liabilities
Trade payables
Other current liabilities
Current tax liabilities
Current provisions, accrued expenses, and deferred income
Non-current liabilities
Non-current financial liabilities
Deferred tax liabilities
Non-current provisions
Employee benefit obligations
Total liabilities
Shareholders’ equity
Share capital
Treasury shares
Reserves and retained earnings
Total shareholders’ equity and liabilities

31.12.2021

31.12.2020

31.12.2019

31.12.2018

31.12.2017

553.6
93.3
0.0
153.4
32.2
11.8
262.9
428.0
0.2
37.4
294.8
95.6
981.6

668.7
255.8
0.1
141.4
39.7
13.2
218.5
442.1
0.2
45.4
295.7
100.8
1,110.8

652.1
217.7
0.0
160.4
23.7
14.8
235.5
445.3
0.2
45.4
291.8
107.9
1,097.4

567.3
127.4
0.1
168.9
26.0
14.8
230.1
412.7
0.3
39.9
259.4
113.1
980.0

638.2
195.4
0.0
169.2
27.6
19.4
226.6
429.3
0.3
39.0
267.6
122.4
1,067.5

31.12.2021

31.12.2020

31.12.2019

31.12.2018

31.12.2017

314.5
50.8
112.2
30.0
20.4
101.1
145.3
31.6
9.8
35.5
68.4
459.8
521.8
0.2
– 0.1
521.7
981.6

251.5
14.1
94.4
30.4
16.6
96.0
175.8
31.1
8.9
46.5
89.3
427.3
683.5
0.2
– 0.1
683.4
1,110.8

257.3
13.4
98.1
28.2
19.0
98.6
163.5
26.8
11.2
46.9
78.6
420.8
676.6
0.2
– 0.1
676.5
1,097.4

261.9
0.1
109.2
28.7
16.2
107.7
126.5
0.0
12.1
40.7
73.7
388.4
591.6
0.2
– 0.1
591.5
980.0

275.3
0.2
105.9
32.4
26.5
110.3
131.0
0.2
10.8
32.3
87.7
406.3
661.2
0.2
– 0.1
661.1
1,067.5

FORBO ANNUAL REPORT 2021 – CONSOLIDATED FINANCIAL STATEMENTS 147

Consolidated income statements
2017 – 2021
1.1. – 31.12.
CHF m
Net sales
Cost of goods sold
Gross profit
Development costs
Marketing and distribution costs
Administrative costs
Other operating expenses
Other operating income
Operating profit
Financial income
Financial expenses
Group profit before taxes
Income taxes
Group profit for the year from continuing operations
Group profit for the year from discontinued operations after taxes
Group profit for the year

2021

2020

2019

2018

2017

1,254.0– 803.0
451.0– 15.9– 175.3– 92.8
– 7.2
19.2
179.0
3.0
– 0.8
181.2
– 40.0
141.2
0.0
141.2

1,117.7– 707.5
410.2– 15.2– 171.3– 86.4– 15.2
14.9
137.0
0.7
– 1.6
136.1
– 29.9
106.2
0.0
106.2

1,282.2– 788.6493.6– 16.0– 191.4– 92.8– 26.2
9.1
176.3
0.8
– 1.8
175.3
– 37.0
138.3
0.0
138.3

1,327.0– 824.9
502.1– 16.6– 198.1– 96.1– 23.5
7.5
175.3
0.9
– 0.6
175.6
– 38.0
137.6
0.0
137.6

1,246.4– 764.5
481.9– 15.5– 195.8– 94.7– 106.5
10.5
79.9
0.9
– 0.8
80.0
– 43.5
36.5
2.2
38.7

148

FINANCIAL REPORT
Financial statements for Forbo Holding LtdBalance sheet
Income statementNotes to the financial statements
Proposal for appropriation of available earnings
Report of the statutory auditor

149
150
151
152
157
158

150 FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Balance sheet for Forbo Holding Ltd(before appropriation of available earnings)
AssetsCHF
Current assets
Cash and cash equivalents
Other receivables from Group companies
Accrued income and deferred expenses
Non-current assets
Loans to Group companies
Investments in Group companies
Total assets

Shareholders’ equity and liabilities
CHF
Current liabilities
Current liabilities to third parties
Other liabilities to Group companies
Accrued expenses and deferred income
Shareholders’ equity
Share capital
Statutory reserves:
General reserves
Capital contribution reserves
Reserves for treasury shares
Available earnings:
Retained earnings
Net profit for the year
Treasury shares
Total shareholders’ equity and liabilities

