ANNUAL REPORT 2022

CONNECT.
WELL-BEING
EFFICIENCYFORBO – IN EVERYDAY LIFE

WELL-BEING.

Our floor coverings meet the most exacting demands. They are
hard-wearing and cost-effective, and come in attractive designs.
The wide-ranging product portfolio matches the requirementsof diverse customer segments. Our textile, linoleum, and vinyl
floor coverings will be the right choice for different applications,
thanks to their specific properties. We select raw materials withsustainability in mind and use recycled components where
possible. The individual and innovative design of our products is
an ideal basis for a whole variety of flooring and creative interior
design concepts.

EFFICIENCY.

Conveyor belts are used in a wide range of applications. They
­ensure a streamlined flow of goods and efficient operational processes. We work constantly to increase the added value offeredby our versatile drive and processing belts and to maximize theirenvironmental compatibility, providing individual solutions for awide variety of industries and applications. To make sure our­customers’ operational processes run smoothly, we work closelywith their own specialists to develop new products and services.
This way, we can accommodate individual needs optimally.

6This E. Schneider
Executive Chairman
and CEO ad interim‘After some challenging years and the positive signs towards the endof 2021, we responded to volume growth in the first half of 2022 byincreasing investment in markets and sales activities, accompanied by
the expansion of operating structures and personnel. When demand
abruptly weakened in late summer 2022, especially in Flooring Systems,
we reacted with a delay in taking necessary actions, which put furtherpressure on earnings in the second half of 2022.
The relevant measures have now been introduced, and we are wellprepared to face the challenges ahead, despite a business environment that remains demanding.
We will continue to broaden our attractive and innovative productportfolio, expand our range of services, and invest in growth markets,
digitization, and new product technologies.’

FORBO ANNUAL REPORT 2022 – LETTER TO SHAREHOLDERS

7

TO OURSHAREHOLDERS
Dear Madam, dear Sir,
Forbo looks back on a mixed year. We made a good start to 2022 after the pandemic-affected performances ofprevious years. This changed in an environment that became challenging once again from spring 2022 due tothe difficult geopolitical and financial situation. Profitability was held back by significant increases in the cost of
raw materials, transport, and energy along with higher personnel and other costs. It was possible to reduce theextent of this effect, though with a certain time lag, by raising sales prices. In addition, the sales development in
Asia/Pacific was affected by renewed Covid lockdowns in China.
Overall, Forbo dealt well with most of these challenges in the first half of 2022. Afterwards, however, demandbegan to decline in late summer 2022, with this trend accelerating in the fourth quarter 2022. Volume growthin the first half of 2022 gave way to an unexpectedly sharp fall in demand in the second half – with Flooring
Systems being increasingly hard hit. As a result, volumes were lower for the year as a whole.
In 2021, Forbo’s sales and earnings had returned to the pre-pandemic levels of 2019. In the first half of thereporting year, the Group expanded structures and staffing levels significantly, with a view to achieving further
growth. From late summer 2022, this much higher cost base was set against an increasingly sharp decline involumes, which together resulted in substantially lower earnings. At the same time, the cost of raw materials,
energy, and logistics continued to rise. However, thanks to our innovative, high-quality products and services,
we were able to offset most of these increases with corresponding sales price increases.
Owing to the stronger Swiss franc, the translation of local results into the corporate currency produced anegative currency effect year on year, with a CHF 67 million impact on sales. Many of our main operating
currencies were affected, in particular the euro, the pound sterling, the Japanese yen, and the Swedish krona.
Only the US dollar yielded a positive effect.

Significant decline in demand from late summer 2022
Sales growth in all regions thanks to sales price increases
In the year under review, Forbo generated net sales of CHF 1,293.2 million (previous year: CHF 1,254.0 million), up
8.5% in local currencies. This was largely attributable to increases in sales prices amounting to 11.0%. Due tonegative currency effects, this equates to a rise in sales of 3.1% in the corporate currency. All three regions
contributed to this sales growth in local currencies: + 12.0% in Asia/Pacific, + 8.0% in Europe, and + 7.6% in theAmericas.
Net sales at Flooring Systems rose by 9.0% in local currencies to CHF 878.0 million (previous year: CHF 851.8
million). This corresponds to an increase of 3.1% in the corporate currency. After a positive first half-year, demand
declined sharply from late summer 2022, becoming even stronger in the fourth quarter. One of the reasons forthis was the shift away from renovation projects to energy-saving projects due to the energy crisis. This cameat the expense of flooring orders. There was also caution in general about taking on new major projects, due tothe significant rise in construction costs.
Movement Systems recorded net sales of CHF 415.2 million (previous year: CHF 402.2 million), a rise of 7.3% in
local currencies and 3.2% in the corporate currency. In all customer segments, sales returned to pre-pandemic
levels, as in some areas there was a discernible catch-up effect. There was an above-average increase in demandfor conveyor and processing belts used in industrial production, for flat belts used in packaging plants, and forconveyor belts for sports treadmills in fitness centers and for processing raw materials.

8

FORBO ANNUAL REPORT 2022 – LETTER TO SHAREHOLDERS

Profitability affected by slump in demand andone-time impacts
Declining volumes and a significant increase in the cost structure resulted in a strong decreasein EBIT and margins
On the basis of the positive market development at the end of 2021 and beginning of 2022, structures wereexpanded and staffing levels significantly increased in the first half of 2022. From late summer 2022, this was
set against an increasingly strong decline in volumes, which together resulted in substantially lower earnings.
At the same time, costs of raw materials, energy, and logistics continued to rise. Sales price increases had apositive effect on the result, as did the initiatives to increase earnings introduced in the second half of 2022.
The operating result was further impaired by a number of one-time impacts totaling CHF 20 million, themajority of which affected Flooring Systems. Due to the political and economic situation in Russia, impairments
were made on goodwill and property, plant, and equipment. Added to this was the cost of structural adjustments and various elements recognized in other operating expenses and income, including the creation ofprovisions for a number of legal cases.
Operating profit before depreciation and amortization (EBITDA) reduced by CHF 42.2 million, or 17.9%, to CHF
193.4 million (previous year: CHF 235.6 million). Group operating profit (EBIT) decreased by CHF 46.4 million, or
25.9%, to CHF 132.6 million (previous year: CHF 179.0 million). This resulted in an EBITDA margin of 15.0%(previous year: 18.8%) and an EBIT margin of 10.3% (previous year: 14.3%).

Group profit lower than in previous year
Lower earnings reflected in Group profit
As a result of the significantly lower operating profit (EBIT), a slightly higher tax rate of 22.6% (previous year:
22.1%), and a lower financial result of CHF – 1.6 million (previous year: CHF + 2.2 million) due to exchange rate
losses on foreign currencies, Group profit decreased by 28.2% or CHF 39.8 million to CHF 101.4 million(previous year: CHF 141.2 million).

Solid balance sheet
Significant decline in cash and cash equivalents, but sound equity baseInventories increased by 20.3% or CHF 53.3 million to CHF 316.2 million due to higher procurement andmanufacturing costs, complex supply chains, and challenges in the coordination of sales and production
planning. Net liquidity came to CHF 21.4 million at year-end 2022 (previous year: CHF 56.2 million). Thisdecrease was mainly attributable to the lower earnings and the significantly higher operating working capital.
In addition, as at December 31, 2022, Forbo held treasury shares valued at CHF 78.6 million. Free cash flow
declined by 60.6% to CHF 50.5 million (previous year: CHF 128.1 million), due to the strong decrease in earnings
and the higher value of inventories.
The solid equity ratio increased to 57.3% (previous year: 53.2%).
The undiluted earnings per share reflect the significantly lower earnings and therefore declined by 21.7% toCHF 71.76 (previous year: CHF 91.63).

9

Changes to the Executive Board
Changes to the Executive Board
In view of the earnings performance and differences of opinion about the management and direction of thecompany, the Board of Directors and CEO Michael Schumacher decided to terminate the employment. He
left the company at the end of November 2022. The Board of Directors would like to thank Michael Schumacher
for his commitment and wishes him all the best for the future.
The role of CEO has been assumed on an interim basis by This E. Schneider, Executive Chairman, who willoversee the introduction of the measures to increase earnings.
Jens Fankhänel takes over as the new CEO on March 1, 2023. As the former Chairman of the Executive Board of
the publicly listed Kardex Holding AG, he will quickly be able to bring his wide-ranging operational andstrategic experience of managing industrial companies to bear. He will continue to pursue the proven strategy
and implement operational matters in a focused way. Jens Fankhänel has been a member of the Board of
Directors and the Strategy Committee of Forbo Group since April 2022. With his appointment to the position ofCEO, he will step down from the Forbo Board of Directors at the coming Ordinary General Meeting.

Proposals to the Ordinary General Meeting
Elections to the Board of Directors
With the exception of Jens Fankhänel, all the current members of the Board of Directors will stand for reelection for a further one-year term of office.
This E. Schneider – Executive Chairman since 2014 – will, at the request of the Board of Directors and as
previously communicated in summer 2022, stand for election as full-time Chairman of the Board of D
­ irectors
at the upcoming Ordinary General Meeting.
Dividend adjusted in line with the decline in earnings
Due to the lower earnings and reduced cash flow in the reporting year, though with a sound equity base andconfidence that the earnings situation will improve, the Board of Directors will propose to the Ordinary General
Meeting that a dividend of CHF 23 per share be paid for the 2022 business year (previous year: CHF 25 pershare), corresponding to a payout ratio of 32 percent.
Authorization for a share buyback program
The Board of Directors will propose to the Ordinary General Meeting that it be authorized, over a period of three
years, to repurchase treasury shares up to a maximum of 10 percent of the share capital via a second tradingline on the SIX Swiss Exchange or by another means in order to reduce capital.

Priorities and outlook for 2023
Priorities 2023
Measures have been introduced and are being implemented to improve operating profitability and accelerate
the implementation of operational and strategic projects. These include focusing on essential projects,
optimizing aspects of sales and production planning, taking measures to increase efficiency, and adapting
structures in accordance with the lower volumes.
Forbo will continue to pursue the successful strategy of recent years. We have an attractive product portfolio
in both divisions. We are continuing to invest in line with the strategy in our range of products and services,in growth markets, in digitization, and in new production technologies and expansion – combined as always
with an improved carbon footprint and increased efficiency. We will exploit external opportunities for growth
if they create long-term added value.