31.12.2021

31.12.2020

587,936
59,270133,093395,573
390,518,977
101,161,473
289,357,504
391,106,913

43,320,189
21,103,730
21,914,140
302,319395,379,970
106,022,466
289,357,504
438,700,159

31.12.2021

31.12.2020

6103,274,930
2,905,439
99,979,656
389,835
287,831,983
165,000

660,922
158,632
121,707
380,583
438,039,237
165,000

8

15,600,000
15,302
3,571,618

15,600,000
15,302
4,114,262

454,063,357
157,770,500– 343,353,794
391,106,913

434,644,705
50,422,233– 66,922,265
438,700,159

Note

2

3
4

Note

2

8

FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 151

Income statement for Forbo Holding Ltd

1.1. – 31.12.
IncomeCHF
Financial income:From investments in Group companies
From securities and current investments
Total income

2020

167,544,000
172,066
167,716,066

55,392,500
224,169
55,616,669

2021

2020

4,986,644
4,958,922
0
9,945,566
157,770,500

4,984,068
231,091– 20,723
5,194,436
50,422,233

Note

1.1. – 31.12.
Expenses
CHF
Administrative expenses
Financial expenses
Taxes
Total expenses
Net profit for the year

2021

Note

9
10
5

152 FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Notes to the financial statements
for Forbo Holding Ltd
1 Accounting
These financial statements have been prepared in accordance with the provisions on accounting and financial reporting of the Swiss Code of Obligations (32ndtitle of the Swiss Code of Obligations). Forbo Holding
Ltd publishes consolidated financial statements according to a generally accepted accounting standard(IFRS). Therefore, in accordance with the provisions on
accounting and financial reporting, the financial statements are presented without disclosure notes relating
to audit fees or a cash flow statement.

2 Other receivables from andliabilities to Group companies‘Other receivables from Group companies’ comprisethe claims on cash pool accounts and ’Other liabilities
to Group companies’ comprise primarily the credit balances on cash pool accounts. The increase in liabilities
is attributable to the current share buy-back program.
Under the 2019-2022 share buy-back program, a totalof 150,625 shares (9.13% of the share capital) with a value of CHF 269.2 million was bought back by December
31, 2021.

3 Loans to Group companies
The loans were valued at the rate prevailing on thebalance sheet date; unrealized exchange losses werebooked, while unrealized exchange gains were notrecognized.
The item contained loans at an unchanged level of
EUR 97.8 million.

4 Investments in Group companies‘Investments in Group companies’ are measured at thecost of acquisition less necessary valuation allowances.

As at December 31, 2021, Forbo Holding Ltd held thefollowing direct investments:

Investments in Group companies
Company

Registered office

Activity

Forbo America Inc.
Forbo Beteiligungen GmbH
Forbo Management SA
Forbo Participations S.A.S.
Forbo Siegling, S.A. de C.V.
Forbo Siegling (Thailand) Co. Ltd.

US-Wilmington, DE
DE-Lörrach
CH-Baar
FR-Reims
MX-Tlalnepantla
TH-Samut Prakan

Holding/Services
Holding/Services
Holding/Services
Holding/Services
Manufacturing and Sales
Sales

Currency

Share capital(in 1,000)

Equityinterest

USD
EUR
CHF
EUR
MXN
THB

19 95715 400100
5 000
24 67613 005

100%
100%
100%
100%
< 0,1%
69,1%

FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 153

5 Taxes
As in the previous year, Forbo Holding Ltd was able toclaim the entire participation deduction on dividend
income.

6 Share capital
As at December 31, 2021, the share capital of Forbo
Holding Ltd totaled CHF 165,000 (2020: CHF 165,000),
divided into 1,650,000 registered shares with a par value of CHF 0.10 each. 21,419 registered shares without
voting or dividend rights are at the disposal of theBoard of Directors.
At the Ordinary General Meeting held on April 5, 2019,
the Board of Directors of Forbo Holding AG was authorized to buy back 10% of the share capital over a periodof three years via a second trading line on the SIX Swiss
Exchange or otherwise. These shares are earmarked forcancelation. On the basis of this authorization, theBoard of Directors launched a share buy-back programon March 22, 2021, via the second trading line on the
SIX Swiss Exchange. On November 26, 2021, the Boardof Directors stopped the buy-back via the second trading line and placed an offer to buy back own shares at
a fixed price. On December 10, 2021, this offer ended
with the buy-back of 74,835 shares (4.54%). On December 14, 2021, the buy-back via the second trading line
resumed. Under the share buy-back program via thesecond trading line, a total of 75,790 shares (4.59%) wasbought back by December 31, 2021. The share buyback via the second trading line may be continued until