10

FORBO ANNUAL REPORT 2022 – LETTER TO SHAREHOLDERS

Outlook for 2023
Thanks to its solid and healthy financial foundations, proven strategy and leading market position, Forbo iswell-placed to achieve further sustainable and profitable growth again and build on the levels of profitability
we have been accustomed to.
We expect the first half of 2023 to be a demanding period with volumes decreasing slightly compared with thesame period of 2022. Despite further inflation-related cost increases and ongoing high raw material prices,
we are convinced that the implemented measures and initiatives, a clear focus, as well as higher sales prices will
mitigate these factors.
Assuming there is no significant change in the geopolitical and economic environments, we anticipate slightly
higher sales in local currencies compared with the previous year. With the elimination of the one-time impacts
and implementation of the measures to improve operating profitability, we expect a Group profit in themagnitude of CHF 130 million if foreign exchange rates remain the same.

Thank youThanks to employees, business partners, and shareholders
This reporting year once again demanded a special effort and commitment from our employees to meet thevarious challenges we faced efficiently and effectively. With great commitment, flexibility, good communications, teamwork, and creativity we were able to respond to the changing circumstances, and overcome supply
chain bottlenecks and massive increases in costs in order to provide our customers with the reliable andcompetent service they have come to expect. Thank you all for your tireless commitment!
We also wish to thank our customers, business partners, and suppliers for their excellent cooperation in thesetimes that remain exceptional.
On behalf of the Board of Directors and the Executive Board, we would also like to thank you, our shareholders,for your ongoing loyalty and the trust you place in Forbo.

Baar, March 2023

This E. Schneider
Executive Chairman
and CEO ad interim

Financial calendar
Ordinary General MeetingPublication of Half-Year Report 2023
Publication of Annual Report 2023

Thursday, March 30, 2023
Friday, July 28, 2023
Tuesday, March 5, 2024

11

CONTENTS
At a glance
Forbo in figures
Slump in demand hits profitability
Committed to sustainability

Activity report
Two divisions with leading market positions
Flooring Systems: 
Noticeable slump in demand
Movement Systems:
Broad-based investments

13
16
20
24

33
34
36
42

Organization49
Executive BoardGroup structure 
Board of Directors

50
52
54

The Forbo share

57

Corporate governance report

61

Remuneration report

81

Forbo Group financial report

101

Consolidated balance sheet
102
Consolidated income statement
103
Consolidated comprehensive income statement
104
Consolidated statement of changes in equity
105
Consolidated cash flow statement
106
Notes – accounting principles
107
Notes117
Group companies
144
Report of the statutory auditor
148
Consolidated balance sheets 2018 – 2022
152
Consolidated income statements 2018 – 2022
153

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

155
156
157
158
161
162

12

13

AT A GLANCE
Forbo in figures
Slump in demand hits profitability Committed to sustainability

16
20
24

14

2022 AT A GLANCE

15

FORBO IS A LEADINGPRODUCER OF
FLOOR COVERINGS,BUILDING AND­CONSTRUCTIONADHESIVES, AS WELL
AS POWER TRANSMISSION AND
CONVEYOR BELT­S OLUTIONS.
The company employs about 5,400 people andhas an international network of 25 production
and distribution ­companies, 6 fabrication centersand 47 pure sales organizations in a total of 39
countries. Forbo is headquartered in Baar in the
canton of Zug, Switzerland.

16

FORBO ANNUAL REPORT 2022 – 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
Other local distribution companies
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
Other local distribution companies

17

Net sales 	 CHF 1,293.2 million
EBIT 		 CHF 132.6 million
EBIT margin 	
10.3%
Group profit	 CHF 101.4 million
Earnings per share	
CHF 71.76
undiluted

18

FORBO ANNUAL REPORT 2022 – AT A GLANCE

Net sales by division
Change on previous year
2022 CHF m
878.0
415.2
1,293.2

Flooring Systems
Movement Systems
Total

in %
3.1
3.2
3.1

in localcurrencies in %
9.0
7.3
8.5

In % of total
67.9
32.1
100.0

32.1%

Movement Systems

67.9%
Flooring Systems

Employees by division

2022 number
2,890
2,460
40
5,390

Flooring Systems
Movement Systems
Corporate Functions
Total

2,460

Movement Systems

2,890

Flooring Systems

40

Corporate Functions

Change onprevious year in %
– 4.3
– 0.5
2.6
– 2.6

In % of total
53.6
45.6
0.8
100.0

19

Financial overview Forbo Group
2022

2021

2022

2021

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

CHF m
1,293.2
878.0
415.2
193.4

CHF m
1,254.0
851.8
402.2
235.6

EUR m1)
1,288.0
874.5
413.5
192.6

EUR m1)
1,159.9
787.9
372.0
217.9

Operating profit (EBIT)Group profit

132.6
101.4

179.0
141.2

132.1
101.0

165.6
130.6

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

CHF m
960.2
879.2
550.1
21.4

CHF m
981.6
850.7
521.8
56.2

EUR m1)
956.4
875.7
547.9
21.3

EUR m1)
908.0
786.9
482.7
52.0

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

CHF m
80.6
– 30.1
50.5

CHF m
166.5
– 38.4128.1

EUR m1)80.3– 30.050.3

EUR m1)154.0– 35.5
118.5

%
15.0
57.3
– 3.9

%
18.8
53.2
– 10.8

Employees (as at December 31)
Total employees

Number
5,390

Number5,532

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

CHF
71.76
389.1623.004)CHF
91.63
338.5225.005)

EUR1)
71.47
388.0322.914)

EUR1)
84.76
313.1323.125)

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

CHF m
1,615.7

CHF m
3,085.5

EUR m1)
1,609.2

EUR m1)2,854.0

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

1) Euro values translated at the average annual exchange rate of CHF
1.0040/1 EUR (2022) and CHF 1.0811/1 EUR (2021).
2) Liquidity plus financial assets less financial liabilities, excluding
leasing liabilities.
3) See note 11 ‘Earnings per share’ on page 124 of the financial­report.

4) The Board of Directors proposes to the Ordinary General Meetingof March 30, 2023, the distribution of a dividend in the amount of
CHF 23.00 per registered share.
5) Approval of a dividend of CHF 25.00 per registered share at theOrdinary General Meeting of April 1, 2022.
6) Total number of shares multiplied by year-end share price.

20

FORBO ANNUAL REPORT 2022 – AT A GLANCESLUMP IN
­DEMAND HITS
­PROFITABILITY
For all areas of the Forbo organization
2022 proved to be a challenging year.
After a positive start to 2022, the business environment became increasingly
demanding from the spring onward
due to the difficult geopolitical and financial situation. The consequence was asignificant slump in demand, which
made its mark from the late summer andworsened during the fourth quarter. The
ongoing Covid lockdowns in China reinforced this trend in Asia/Pacific.

Volume growth in the first half of 2022
gave way to an unexpectedly significant
decline in the second semester, with
Flooring Systems being increasingly
affected. The result was a decline in­­volumes for the year overall.
Sharply rising costs for raw materials,
transport, and energy, along with increases in personnel and other costs aswell as negative currency effects, served
to undermine operating profitability further. Combined with one-time impacts,
this resulted in a significant reduction inearnings.

Net sales by geographic area
Change on previous year

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

2022
in %
12.0
11.9
9.5
7.4
6.2
2.4
14.3
63.7
17.7
4.2
21.9
14.4
100.0

in %
3.4
– 1.1
– 5.3
– 6.5
7.0
11.5
6.5
1.2
10.3
15.8
11.3
0.5
3.1

in local currencies in %
11.3
6.5
1.9
3.5
14.4
11.5
10.3
8.0
6.0
14.5
7.6
12.0
8.5

Sales growth in all regions due to sales priceincreases
Group net sales rose by 8.5% in local currencies to CHF
1,293.2 million (previous year: CHF 1,254.0 million), attributable in particular to sales price increases of 11.0%.

2022
CHF m
155.0
154.2
122.5
96.0
79.7
31.1
185.6
824.1
228.8
54.2
283.0
186.1
1,293.2

25

50

75

100

125

150

175

This corresponds to an increase of 3.1% in the corporate currency, once negative currency effects of CHF
67 million are factored in. Overall, the Asia/Pacific region saw the biggest sales growth in local currency
terms, followed by Europe and the Americas.

200

225

250

275

21

The Flooring Systems division generated net sales of
CHF 878.0 million in the 2022 business year (previous
year: CHF 851.8 million), which reflects growth of 9.0%
in local currencies (+ 3.1% in the corporate currency).
Asia/Pacific saw the highest effect with growth almostin double-digit figures in the Americas as well, and asimilar outcome in Europe.

The Movement Systems division generated net salesof CHF 415.2 million in the year under review (previous
year: CHF 402.2 million), which reflects an increase of
7.3% in local currencies (+ 3.2% in the corporate currency). Sales increased most substantially in Europe,
growth in Asia/Pacific was slightly lower, with theAmericas about the same level.

EBITDA by division
Flooring Systems
Movement Systems
Corporate

2022
CHF m
127.3
75.4
– 9.3

Change onpre­vious year in % – 25
– 23.6
1.6– 75.50Profitability affected by slump in demand andone-time impacts
Following the pandemic-affected performances ofprevious years, the successes achieved in 2021 were
the basis for further growth in the first half of 2022,­resulting in significant expansion of structures andworkforce. This higher cost base was set against an increasingly sharp decline in volumes. The combined effect was a substantial reduction in earnings. At thesame time, the costs of raw materials, energy, and logistics continued to rise. Price increases had a positiveeffect, though after a delay in some cases, as did themeasures and initiatives designed to increase earnings.
The operating result was further impacted by onetime impacts totaling CHF 20 million, the majorityof which affected Flooring Systems. The political andeconomic situation in Russia required impairments,
particularly on goodwill and property, plant, andequipment. Added to this were costs arising fromstructural adjustments and various elements affecting
other operating expenses and income.
Group operating profit before depreciation and amortization (EBITDA) declined by 17.9% to CHF 193.4 million (previous year: CHF 235.6 million). EBITDA at Flooring Systems decreased by 23.6% to CHF 127.3 million(previous year: CHF 166.7 million). At Movement Systems, EBITDA rose slightly, by 1.6% to CHF 75.4 million(previous year: CHF 74.2 million).
This resulted in a Group EBITDA margin of 15.0% (previous year: 18.8%). At Flooring Systems, the EBITDA
margin declined from 19.6% the previous year to
14.5% in the year under review, while at Movement
Systems the EBITDA margin decreased by 0.2 percentage points to 18.2% (previous year: 18.4%).

25

50

75

100

125

150

Group operating profit (EBIT) was 25.9% lower, at CHF
132.6 million (previous year: CHF 179.0 million). The
Group EBIT margin decreased from 14.3% the previous
year to 10.3% in the year under review.
Due to the significantly lower operating profit (EBIT), aslightly higher tax rate, and a reduced financial result
caused by exchange rate losses on foreign currencies,
Group profit reduced by 28.2% or CHF 39.8 million to
CHF 101.4 million (previous year: CHF 141.2 million).
Taxes and financial result
The tax rate in the year under review was 22.6% (previous year: 22.1%), slightly above the long-term average.
Financial expense in 2022 came to CHF 2.5 million (previous year: CHF 0.8 million), which includes comparable interest expense for both years and foreign exchange losses in the year under review. By contrast,
financial income decreased year on year to CHF 0.9
million (previous year: CHF 3.0 million). This again included interest income on a par with the previous year,
whereas exchange rate gains were made on foreign
currencies in 2021. On balance, the net financial resultcame to CHF – 1.6 million (previous year: CHF + 2.2­million).

22

FORBO ANNUAL REPORT 2022 – AT A GLANCE

Free cash flow
2022
CHF m
80.6
– 30.1
50.5

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

Cash flow performance affected by lower earnings
and increased inventories
In the reporting year, cash flow from operating activities was CHF 80.6 million (previous year: CHF 166.5 million), a marked decrease due to much lower earnings
and higher inventories. The significant increase in inventories is attributable to the rise in prices of raw materials and challenges in the coordination of sales andproduction planning. On the other hand, inventoriesof raw materials were deliberately built up to ensure
availability because of the complex supply chains. Beside the increased stock level, the amount of trade receivables also rose. Cash flow from investing activities
declined due to increased delivery times for components for technical upgrades and new production
plant parts and came to CHF – 30.1 million (previous
year: CHF – 38.4 million). Free cash flow thus totaled
CHF 50.5 million (previous year: CHF 128.1 million).

2021
CHF m
166.5
– 38.4
128.1

– 50

0

50

100

150

200

Solid balance sheet
Total assets as at December 31, 2022, reduced by CHF
21.4 million and stood at CHF 960.2 million (previous
year: CHF 981.6 million). This was mainly attributable tocurrency translation differences and the 2022 portionof the share buyback. Net cash decreased by CHF 34.8
million to CHF 21.4 million (previous year: CHF 56.2 million), which was mainly due to the significantly higher
operating working capital as well as lower earnings
and the share buyback. Shareholders’ equity rose by
CHF 28.3 million, mainly due to Group profit, and as at
the end of December 2022 was CHF 550.1 million (previous year: CHF 521.8 million). By comparison, the previous year included a much higher amount for repurchased shares. The equity ratio remained solid at 57.3%(previous year: 53.2%).

Investments 2018 – 2022

2022
2021
2020
2019
2018

Flooring
Systems
CHF m

Movement
Systems
CHF m

Total
CHF m

18
23
21
23
25

13
15
19
13
13

31
39
40
36
39

Value-adding investments
Our investments are wide-ranging, combining the demands of sustainability with efficiency gains in operating processes. In the reporting year, both divisions­invested in important activities and strategic projects.
These spanned product portfolio, technology, infrastructure, and specific capacity expansion pro­jects. Total Group investments in property, plant, and equipment and intangible assets in 2022 were CHF 30.9
million (previous year: CHF 38.8 million). The lower value in the year under review was the result of delays inthe supply of plant and machinery parts for technicalupgrades. These were caused by bottlenecks in availability on the part of suppliers, along with more difficult logistics and shipping terms and conditions.

10

20

30

In the reporting year, Flooring Systems invested CHF
17.9 million (previous year: CHF 23.4 million) in various
production sites, accompanied by environmental improvements to optimize the circular economy. Technical upgrades enable offcuts and recycled coverings
from the vinyl production process to be reused in a
number of collections – for vinyl backing on Flotex
floor coverings or acoustic vinyl products. New mist
filter technology at the vinyl floor coverings plant in
Coevorden significantly reduces gas and CO2 output.
A new laminating line for loose lay design flooringraises the service level. In linoleum production, a­­number of processing stages, including cutting lines
and mixers, were upgraded or redesigned for new­collections and installing options.

40

23

Investment in property, plant, and equipment at
Movement Systems came to CHF 13.0 million (previous
year: CHF 15.4 million). This amount includes various
upgrades and technical additions to production plants,
long-term infrastructure projects and capacity expansions, for example new control systems for mixing
equipment and coating machines at several locations,a photovoltaic installation, a high-tech exhaust air system, and a dual-fuel burner. New slitting equipment

was purchased for the manufacturing centers in Germany and Slovakia, along with a storage rack system.
Additional injection molding machines and the relevant specialist tools were acquired for the Prolink plastic modular belts in Denmark, rounding off the capacity expansion. A major part of the investments went
into a new production line for Transilon belts at the site
in Pinghu/China.

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

2022
Change on
in % pre­vious year in %19.7
– 10.2
12.6
1.8
9.2
– 5.0
7.6
– 0.2
3.5
2.8
3.4
2.2
14.1
– 2.9
70.1
– 3.8
15.3
0.4
10.9
0.5
3.7
0.5
14.6
0.5
100.0
– 2.6

2022
number
1,061
681
497
407
186
183
762
3,777
826
588
199
787
5,390

Operating structures and headcount adjusted
At year-end 2022, the Forbo Group employed 5,390
people. This is a total of 142 fewer than at the end of
the previous year. The individual percentage changes
in staffing levels mostly reflect market trends and thebusiness performance in the different countries andregions. They mirror the situation on the reporting
date at the end of the year.

200

400

600

800

1,000

1,200

1,400

In order to cushion the negative impact of the sharp
downturn in demand from late summer 2022 and theassociated downturn in volumes, an adjustment to operating structures was unavoidable in addition to awide range of further measures. We mainly reduced
flexible resources at major production sites and scaled
back new hires to the absolute minimum. The significant reduction in personnel at the biggest production
sites in the Netherlands and Great Britain reflect the
pronounced downturn in demand at Flooring Systems.
Headcount in the Americas and Asia/Pacific regions remained approximately at the level of the previous year.

24

FORBO ANNUAL REPORT 2022 – 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, research,and 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 and­safety, alongside general ongoing preventive activities.
The health and safety of its employees in the workplace is of prime importance to Forbo and is the focus
of various local training programs aimed at reducing
and preventing accidents. A range of activities took
place during the reporting year with the aim of improving the health of employees and reducing health risks.
Among the subjects discussed were ergonomics in theworkplace and fitness, along with the promotion of related activities, and access to free medical check-ups.
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 train-

25

ing program for senior managers and persons in key
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 organiza­
tional levels. This is combined with appropriate tools
to aid communications and collaboration in international, culturally diverse teams.
Forbo works closely with universities in many countries – Flooring Systems engages mainly with students
of design and architecture, Movement Systems with
graduates of technology and chemistry faculties andof application-specific courses. Forbo cares about thetraining of young, motivated school leavers. A ­basic

principle applying to the promotion and recruitmentof trainees is that the apprenticeships offered by Forbo
are open to all applicants, irrespective of gender, andthe same requirements are placed on everybody.
During the reporting year, the company hosted­trainees in commercial occupations, logistics, mechatronics, electronics, and plastics technology. Anotherimportant task is to ensure continuity through thetransfer of know-how and experience assimilated over
the years by the older generation for the long-term
benefit of younger recruits.
DIVERSITY AND INCLUSIVITY
A binding commitment set out in the Code of Conduct is that Forbo does not tolerate any form of discrimination on the grounds of race, gender, belief, religion, background, disability, age, sexual orientation,
political opinion, or other characteristics.
As a future-oriented company, Forbo prefers to draw
on the wider diversity of the population as a resource
for the success of the company. Organizations that

26

FORBO ANNUAL REPORT 2022 – AT A GLANCE

take this approach are often more open to new ideas
and, thanks to the diversity of people they employ,
generally more flexible. Despite our complex technicalproduction processes and the physically demanding
work they entail, we do our best to take many aspects
of diversity into consideration. The lived experience ofdiversity and flexibility in working models also reinforces the attractiveness of a company for future employees and specialists from home and abroad.
At Forbo, in common with companies in many technical industries, female staff work mainly in finance, administration, human resources, marketing and purchasing. In Flooring Systems, roles in the design andsales departments are often occupied by women. It
is worth highlighting in this regard that two very
­successful Forbo plants are run by women.
Forbo is also strongly committed to the inclusion ofpeople with disabilities. We are working in a numberof countries with the relevant companies and institutions to promote their integration into the world ofwork and business.

Environmental dimension
Protection of the environment and the generation ofenvironmental added value are important factors in all
Forbo’s development and investment decisions. Our
customers also demand efficient and sustainableproducts and services. Both divisions are meetingthese demands by offering entirely natural products intheir product 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 offsetting) andmade from natural raw materials: linseed oil, n­ aturalresin, wood flour and powdered limestone, as well as
jute and pigments. A natural product through andthrough, which, in view of its long service life and­posi­tive environmental balance, is regarded as themost environmentally friendly resilient floor covering
available and is biodegradable. In addition to this,­linoleum is made from about 45% recycled material,
which ­
lowers the consumption of primary raw­materials accordingly.