Treasury shares
As at January 1, 2021
Additions
Disposals
As at December 31, 2021

latest March 31, 2022. Thus, under the 2019–2022 sharebuy-back program, a total of 150,625 own shares(9.13%) was bought back by December 31, 2021. At thenext Ordinary General Meeting, the Board of Directors
will propose the cancelation of all the shares boughtback under this program.

7 Conditional capital
Originally, conditional capital of CHF 8.5 million for the
exercise of shareholder options and warrants in connection with a bond issue was created by a resolutionof the Annual General Meeting held on April 27, 1994.
Following the exercise of options in 1994, 1995, and1997 and reductions in the par value by CHF 22 pershare in 2003, CHF 8 per share in 2004, CHF 6 per sharein 2007, CHF 10 per share in 2008, and CHF 3.90 per
share in 2009, the conditional capital on December 31,
2021, remained unchanged against the previous year
at CHF 16,645.

8 Treasury shares
The treasury shares directly held in Forbo Holding Ltd
amounting to CHF 343.4 million on the balance sheet
date correspond to the value of all treasury shares valued at cost. The item ‘Reserve for treasury shares’ reflects
the treasury shares held by subsidiaries of Forbo Holding Ltd, amounting to CHF 3.6 million. Overall, the treasury shares held directly and indirectly developed asfollows over the period under review:

Cost
CHF
71,038,670
278,963,517– 3,076,776
346,925,411

Number ofregistered shares
70,765
156,475– 2,110225,130

154 FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

9 Administrative expenses

11 Contingent liabilities

Administrative expenses included stewardship costs,
the fees paid to the members of the Board of Directors,
the auditor’s fees, and usual administrative costs, mainly for the Ordinary General Meeting, the share register,
insurance and legally required announcements. Forbo
Holding Ltd does not employ any personnel.

Guarantees and letters of support to third parties in favor of Group companies amounted to CHF 6.6 million
at year-end 2021 (2020: CHF 6.7 million), of which as in
the previous year none were utilized.

10 Financial expenses
The financial expenses reflect in both periods unrealized losses on foreign currencies on loans to Group
companies in the amount of EUR 97.8 million.

The Group companies in Switzerland are treated for
purposes of value-added tax as a single-entity subject
to value-added tax (group taxation regime, Article 13,
Federal Act on Value-Added Tax). If one of the Group
companies is unable to meet its payment obligations
to the Federal Tax Administration, the other Group
companies bear joint and several liability.

14 Significant shareholders
According to information available to the Board of Directors, the following shareholders or groups of shareholders with restricted voting rights constituted signi­
ficant shareholders in the company pursuant to Article
663c Swiss Code of Obligations as at the reportingdate:

Michael Pieper, Hergiswil, and Artemis Beteiligungen I AG, Hergiswil

Number of shares412,637

As percentage
25.01

FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 155

Shareholdings
IN 2021
As at December 31, 2021, the individual members of
the Board of Directors and the Executive Board (including related parties) held the following number of sharesin Forbo Holding Ltd:
Shareholdings 2021
Name and function

Amountof shares

This E. Schneider, Executive Chairman
Michael Pieper, Vice Chairman and independent1) member
Dr. Peter Altorfer, Vice Chairman, independent1) member and Lead Independent Director
Claudia Coninx-Kaczynski, independent1) member
Dr. Reto Müller, independent1) member
Vincent Studer, independent1) member
Total Board of Directors
Michael Schumacher, Chief Executive Officer
Marc Deimling, Executive Vice President Movement Systems
Andreas Jaeger, Chief Financial Officer
Jean-Michel Wins, Executive Vice President Flooring Systems
Total Executive Board

35,677
412,637
1,453
389
746
1,058
451,960
0
80
3
254
337

1) Independent in accordance to ‘Swiss code of best practice forcorporate governance’.