27

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, which uses
100% renewable energy, this collection is a leading
performer among our textile products in terms of its
environmental footprint.
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 technicalmaterials have been largely substituted by materials
made from renewable, plant-based raw materials thatare biodegradable.
In January 2023, a new Ecofiber conveyor and processing belt was launched that saves primary raw mate­rials by using a tension member made of PET recyclate. Recycled polyester yarns are obtained from usedbeverage bottles, which are first separated by color,then thoroughly cleaned, and finally shredded once

28

FORBO ANNUAL REPORT 2022 – AT A GLANCE

the labels and caps have been removed. The flakes obtained in this process are washed again, melted down
and made into pellets, which can be used as the starting material for various types of yarn. The quality obtained is identical to that of primary materials, whilst
saving valuable resources. At the same time, the process uses far less energy and therefore cuts down on
CO2 emissions.
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. Movement Systems has
now launched new generations of these energy-­saving conveyor belts that are even more efficient. The
AmpMiserTM 2.0 conveyor belts display their advanta­
ges most clearly where goods are being continuously
conveyed and many belts are in use, for example atairports or in logistics and distribution centers. For thistype of application, energy savings of up to 50% areachieved for the overall systems.

Another of our aims is to continually improve the sustainability and efficiency of our own activities. We do
this by using less material and energy to realize equivalent or even better solutions. Both divisions are working constantly on optimizing production processes interms of water and energy consumption, reduction ofemissions, reuse of heat generated in the production
process, and the reduction and efficient recycling ofwaste material in order to reduce the burden on theenvironment. A wide range of certifications confirm
these efforts. At the same time, we are working on innovative ideas regarding the materials used in 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, the topic of sustainability
plays an important role in the decision-making process
for every stakeholder group. It is therefore importantfor Flooring Systems to differentiate itself from­its ­competitors with persuasive, easy-to-­understand29

arguments, including where sustainability is concerned. 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 last year to evaluate and implement a new afterburner filter technology for processing waste air fromrecirculation ovens. The new technology will graduallyreplace the existing installations in the coming years.
Further installations were made during the reportingyear. This innovation will enable CO2 emissions to be
reduced by around 1,200 tonnes per year.
The return programs for post-consumer waste materials (gate to recycle) in the Netherlands, France, GreatBritain, Sweden, and the USA generated returnamounts of 364 tonnes in the reporting year. The types
of waste taken back include floor coverings from de-molished buildings and material disposed of in renovation work, but also offcuts from new installations.
MOVEMENT 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 ongoingenergy-­saving measures, energy recovery is an important factor, i.e. the use of energy released in the downstream incineration plant for heating. In order to­reduce water consumption and avoid unnecessary
waste, Movement Systems is increasingly using closed
water circulation systems. Some of the wastewater canbe used in another production step in order to minimize water requirements. The reduction and productive reuse of waste material is increasingly the focus ofKaizen and sustainability initiatives. Cutoffs from thebelts we produce in certain countries are sold to othercompanies to be reused in their production. The locations in North America collect sanding dust in filters,

30

FORBO ANNUAL REPORT 2022 – AT A GLANCE

which is then processed by external partners as a material for use in their production. Some of the wastefrom plastic modular belts as well as polyurethane andpolyamide cutoffs from flat belts are 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 environmental considerations
was on 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 enabling substantial savings in kilowatt
hours. The refrigeration units also use an environmentally friendly propane-based coolant. The savings inprimary energy consumption reduce CO2 emissions byover 800 tonnes per year.

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.

31

In the year under review, we also constantly maintained our efforts
to ensure responsible conduct: we continued to strengthenawareness of a variety of compliance topics through e-learning
modules and systematically implemented risk management processes.
This enabled us to deepen understanding of the Code of Conduct,
competition law and anticorruption guidelines in refresher cour­ses for existing employees and training for new employees, with astronger 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 using social media with caution, as well as
the general subject of fraud. Phishing e-mails were simulated tofurther increase awareness.
The reporting year saw the introduction of an e-learning modulethat looked in detail at the topic of respectful behavior as outlinedin the Code of Conduct and raised employees’ awareness of subjects including discrimination, bullying, and sexual harassment in
the workplace.

32

33

ACTIVITYREPORT
Two divisions with leading market positions

34

Flooring Systems:
Noticeable slump in demand

36

Movement Systems:
Broad-based investments

42

34

FORBO ANNUAL REPORT 2022 – 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 marketplace 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, sustainability, digital­trans­formation, and a strong global brand, we are
creating global leadership positions in clearly
defined market segments.
– Thanks 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.

WELL-BEING.

EFFICIENCY.

FLOORINGSYSTEMSWELL-BEING

BEAUTIFULLYCOMFORTABLE.
Welcoming and stylish interiors are essential in thehospitality business. Our floor coverings lend every­
space individual appeal and enrich design concepts.
They ­enhance the guest experience thanks to theirsound-­absorbing, acoustic and hygienic characteristics.
Flotex combines the advantages of textile and elastic
floor c­ overings: extremely hard-wearing and easy-care,ideal for restaurants, but also offices, schools, and social
care facilities.

38

FORBO ANNUAL REPORT 2022 – ACTIVITY REPORTFLOORING SYSTEMS:NOTICEABLE SLUMP IN DEMAND‘The challenges we faced in the reporting
year were manifold and affected theGroup in different ways. In North America,
product availability was affected and depended on the complexity and reliabilityof international and local supply chains.
In the Asia/Pacific region, the ongoing
Covid lockdowns in China hindered
personal contact with customers and­caused more projects to be postponed.
Jean-Michel Wins
In Europe, the availability of raw materials Executive Vice President
was crucial to the ability of the various Flooring Systems
production plants to ensure productavailability and service levels. Added tothis, there was a slump in demand in thesecond half of the year that was more There was also a generally cautious approach to newsevere than expected and required major projects due to shortages of materials and the­­special measures to be taken. A notable significant rise in construction costs.
were able to pass on our much higher costs for
success was the branding campaign We
the manufacture of floor coverings via sales price in­­launched in the fall, which increases the creases, though after a delay in many cases. All threevisibility of our circular flooring solutions.’ ­regions recorded good overall sales growth in local
The Flooring Systems division generated net sales of
CHF 878.0 million in the 2022 business year (previous
year: CHF 851.8 million), corresponding to an increaseof 9.0% in local currencies and equating to a growth of
3.1% in the corporate currency, taking negative currency
effects into account. This increase is entirely due to sales
price increases. After a positive first half-year, demand­declined from late summer 2022, significantly so fromthe fourth quarter. The division accounted for 67.9% ofGroup sales in 2022. Operating profit (EBIT) reduced by
32.6% to CHF 88.4 million (previous year: CHF 131.2 million). This substantial downturn can be attributed inparticular to the fall in volumes and to one-time­impacts. The significantly higher cost of raw materials,
transport, energy, and personnel, and ­negative c­ urrency
effects were also factors. The EBIT margin declined by
5.3 percentage points to 10.1% (previous year: 15.4%).
Sales growth thanks to sales price increases
in all regions
The sharp fall in demand in the second half of 2022
was mainly caused by a shift away from renovation
projects to energy-saving projects due to the energy
crisis, which led to a significant slump in demand.

currencies; Asia/Pacific saw the highest effect, while
growth was almost in double-digit figures in the Americas as well, and Europe recording a similar outcome.
The sales picture in Europe was mixed, with catch-up
effects discernible in some places after the effects ofthe pandemic in previous years. Great Britain, France,
and Southern and Eastern Europe posted double-­
digit growth; other markets including Germany, the­Netherlands, Scandinavia and Switzerland recorded amoderate increase in sales.
The building and construction adhesives activity­reported pleasing sales growth.
In the Americas, projects in the healthcare and retailsectors in the key US market contributed most to sales,
while demand in the education sector reduced. In
Canada, a significant Covid catch-up effect was seen
with an above-average increase in both privately andpublicly funded projects in aged care. Brazil recorded
sales growth in double-digit figures.
The above-average sales increase in Asia/Pacific wasattributable to projects in the healthcare sector andthe electronics industry. Double-digit growth was­reported in Japan, South Korea, and Southeast Asia.
Australia also recorded healthy growth. In China, sales

39declined due to the ongoing lockdowns and associa­ted
stringent restrictions and corresponding challenges.
Innovative collections in all product groups
We have attractive, high-quality collections withunique selling propositions and a wide selection of­installing options in all our product lines.
In the linoleum business, we launched the newly­developed “TopshieldPro” surface coating for all collections in April. It provides improved protection against
scratches and wear. The new ‘marmoluem sport’­collection, on offer since September, meets the l­atest
standards for indoor sports floors and is available intwo thicknesses.
The vinyl business launched ‘sphera element and elite’and ‘eternal original and deluxe’, high-performance­homogeneous vinyl floorings, which are particularly
suitable for areas with heavy traffic. A loose-lay, slip-­
resistant collection, ‘surestep fast fit’, was developed
specially for the British market. In France, the new ‘sarlon
habitat’ loose-lay vinyl flooring is winning over the­important multi-family housing segment thanks to its
enhanced acoustic properties. All ‘allura’ collections
were completely revamped, with the luxury vinyl tiles
due for launch in March 2023.
In the textile business, the new ‘tessera’ carpet tile collections based on the latest microtufting technology
proved popular, with improved acoustic properties
from reclaimed yarns. An attractive Flotex range wasdeveloped specially for the hospitality and leisurecustomer segment, featuring innovative designs,­­including some created specifically for use in corridors.
Investment over recent years in state-of-the-art digitalprint technology for vinyl and Flotex floorings led tothe development of ‘created by’ collections in collaboration with local famous artists, who were able to­display their creativity and signature styles throughdigital printing. The Spanish artist José Median Galeoteand the award-winning architect and designer Mac
Stopa from Poland created a number of new and­distinctive designs.
Sales growth in all product groups
The product lines also reported various degrees ofsales growth in line with the overall trend. Most of theversatile and application-specific vinyl flooring collections, and conductive floorings in particular, reported
above-average results. Among the textile floor coverings, Flotex and carpet tiles recorded a pleasing­upswing, with a discernible catch-up effect seen in

Great Britain. Needle felt floor coverings and entrance
matting systems both saw moderate increases in sales.
Linoleum floorings generated modest sales growth.
Investments supporting an improved
circular economy
In addition to numerous initiatives to enhance theproduct portfolio, we also invested in upgrades at­various production sites. These invariably also involved
environmental improvements to optimize the circular
economy.
At the Flotex production location in Ripley/Great­Britain, a section of the plant was refurbished to enableoff-cuts from the vinyl production plant in Coevorden/
Netherlands to be used in the manufacture of toughwaterproof vinyl backing for Flotex floorings. At thesite in Reims/France, newly installed technology
makes it possible to feed recycled vinyl floor coverings
into the production process for acoustic vinyl floorings, increasing the recycling rate. The adoption of
new mist-filter technology at the vinyl floorings plantin Coevorden achieves significant reductions in gas
and CO2 emissions. In addition, a new line for the endstage of the lamination process for luxury vinyl tiles
was installed. At the linoleum plants, a number of elements of the production process were modernized,
including cutting lines and mixers, and productionlines for new collections and installing options werere­designed. The broad expanded production plant for
Flotex flooring in the USA is in the planning stages at
the moment and will become an important local
growth driver from end-2024.
2023 will also challenge us
The significant slump in demand in the second half of2022 will continue to present us with challenges in thefirst six months of 2023. We expect to see further­in­flation-related increases in costs, including personnel
costs. However, we have initiated measures to adapt
structures and improve profitability. These will have apositive effect.
The proximity to local markets and the challenges they
face is an important factor in our ability to respondswiftly and agilely to changes. We have an attractive
product portfolio and can now support and promote
our sales activities with well-established digital­channels.

40

FORBO ANNUAL REPORT 2022 – ACTIVITY REPORTCREATIVITY AND­TECHNOLOGY COMBINED
Forbo floor coverings fuse functionality
and high product quality with inno­
vative designs. They enhance interiors inaccordance with the needs of the users.
With every new development, we strive
to make our products and production
processes more sustainable and to meetthe highest functional demands. We
keep our finger on the pulse of technicalinnovation and design trends by maintaining an open dialogue with designers, architects, builders, and suppliers.

Our floor coverings are mostly designed for applications in the project business, which means that they
have to be very hard­-wearing. They are based on­proven, state-of-the-art production and digital printing
technologies and combine trendy designs, diverse­color palettes, innovative embossed structures, and arange of installation ­options using environmentallyfriendly materials. Diversely inspired, we developed attractive new products for a wide range of applicationsin the past year.
Leading in developing sustainable floor coverings
We worked diligently to create a branding campaignthat highlights our commitment to sustainability andthe circularity of our entire product portfolio. The­circular economy and users are central to product­development and design, in harmony with a high proportion of sustainable and renewable raw materials.
Since April 2022, the completely carbon-neutral linoleum floor coverings have been finished with the­developed surface coating "TopshieldPro". It increases
resistance and protection against scratches and disinfectants based on extensive tests with a new formula.

LINOLEUM WITH NEW "TOPSHIELD PRO" SURFACE COATING

LINOLEUM "MARMOLEUM SPORT"41

LUXURY VINYL TILES "ALLURA"

Launched in September 2022, the "marmoleum sport"
linoleum collection meets the latest standards for indoor sports flooring. It comes in two thicknesses andeleven fresh colors. Installed on a proper sports underlay, it mini­mizes the risk of injury.

‘ATTRACTIVE CIRCULAR­F LOORING SOLUTIONS’FLOTEX COLLECTION WITH DESIGNS FROM MAC STOPA

Digital printing enables creative designs
The new digital printers for vinyl and Flotex floor­coverings, installed in previous years, serve as the basis
for creative work. Under the designer label "created by",Flooring Systems is introducing new touches in collaboration with well-known artists who bring their signature style to these types of flooring with their unmistakable designs. Now, individual building areas can bestylishly and creatively designed to match their functionality. Spanish artist José Medina Galeote is known
for his ­abstract drawings evoking calligraphy. The designs of Mac Stopa, an award-winning architect anddesigner with Polish roots, are inspired by flowers,
wickerwork and trapezoidal shapes.
All-round revamped luxury vinyl tiles
The outcome of the intensive work on the completely­renewed "allura" collections, the luxury vinyl tiles, will
be available globally from March 2023. They bring­inspiring new designs, embossed structures, formats,sizes, and various covering heights and thicknesses
with ­different acoustic properties. They are available ina ­diverse range of installation options, such as "click"and "puzzle," alongside traditional glue-down.

MOVEMENTSYSTEMSEFFICIENCYSAFELY ON
THE MOVE.
Precision and efficiency in logistics and distribution
centers are increasingly important factors for success.
Our conveyor belts comfortably handle complex­processes and requirements, often running 24 hours
a day, 7 days a week, efficiently and reliably. They saveenergy and come in compact, space-saving layouts.
Our production processes, combinations of materials,
and assembly operations ensure that every belt has
the characteristics specified for each area of application. The AmpMiser™ 2.0, for example, achieves up to
50 percent savings in operating energy, enabling customers to significantly reduce their environmental
footprint.

44

FORBO ANNUAL REPORT 2022 – ACTIVITY REPORTMOVEMENT SYSTEMS:BROAD-BASED INVESTMENTS‘Given the varied ongoing diverse challenges, we look back on a relatively­positive reporting year. Continued Covid
lockdowns in China and reduced availability of raw materials and shipping­capacity placed demands on our operations and supply chain management.
Substantially higher costs of raw mate­rials, logistics, and energy required us torespond with price adjustments, espeMarc Deimling
cially in Europe. At the same time, we Executive Vice President
successfully launched the first belt types Movement Systems
for the new Fullsan product line and, in
addition to product innovations, inves­
ted selectively in a wide range of areas nounced, with Italy and Spain contributing the most.
including capacity expansion and new The Netherlands recorded a satisfying increase; how­technology.’
ever, Great Britain saw a slight decline in sales.
The Movement Systems division generated net sales of
CHF 415.2 million in the year under review (previous
year: CHF 402.2 million), corresponding to a year-onyear increase of 7.3% in local currencies and equating
to growth of 3.2% in the corporate currency, taking
negative currency effects into account. This increase isentirely due to sales price increases. Most markets­reported growing sales. The division accounted for
32.1% of Group sales in 2022. Operating profit (EBIT)
decreased slightly by 0.6% to CHF 54.0 million (previous
year: CHF 54.3 million), which was attributable to theincreased cost of raw materials, transport, and energy
as well as to negative currency effects. The EBIT margin­declined by 0.5 percentage points to 13.0% (previous
year: 13.5%).
Sales growth thanks to sales price increases
in all regions
All three regions contributed in roughly equal measure
to the growth in sales. In local currencies, sales increased
most substantially in Europe, with growth in the highsingle digits. It was slightly below that in Asia/Pacificand equally pleasing in the Americas.
Most of the European markets – the key German market
along with Switzerland, France, Scandinavia, and Eastern Europe – saw double-digit growth. Sales growth inSouthern Europe was good, although a bit less pro-In the Americas, the key US market generated pleasing
sales growth, as did Mexico. There was a double-digit
increase in Canada thanks to catch-up effects after
Covid. The newly established manufacturing site in Colombia has become well-established and is postinggratifying growth.
In Asia/Pacific, the sales picture was mixed. In the key
Chinese market, sales reduced due to the ongoing
lockdowns and associated wide-ranging operational
restrictions and challenges. Other bigger foreign subsidiaries including Japan, Australia, and India generated
pleasing sales growth. Thailand and Indonesia recorded
double-digit growth. Sales in South Korea was below
the previous year level.
Different trends in the customer segments
Levels of demand and general trends varied across themain customer segments. In some cases they were still
dependent on specific circumstances relating to recent
years. Double-digit sales increases were recorded in
sports treadmills, raw material processing and indust­rial
production. Some of these were attributable to an­increase in demand after the pandemic. Conveyor belts
for the wood, stone, insulation material, and gypsum
processing industries were in high demand as well as
for tires, cars, machine parts, and industrial roll-up
doors. Equally pleasing, albeit less strong, were the sales
increases in the food, paper and printing, and t­extile
segments. After some years of strong growth, the­logistics segment saw sales declining slightly, m­ ainly45­ ecause demand for new e-commerce centers had notbreturned to pre-pandemic levels.
Application-specific innovations
During the year under review, we launched application-specific innovations in all product lines for various
customer segments with particular requirements for
products and services.
Modules with a grid structure have been added to­Series 18 of the Prolink plastic modular belt. They areparticularly suitable for the food-processing industry
and for steep curves. With a high proportion of open
spaces, they guarantee excellent air circulation anddrainage.
The newly developed Fullsan product line introduced anumber of belt types with various surface structures foruse in the food industry. Depending on the propertiesof the belt, they are suitable for the meat, poultry, andfish industries, for vegetable, fruit and dough pre­paration, and for use in dairies and cheesemaking.
In the area of Transilon, an iron-gray logistics belt wasdeveloped for cross-belt sorters. The surface coating
has a ribbed, non-reflective structure, making it ideal
for applications involving the scanning of bar codes.
With the sustainable objective of saving primary raw
materials, a versatile conveyor belt was developedwith tension members made of recyclate from PET
bottles.
The Extremultus product line produced elastic belts forthe electronics industry. These are used in the production of semiconductors and the manufacture of­photovoltaic modules. They have optimum tracking
properties and are quick, easy, and safe to assembleon site.
A new Transtex processing belt was developed speciallyfor the tire industry, for use as a collecting belt after thesteam vulcanization process. The special Texglide™
coating ensures the tires remain properly positioned in
the center of the belt.
Broad-based investments
We invested in infrastructure, technology upgrades,
and capacity expansion at many of our manufacturing
and production sites, as well as in a wide range of­product developments.
At the production plant in Pinghu/China, an additional
production line for Transilon conveyor belts is to be installed. It will be able to operate in different production
modes. It was planned and built during 2022 and is due

to be assembled in spring 2023. It is expected to comeon-stream towards the end of the year.
To increase capacity for the manufacture of Prolink­plastic modular belts in Denmark, additional injection
molding machines were installed along with the re­l­evant specialist tools. They will also allow new module
series to be produced.
At the production location in Germany, the control
system for the mixing plant was replaced, and a­­dual-fuel burner that can operate on natural gas andheating oil was installed. In the nearby manufacturing
center in Garbsen, longitudinal cutting equipment was
upgraded and solar panels were installed.
At the Extremultus flat belt production plant in Switzerland, the control system for the coating machine andthe air extractor in the compounding area were up­
dated with state-of-the-art technology.
Storage capacity was increased at the European manufacturing center in Slovakia. A modern shelving system
was installed.
The main plant in the USA received a camera-based
product inspection system to make the quality control
process more efficient, and the control system for the­compounding machine was upgraded.
Situation-specific action required in 2023
In 2023, we will again be challenged to respond to thelimited availability of some raw materials and address
the rising costs of logistics, raw materials, and personnel
with sales price increases. The economic trend in­Europe is uncertain, but we do anticipate a recovery in
China. We must react locally and with agility to market
developments and fine-tune our sales and production
planning accordingly. Key projects for the year ahead
include bringing the new production line in China onstream, finalizing the planning of a new coating­machine in Japan, and adding further belt types to the
new Fullsan product line.