IN 2020
As at December 31, 2020, the individual members of
the Board of Directors and the Executive Board (including related parties) held the following number of sharesin Forbo Holding Ltd:
Shareholdings 2020
Name and function

Amountof shares

This E. Schneider, Executive Chairman
Michael Pieper, Vice Chairman and independent1) member
Dr. Peter Altorfer, Vice Chairman, independent1) member and Lead Independent Director
Claudia Coninx-Kaczynski, independent1) member
Dr. Reto Müller, independent1) member
Vincent Studer, independent1) member
Total Board of Directors
Stephan Bauer, Chief Executive Officer
Marc Deimling, Executive Vice President Movement Systems
Urs Uehlinger, Chief Financial Officer
Jean-Michel Wins, Executive Vice President Flooring Systems
Total Executive Board

42,352486,856
1,406
357
714
1,019
532,704
2,345
54
253
275
2,927

1) Independent in accordance to ‘Swiss code of best practice for­corporate governance’.

156 FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

15 Events after the balance sheet date
Between the balance sheet date and the date of publication of this annual report no event occurred that
could have a significant effect on the 2021 annual financial statements.

FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 157

Proposal for appropriation of available
earnings of Forbo Holding Ltd
The Board of Directors proposes to the Ordinary General Meeting that the available retained earnings, consisting of:2021
CHF
Net profit
Retained earnings
Treasury shares
Total at the shareholders’ meeting’s disposal

157,770,500
454,063,357– 343,353,794
268,480,063

be appropriated as follows:
2021
CHF
Distribution ordinary dividend
To be carried forward
Total at the shareholders’ meeting’s disposal

At the Ordinary General Meeting of April 1, 2022, theBoard of Directors will propose an ordinary gross dividend of CHF 25.00 per registered share (2020: CHF
20.00). No distribution will be made for treasury shares
held by Forbo Holding Ltd or any of its subsidiaries on
the record date, which explains why the amount ofordinary dividends distributed may still change.

35,621,750
232,858,313
268,480,063

158 FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Report of the statutory auditor

Statutory
Statutory Auditor's
Auditor's Report
ReportTo the General Meeting of Forbo Holding Ltd, BaarTo the General Meeting of Forbo Holding Ltd, Baar

Report on the Audit of the Financial Statements
Report on the Audit of the Financial Statements
OpinionOpinionWe have audited the financial statements of Forbo Holding Ltd, which comprise the balance sheet as at 31 DeWe
have2021,
auditedof theForbo
Holding
Ltd, which
thefinancialbalancestatements,
sheet as at including
31 December
andthethefinancial
income statements
statement for
year
then ended,
and comprisenotes to thecember2021,
and the income
statement
for the year then ended, and notes to the financial statements, includingasummaryof significant
accounting
policies.
a summary of significant accounting policies.
In our opinion the financial statements (pages 150 to 156) for the year ended 31 December 2021 comply withIn
our opinion
statements(pages
150 to 156) for the year ended 31 December 2021 comply withSwiss
law andthe
thefinancial
company’s
articles ofincorporation.
Swiss law and the company’s articles of incorporation.
Basis for Opinion
Basis for Opinion
We conducted our audit in accordance with Swiss law and Swiss Auditing Standards. Our responsibilities under
We conducted
our
audit
in accordance
withdescribed
Swiss lawinand
Auditing
Standards. for
Ourtheresponsibilities
under
those
provisions
andstandards
are further
theSwiss
Auditor’s
Responsibilities
Audit of the Financial
those provisions
andofstandards
described inofthe
Audit of of
theSwiss
Financial
Statements
sectionour report.are
Wefurther
are independent
theAuditor’s
entity in Responsibilities
accordance withfor
thetheprovisions
lawStatements
section of ofourreport.
areprofession
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theSwissWe
audit
andofwefulfilled
our otherwith
ethicalin ac-law
and the requirementsof the Swiss audit profession and we have fulfilled our other ethical responsibilities in accordancewith these requirements.
cordance with these requirements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinWe believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
ion.
Report on Key Audit Matters based on the circular 1/2015 of the Federal Audit Oversight Authority
Report on Key Audit Matters based on the circular 1/2015 of the Federal Audit Oversight Authority
Key audit matters are those matters that, in our professional judgment, were of most significance in our audit ofKeyfinancial
audit matters
are thosemattersthat,in ourprofessional
judgment,
most
significancein ourtoaudit
thestatementsof thecurrent
period.
We
have determined
thatwere
thereofare
no keyaudit matters
com-ofthe financial
statements
municatein ourreport. of the current period. We have determined that there are no key audit matters to communicate in our report.
Responsibility of the Board of Directors for the Financial Statements
Responsibility of the Board of Directors for the Financial Statements
The Board of Directors is responsible for the preparation of the financial statements in accordance with the proviThe Boardof Directors
the preparationof the financial
statements
accordancewith thesionsof Swiss
law and istheresponsible
company’sfor
articlesof incorporation,and for suchinternal incontrolas the Board
ofproviDirecsionsof Swiss law
and the company’sof incorporation,
andstatements
for such internal
controlas theBoard misof Directors determines
is necessary
to enablearticles
the preparationof financial
that arefree frommaterial
tors determines
is necessary
to enable
the preparation of financial statements that are free from material misstatement,
whetherdue to fraud
or error.
statement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the entity’s ability to conIn preparing
the financial
theapplicable,
Board of Directors
is responsible
assessingentity’sabilityconcern
to continue
as a going
concern, statements,
disclosing, as
matters related
to goingfor
concern
and theusing
the goingtinue asa going concern,
applicable,
matters
relatedto going theconcerntheoperations,going concern
basis
of accounting
unlessdisclosing,the Board asof Directors
eitherintends
to liquidate
entityandor tousing
cease
or
basis
accounting
unless but
the toBoardof Directors either intends to liquidate the entity or to cease operations, or
has noofrealistic
alternative
do so.
has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free
Our
are to obtain reasonable
the financial
statements
as aincludes
whole arefromobjectives
material misstatement,
whether dueassurance
to fraud orabout
error,whether
and to issue
an auditor’sreport that
ourfree
opinfromReasonable
material misstatement,
due tooffraud
or error,andto issuean auditor’sreportthat
includes inouropinion.
assurance iswhether
a high levelassurance,but
is nota guaranteethat anaudit
conducted
accordion. Reasonableassurance
is a Auditing
high levelof assurance,
but is nota guarantee
an audit conductedin accordancewith Swiss law
and SwissStandards
will always
detecta materialthat
misstatement
when it exists.
Misancewith Swisslaw andStandards
will always
detect if,
a material
misstatement
when it exists.
Misstatements
can arise
fromSwiss
fraudAuditingor error andare consideredmaterial
individuallyor in the aggregate,
they could
statements becanexpected
arise fromor errorare considered
individuallyor in theaggregate,
they
could
reasonably
to fraud
influence
the andeconomicdecisions materialof users if,
takenon the basisof thesefinancialstatereasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
ments.

FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 159

As part of an audit in accordance with Swiss law and Swiss Auditing Standards, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:–

Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or
error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

–

Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of internal control.

–

Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made.

–Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the entity’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in
the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the entity to cease to continue as a going concern.

We communicate with the Board of Directors or its relevant committee regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore
the key audit matters. We describe these matters in our auditor’s report, unless law or regulation precludes public
disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be
communicated in our report because the adverse consequences of doing so would reasonably be expected tooutweigh the public interest benefits of such communication.

160 FORBO ANNUAL REPORT 2021 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Report of the statutory auditor

Report on Other Legal and Regulatory Requirements
In accordance with article 728a para. 1 item 3 CO and the Swiss Auditing Standard 890, we confirm that an internal control system exists, which has been designed for the preparation of financial statements according to the
instructions of the Board of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the company’s articles of incorporation. We recommend that the financial statements submitted to you be approved.
KPMG AG{{Signatureleft}}{{Signatureright}}

Rolf Hauenstein
Licensed Audit Expert
Auditor in Charge

Regula Tobler
Licensed Audit Expert

Zurich, 2 March 2022

KPMG AG, Badenerstrasse 172, CH-8036 Zurich© 2022 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Publisher: Forbo Holding Ltd, Baar/Concept and design: Hotz Brand Consultants, Steinhausen/Zug
Photos: Luxwerk, Zurich/Layout, lithography, and printing: Neidhart + Schön AG, Zurich
Our Annual Report appears in German language and in English translation and can be downloaded fromour website www.forbo.com. The printed German version is authoritative.
All statements in this report that do not refer to historical facts are forward-looking statements which areno guarantee of future performance. They are based on assumptions and involve risks and uncertainties aswell as other factors beyond the control of the company.

Forbo Holding Ltd
Lindenstrasse 8
CH-6340 Baar
Forbo Management SA
Lindenstrasse 8
CH-6340 Baar
Phone + 41 58 787 25 25
Fax + 41 58 787 20 25
info@forbo.com
www.forbo.com