46

FORBO ANNUAL REPORT 2022 – ACTIVITY REPORTCUSTOM
DEVELOPMENTS
Wherever drive forces are being transmitted and automated production andconveying processes are runningsmoothly, Movement Systems is usually
not far away. Our solutions for a wide
range of configurations and demands innumerous industries are renowned forinnovation, precision, reliability, andcost-effectiveness. We draw on our
know-how to stand out as a competent
partner in developing industry-specificand individual solutions.
With our application know-how in a wide range of production and manufacturing processes, our customers
enjoy real benefits and are able to increase their efficiency. Inspired by these experiences, we developed
new products for various customer segments during
last year.

FULLSAN BELT WITH GLOSSY SURFACE COATING ...

Hygiene-sensitive applications for the foodindustry
The first high-quality belt grades of the new homogeneous Fullsan product line were launched in the reporting year. Their properties ensure the highest levelof hygiene for the food industry. They defy thermal andmechanical challenges, are easy to clean, and withstand cleaning chemicals. They are completely sealed,
which means they do not offer any entry points forcontamination by oil, grease, or moisture. High UVC
resistance enables regular disinfection with UVC irradiation. There are belt types with a matt surface for dry
and packaged foods such as fruits and vegetables, anda glossy surface with high cleanability for wet andmoist foods such as meat, fish, and cheese. Anothersurface with an inverted pyramid structure reduces
product contact area and improves product release,especially for dough and vegetable items.
The extended Prolink plastic modular belt Series 18 isa boon for the food-processing industry. Large bakeries
and processors of meat, fish, and seafood use it in the... AND WITH AN INVERTED PYRAMID STRUCTURE

47

PROLINK PLASTIC MODULAR BELT SERIES 18

TRANSILON BELT FOR LOGISTICS APPLICATIONS

return of trays, baking sheets, and product packaging
materials. It enables the conveyed product to bepushed off to the side without interference. Conveyed
products can also exceed the actual width of the belt.
With a surface permeability of 44 percent, it ensures
excellent air circulation and drainage. There is anotherspecial version for tight radius curves in the processing
line. This range can now be upgraded with additionalrubber-like "friction top" elements, attached to the topof the modules. This feature is particularly suitable forinclined transport, where it prevents boxes, trays, andother packaging materials from sliding down.

‘CONVEYOR PROPERTIES
OFFER ADDED VALUE’

Customized industrial applications
A new conveyor belt from the Transilon product grouphas been specially developed for use in cross-belt­sorters in logistics applications, where goods are fed
from several belt conveyors coming together at rightangles to the conveying direction. It boasts a low-noise
running side and an inverted pyramid surface structure.
Its iron-gray belt color and non-reflective properties
make it ideal for barcode scanning applications on
cross-belt sorters.
A new Extremultus elastic flat belt has been developed
for the electronics industry. It is designed and developed for the production of semiconductors and the
manufacture of photovoltaic modules. The structured
belt surface enables optimum grip and exact positioning of printed circuit boards and modules. The homogeneous belt design prevents dust formation and contamination of electronic components. The elastic
properties allow a simple joining technique, for fastand reliable on-site belt assembly

48

FORBO GESCHÄFTSBERICHT 2022 – AKTIVITÄTENBERICHT

49

ORGANIZATION
Executive BoardGroup structure
Board of Directors

50
52
54

50

FORBO ANNUAL REPORT 2022 – ORGANIZATIONEXECUTIVE BOARD

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

51

Michael Schumacher

Andreas Jaeger

Michael Schumacher, born in 1969, is a Swiss citizen.
He graduated in Materials Engineering from 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 from 2017 to 2018 as CEO ofSaint-Gobain Building Distribution Germany. From2019 to 2021, he held the position of CEO ­Saint-Gobain
Switzerland. He joined our company in September
2021 and took over as Chief Executive Officer andChairman of the Executive Board of the Forbo Groupas of October 2021. He left the company end of­November 2022.

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 a 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 GmbH,and 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 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

52

FORBO ANNUAL REPORT 2022 – 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. Within the framework of
the strategy, Forbo will continue thesuccessful trend of recent years tofurther strengthen its positions in the
global marketplace.

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 eye– Overall management of strategy ­development and involvement in realizing
key strategic projects– Management of relationships with key
accounts and business as well as with 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

53

BOD / HRNC / RC / AFC / SC

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

Executive Chairmanof the Board of Directors

SC Strategy Committee

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

54

FORBO ANNUAL REPORT 2022 – ORGANIZATIONBOARD OF DIRECTORS

Vincent Studer, Dr. Peter Altorfer, Dr. Eveline Saupper, This E. Schneider, Claudia Coninx-Kaczynski, Michael Pieper, Jens Fankhänel

55This E. Schneider
Executive Chairman

Michael Pieper

Vice Chairman and independent1) member
Owner of the Artemis Holding AG, Hergiswil
Chairman of the Management Board of Artemis Group, Hergiswil
Board of Directors of Franke Holding AG, Aarburg
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 Autoneum Holding AG, Winterthur
Member of the Board of Directors of Bergos AG, Zurich
Member of the Supervisory Board of Duravit AG, Hornberg, Germany
Member of the Board of Directors of Reppisch-Werke AG, Dietikon

Dr. Peter Altorfer

Vice Chairman, Lead Independent Director and independent1) member
Legal adviser at the law firm Wenger & Vieli AG, Zurich
Member of the Board of Directors of Schweizerische Cement-Industrie-Aktiengesellschaft, 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
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

Jens Fankhänel
Independent1) member

CEO Kardex Holding AG, Zurich

Dr. Eveline Saupper
Independent1) member

Member of the Board of Directors Clariant AG, Muttenz
Member of the Board of Directors Georg Fischer AG, Schaffhausen
Member of the Board of Directors Flughafen Zurich AG, Zurich
Member of the Board of Directors Staubli Holding AG, Pfaffikon
Member of the Board of Directors Tourismus Savognin Bivio Albula AG, Savognin
Foundation Board mandates

Vincent Studer
Independent1) member

Partner and member of the Board of Directors of the trust and auditing company 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’56

FORBO GESCHÄFTSBERICHT 2022 – AKTIVITÄTENBERICHT

57

THE FORBO
SHARE

58

FORBO ANNUAL REPORT 2022 – THE FORBO SHARETHE FORBO SHARE
On the stock markets, 2022 was characterized by dramatic price fluctuations and sharp falls in global stock­markets. The war in Ukraine had a direct impact on millions of people, the international security situation, andreliability of supply – especially in the energy markets. Inflation was already a cause for concern at the end of2021, but the consequences of the high rates, particularly in Europe and the USA, only became manifest during
the course of 2022.
The Swiss Performance Index (SPI) had fallen by almost 15 percent by the beginning of March but managed torecoup most of the lost ground by mid-April. A second slump subsequently led to a temporary deficit of around18 percent, before an upward trend was recorded in the second half of June. From a level of minus 12 percent
in mid-August, a third decline set in, hitting a low of around minus 22 percent at the end of September. In thelast three months of 2022, the SPI showed a recovery for the most part, and finally closing at 13,735 points –­corresponding to a fall of 16.5 percent year on year.
For once, the Forbo share price trended significantly below the SPI in 2022. Up to the beginning of March, it
performed more or less in line with the SPI, but it went on to lose a considerable amount of ground, closing theyear at CHF 1,088. For a number of years now, the performance of the Forbo share has been steady and above
average. Since 2005, the Forbo share has performed at a level considerably above that of the SPI – even before
taking dividends into account.

The Forbo share in comparison with the SPIForbo share
SPI
600%

2,250
1,900

380%

1,550
1,200

160%

850
500

– 60%

150
2006

2022

59

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

2022
number
1,485,000

2021
number
1,650,000

2020
number
1,650,000

2019
number
1,650,000

2018
number1,800,000

1,412,760
050,821
21,4191,424,870
150,62553,086
21,4191,579,235
049,346
21,4191,601,315
027,266
21,4191,601,718
150,000
26,863
21,419CHF
148,500

CHF
165,000

CHF
165,000

CHF
165,000

CHF
180,000

141,276
0
5,082
2,142

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

157,924
0
4,935
2,142

160,132
0
2,727
2,142

160,172
15,000
2,686
2,142

CHF
389
71.8
23.04)
1.24)
2.34)
32

CHF
339
91.6
25.0
1.25)
1.75)
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
1,922
1,020
1,088
2,854
1,515
1,616

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

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 (million)7)

High
Low
Year-end
High
Low
Year-end

1) Par value per share in 2022, 2021, 2020, 2019 and 2018: CHF 0.10.
2) Based on the weighted average of the number of shares as set out innote 11 ‘Earnings per share’ on page 124 of the financial report.
3) See note 11 ‘Earnings per share‘ on page 124 of the financial report.
4) Proposal of the Board of Directors to the 2023 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

62

FORBO ANNUAL REPORT 2022 – CORPORATE GOVERNANCE REPORTCORPORATEGOVERNANCEREPORTAt Forbo, the concept of corporate governance encompasses the entire set of­principles 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 ­Directive
on Information relating to Corporate Governance (‘DCG’) and the relevant publi­
cations 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 19. The operational structure of theGroup is shown in the organizational chart on page 53. 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 144 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, 2022, 4,327 shareholders were listed in the share register of Forbo Holding Ltd, or 404 (10.3%)
more than in the previous year. As of December 31, 2022, Forbo Holding Ltd knew of the following significant
shareholders with a holding of more than 3%:
31.12.2022
as a percentage
Michael Pieper1)
Forbo Holding Ltd2)UBS Fund Management (Switzerland) AG
Swisscanto Fondsleitung AG
Credit Suisse Funds AG

27.80
4.86
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 in­accordance 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 (FMIOFINMA).

63

Below is a summary of the current notified shareholdings published in the year under review:
On June 22, 2022, Forbo Holding Ltd reported that it had fallen below the 5% threshold limit and held 73,295
treasury shares directly and indirectly through Forbo Management SA, Baar, corresponding to 4.94% of the voting
rights.
On September 8, 2022, UBS Fund Management (Switzerland) AG reported that it had fallen below the 5%
threshold and held 73,753 shares, corresponding to 4.97% 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 Market­Participants � Significant Shareholders).
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, 2022, Forbo Holding Ltd had a fully paid-up share capital of CHF 148,500, divided into
1,485,000 listed registered shares, each with a par value of CHF 0.10. Of this amount:– 73.70% were registered in the name of 4,301 shareholders with voting rights– 21.86% were shares held by banks or SIX SIS AG pending registration of transfer– 4.45% 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 58 and 59. Further information on the rights of participation associated with
the Forbo share can be found on pages 74 and 75 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
the SIX Swiss Exchange or by another means. These shares will be definitively canceled. On the basis of this­authorization, 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 tradingline and placed 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. By December 31, 2021, a total of 75,790(4.59%) treasury shares had been bought back during the buyback ­scheme. A further 14,375 (0.87%) treasury
shares were bought back via the second trading line in the year under review prior to the termination of thebuyback ­program 2019 – 2022 on March 16, 2022. The Ordinary General Meeting of April 1, 2022, approved thecancelation of all 165,000 shares purchased under this share buyback program.

64

FORBO ANNUAL REPORT 2022 – CORPORATE GOVERNANCE REPORT

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 registered shares 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 11.21%, from the current level of CHF 148,500 to CHF 165,145.
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
The Ordinary General Meeting of Forbo Holding Ltd on April 1, 2022, decided, based on the audit report of a­licensed audit expert, to reduce the ordinary share capital of the company by CHF 16,500 from CHF 165,000 to
CHF 148,500 by canceling 165,000 shares with a par value of CHF 0.10 each. It was further resolved to amend the
Articles of Association accordingly. The capital reduction was effected, and the new share capital of CHF 148,500
was entered in the Commercial Register on June 21, 2022.
No changes to the capital of Forbo Holding Ltd were made in 2021 and 2020.
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 share­capital entered in the Commercial Register. Over and above this limit, nominees are only entered provided thename, address, and shareholding of those persons are disclosed for whose account the nominee holds a totalof 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 90 to 94 as well as on pages 134, 135, and 143 of this Annual Report.

65

Board of Directors
Members of the Board of Directors
The cut-off date for the following information is December 31, 2022.
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 53 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 VicePresident 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. Due to the change of CEO, he assumed the role of CEO of the Forbo Group on an interim basis
from December 2022 up to and including February 2023.

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 1986 and has been its owner and CEO
since 1989. Since 1986, he has been a member of the Board of Directors at Franke Holding AG and various subsidiaries of Artemis and Franke around the world. He is also a member of the Boards of Directors of Arbonia AG
in Arbon, Autoneum Holding AG in Winterthur, Bergos AG in Zurich, Reppisch-Werke AG in Dietikon, and a member of the Supervisory Board of Duravit AG in Hornberg, Germany. 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 an 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 consultant, specializing in bank and company law as well as estate planning. Peter­Altorfer sits on the Boards of Directors of several companies, including Schweizerische Cement-Industrie-Aktiengesellschaft in Rapperswil-Jona, Privatbank Bellerive AG in Zurich, Nomura Bank (Schweiz) AG in Zurich, H. Kracht’s
Erben AG in Zurich and further non-listed investment and real estate companies as well as charitable foundationsin 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’66

FORBO ANNUAL REPORT 2022 – 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). From2006 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 member ofthe Board of Directors of TX Group AG (formerly Tamedia AG), where in 2017 she was appointed Chairwoman of
the Pool of Majority Shareholders. She is a member of the Board of Directors of Swisscontent AG in Zurich as well
as of Awina AG in Zurich and sits on other Boards of Trustees. She has been a member of the Board of Directorsof Forbo Holding Ltd since April 2014.
Jens Fankhänel
Jens Fankhänel was born in 1965 and is a German citizen. He studied at the University of Chemnitz in Germany
and graduated in electronic engineering, specializing in automation technology and technical cybernetics. In
1994, he entered professional life at io-Consultants in Germany, first as a Project Manager and later as Director
and Business Unit Manager Consulting and Engineering. After eight years, he moved to Swisslog, where he wasManaging Director ANZAC from 2002 to 2005. He then worked for Dematic GmbH in Germany as CEO of its­Central European Hub from 2005 to 2008, at which point he returned to Swisslog Holding AG for just over three
years, holding the post of Managing Director WDS Central Europe. Since 2011, he has worked at Kardex Holding
AG in Switzerland, until the end of 2018 he was Head Kardex Remstar Division, and he has been CEO of Kardex
Holding AG since 2016. Jens Fankhänel has been a member of the Board of Directors of Forbo Holding AG sinceApril 2022. He was appointed CEO of the Forbo Group with effect from March 1, 2023, and will retire from theBoard of Directors accordingly at the next Ordinary General Meeting.
Dr. Eveline Saupper
Dr. Eveline Saupper was born in 1958 and is a Swiss citizen. She graduated in law from the University of St. Gallen
and went on to obtain her doctorate (Dr. iur.). She was admitted to the bar in Zurich and is also a qualified tax
expert. She began her career in 1983, working as a tax consultant at Peat Markwick Mitchell (now KPMG) in Zurich. From 1985 to 2017, she worked for Homburger AG in Zurich as an attorney and tax adviser, serving foraround twenty years of that period as a partner and for over two years as Of Counsel. She spent an interim year
in 1990 in Chicago as a lawyer with Baker & McKenzie. Since 2017, she has been running her own legal practice.
Dr. Eveline Saupper sits on the Boards of Directors of a number of companies, including Clariant AG in Muttenz,
Georg Fischer AG in Schaffhausen, Flughafen Zürich AG, Stäubli Holding AG in Pfäffikon, and Tourismus Savognin
Bivio Albula AG. She is also a member of several Boards of Trustees. She has been a member of the Board of Directors of Forbo Holding AG since April 2022.
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 at other companies
and foundations. He has been a member of the Board of Directors of Forbo Holding Ltd since April 2009.

67

Board of Directors of Forbo Holding Ltd
as per December 31, 2022
First elected
at OGM
Executive Chairman
THIS E. SCHNEIDER
Executive Director

AFC

HRNC

RC

2004

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
JENS FANKHÄNEL
Independent1) non-executive Director
DR. EVELINE SAUPER
Independent1) non-executive Director
VINCENT STUDER
Independent1) non-executive Director

V

2000
2005

SC

M

2014
2022

M

M

C

C

M

M
M

2022

M

2009

C

Secretary of the Board of Directors
NICOLE GRAF
Non-member

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

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

Changes to the Board of Directors
Dr. Eveline Saupper and Jens Fankhänel were newly elected to the Board of Directors at the General Meeting of
Forbo Holding Ltd of April 1, 2022. Dr. Reto Müller did not stand for re-election and accordingly stepped downfrom the Board of Directors as of this date. Jens Fankhänel will succeed Michael Schumacher as Chief Executive
Officer and Chairman of the Executive Board of the Forbo Group on March 1, 2023. Accordingly, he will not bestanding for re-election to the Board of Directors at the next Ordinary General Meeting.

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FORBO ANNUAL REPORT 2022 – CORPORATE GOVERNANCE REPORT

Statutory regulations governing the number of permissible activities
pursuant to Article 626 Paragraph 2 Clause 1 CO
(until December 31, 2022 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 and do 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 statutory provisions. A year is defined as the period between two Ordinary General Meetings. In accordance with the Organizational Regulations of Forbo Holding Ltd, members who have reached the 70th yearof 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 shownin the table on page 67.
Decisions are as a general rule taken by the full Board of Directors. The Board constitutes four standing committees from its own ranks – the Audit and Finance Committee (AFC), the Human Resources and Nomination Committee (HRNC), the Strategy Committee (SC), and the Remuneration Committee (RC) – to deal with clearly defined subject areas of overriding importance. These four committees have mainly advisory and control functions.
The members of the AFC, SC, and HRNC are elected by the Board of Directors on an annual basis and can bedismissed at any time. The members of 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 Board and 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 has an advisory andsupervisory function. In addition, the Executive Chairman represents the Board and the Forbo Group vis-à-vis the
public, the authorities, and the shareholders. The tasks of the Executive Chairman of the Board and the demarcationof responsibilities from those of the CEO are set out in the section ‘Areas of responsibility’ on pages 70 and 71.
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.

69

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 2022, the Board of Directors held
six meetings with members physically in attendance, as well as one telephone conference call. The meetingseach lasted a whole day, while the conference call took around one hour. Every Board member participated in
all the physical meetings.
The Executive Chairman may invite members of the Executive Board or other senior employees to attend Board
meetings for individual items. In the 2022 business year, members of the Executive Board and other senior employees participated in the physical 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 meeting held by conference call. External consultants may participate in the meetings of the Board of Directors, the AFC, SC, HRNC, or
RC only in exceptional circumstances to deal with particular items. In the 2022 business year, no external consultants
participated in the meetings of the Board of Directors. Participation by external consultants in meetings of the AFC,SC, HRNC, and RC are listed in the chapters on the AFC, SC, HRNC, and RC on pages 69, 70, as well as 82 to 84.
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 by special invitation.
The AFC convenes as often as business requires, but at least twice a year. In the 2022 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 65 and 66 of this Annual Report.

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FORBO ANNUAL REPORT 2022 – CORPORATE GOVERNANCE REPORT

Strategy Committee
The SC advises and provides support for the Board of Directors on basic questions of corporate strategy and thestrategic development of the company. It follows, supports, and reviews management preparation with regard to
the acquisition and disposal of companies and shareholdings for decision-making by the Board of Directors. The
SC reviews and makes recommendations on measures submitted by the management on aspects of environmental and social corporate governance. Finally, the SC helps the Board of Directors to fulfil its responsibilities
with regard to monitoring the implementation of strategy.
The SC convenes as often as business requires, but at least twice a year. In the 2022 business year, a one-day meeting and a telephone conference call of around two hours’ duration were held. All members of the SC were present
at both meetings. The members of the Executive Board and other senior employees participated in the one-day
meeting for the agenda items that affected them. Neither the external nor the internal auditors were present at
the meetings of the SC. No external consultants participated in any SC meetings.
The SC 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 functions in responsible
positions. The relevant information can be found on pages 65 and 66 of this Annual Report.
Human Resources and Nomination Committee
We refer to the explanations in the remuneration report on pages 82 and 83.
Remuneration Committee
We refer to the explanations in the remuneration report on pages 83 and 84.
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, SC, HRNC, andRC, 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 in full or in part to individual members of the Board or to third parties.

71

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
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 of Directors, 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 with theprovisions 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, HRNC, SC, and RC report at the Board of Directors meetings on the activities of theircommittees and express the opinions and recommendations of the AFC, SC, 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
the AFC, SC, HRNC, and RC meetings. The Executive Board reports to the AFC through the CFO in consultation with
the CEO; it reports to the HRNC, SC, and RC through the CEO.

72

FORBO ANNUAL REPORT 2022 – CORPORATE GOVERNANCE REPORTThe 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 2022 business year, elevenmeetings were held, with the meetings usually lasting half a day. In addition, the Executive Board also met for a
two-day strategy workshop during the 2022 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, SC, HRNC, and RC on pages 69 and 70, as well as 82 to 84.
The Board of Directors also fulfills its supervisory and monitoring obligations 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 2022, as
there 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.
The 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 always assessed in a first estimate at the end of May, and a second estimate is made 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 is administratively subordinated to the Executive Chairman of the Board of Directors, is functionally independent, andreports 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.

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In 2022, seven 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. Four companies in Forbo Flooring Systems and three companies in Forbo Movement Systems were audited in the course of
the internal 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 138 to 142 of theAnnual Report.
With regard to the risk management process, refer to the relevant explanations on pages 138 to 142 (note 23 ‘Risk
assessment and financial risk management’) of the Financial Report section of the Annual Report.

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FORBO ANNUAL REPORT 2022 – CORPORATE GOVERNANCE REPORT

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 51 of this Annual Report.
Statutory regulations governing the number of permissible activities
pursuant to Article 626 Paragraph 2 Clause 1 CO
(until December 31, 2022 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
Michael Schumacher, Chief Executive Officer and Chairman of the Executive Board of the Forbo Group, left thecompany on November 30, 2022. Jens Fankhänel, designated Chief Executive Officer of the Forbo Group, will succeed him on March 1, 2023. Meanwhile the role has been assumed by This E. Schneider on an interim basis.
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 79.

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 oldCO, shareholders who are unable to attend the General Meeting inperson 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.

75

Electronic 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 conducted electronically, 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 neither contain an ‘opting-up’ clause nor an ‘opting-out’ clausepursuant to Articles 135 respectively 125 of the Financial Market Infrastructure Act.
Clause on changes of control
As per year-end 2022, 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 General Meeting on a proposal by the Board of Directors. On April 1, 2022, Regula Tobler took on the role of Auditor in
Charge from Rolf Hauenstein, who had held the position 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.

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FORBO ANNUAL REPORT 2022 – CORPORATE GOVERNANCE REPORT

Additional fees
The additional consultancy fees that were invoiced by the auditing company amounted to CHF 0.1 million in 2022.
These fees were charged 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 advis­orycapacity. 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.

77Blackout 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 of Directors 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 as required.
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, andthe 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.

78

FORBO ANNUAL REPORT 2022 – CORPORATE GOVERNANCE REPORT

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 no other 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 10 of this Annual Report. Further information on the Forbo share is printed on pages 58 and 59 of this Annual Report.
Publications may be ordered by email or telephone:
Email communications@forbo.com
Phone + 41 58 787 25 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

79

REMUNERATIONREPORT

82

FORBO ANNUAL REPORT 2022 – 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 89 to 91. 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 2023 Ordinary General
Meeting:– Maximum total remuneration for the Board of Directors for 2024
– Maximum fixed remuneration for the Executive Board for 2024
– Short-term variable remuneration of the Executive Board for 2022 (bonus/short-term incentive)– Maximum total amount of the long-term participation for the Executive Board for 2023
(long-term incentive plan 2023 – 2025)
The total remuneration was approved by a large majority in a consultative vote on the 2021 remuneration reportat the Ordinary General Meeting of April 1, 2022 (agenda item 5.1). Participants in the 2023 Ordinary General
Meeting will also be invited to vote in a consultative ballot on the entire 2022 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 for both 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.

83

The Human Resources and Nomination Committee meets as often as business requires, but at least twice a year.
In the 2022 business year, the HRNC held five meetings with personal presence, each lasting a couple of hours.
No external consultants participated in these meetings.
The Human Resources and Nomination Committee consists of at least two members of the Board of Directors.
The Ordinary General Meeting of April 1, 2022, elected Dr. Peter Altorfer (Chair), Claudia Coninx-Kaczynski andMichael Pieper to the HRNC for the 2022 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 65 and 66 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 2022 business
year, the Remuneration Committee held four meetings with personal presence, 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, 2022, elected Dr. Peter Altorfer (Chair), Claudia Coninx-Kaczynski and Michael Pieper to theRemuneration Committee for the 2022 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 65 and 66 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.

84

FORBO ANNUAL REPORT 2022 – 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 2022
In the 2022 business year, 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).

85

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 89 and 90 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 167% 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.
As from the Long-Term Incentive Plan 2023 – 2025, the PSUs will be converted, after the three-year performance
period, into shares that are subject to a vesting period of one year. This was specified by the Remuneration­Committee in November 2022.
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

86

FORBO ANNUAL REPORT 2022 – 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 918,983 (previous year: CHF 470,000) 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 2022, less the reduced value as a result of locking
up the shares (tax value 2022: CHF 1,573.13 per share; previous year: CHF 1,285.62 per share). The share package
corresponds to annual compensation at fair value (excluding the reduction for the lockup period) of CHF 2,264,336(1,207 shares); previous year: CHF 2,263,103 (1,478 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 3,621,910 for the year
under review (previous year: CHF 3,182,103). 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 92 to 94 of this remuneration report.

87

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.

88

FORBO ANNUAL REPORT 2022 – 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 andfixed remuneration of Executive Board for the 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 the previous business year
(bonus/short-term incentive)
Approving maximum total amount of long-term
participation of Executive Board for the current businessyear (long-term incentive)
Decision period

2nd quarter3rd quarter

4th quarter

89

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% depends 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 (29%to 40% of the variable remuneration), EBIT of the Group and/or a division (40% to 54% of the variable remuneration), and net working capital of 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 145%. 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 115% of the fixed remuneration if targets are fully met. If the targets are exceeded, the variable remuneration may be as much as 167%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.

90

FORBO ANNUAL REPORT 2022 – 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. As from the long-term incentive
plan 2023 – 2025, they are subject to a vesting period of one year. They cannot be sold or pledged during this91

time. Immediately on termination of the plan participant’s employment contract, regardless of w
­ hether the plan
participant has terminated the contract or the company has terminated the contract with the plan 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. As from the long-term incentive plan 2023 – 2025, the relevant
shares are transferred after one year.
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 92 to 94 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.

92

FORBO ANNUAL REPORT 2022 – 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 918,633 in theyear under review (previous year: CHF 810,178). This sum consists of the base salary in cash (60% of the remu­
neration), amounting to CHF 465,327 (previous year: CHF 413,615) and the base remuneration in shares (40% of
the remuneration) of CHF 380,746 (previous year: CHF 335,136). This corresponds to 261 shares (previous year: 186
shares) at a market value of CHF 1,458.80 each (previous year: CHF 1,801.80). The portion paid in shares is derived
from a fixed remuneration amount. This total remuneration includes a lump sum for expenses plus employer­contributions 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 86 of
this remuneration report.
Remuneration of the Executive Board
The total remuneration paid to the members of the Executive Board came to CHF 2,964,710 in the year underreview (previous year: CHF 3,752,600), subject to approval of the variable portion by the 2023 Ordinary General
Meeting. This sum includes a fixed base salary of CHF 1,526,623 (previous year: 1,642,803) and short-term variablebonus remuneration (short-term incentive) of CHF 657,970 (previous year: CHF 1,292,254), a long-term participation (long-term incentive) of CHF 360,460 (previous year: CHF 343,921) plus the private use of the company
car, and employer contributions to the pension fund as well as other usual social insurances, which are reported
separately in the column ‘Other remuneration’.
The fixed portion of the base salary paid in shares (lockup period of five years) came to CHF 80,762 (previous
year: CHF 143,699). 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 498,714 (previous year: CHF 761,206), which is subject to approval by the 2023 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 636 future subscription rights in the form of performance share units were issued.

Plan2020 – 2022
2021 – 2023
2022 – 2024

Allocationof subscription rights
April 2020
April 2021
April 2022

Performance
period2020 – 2022
2021 – 2023
2022 – 2024

Vesting
date (PSUs)
April 2023
April 2024
April 2025

Unlockingof shares
April 2026
April 2027
April 2028

Numberof PSUs
allocated
216
222
198

Value of PSUs
in CHF(allocation)
356,345
343,921360,460

93

Disclosure of remuneration of the Board of Directors and Executive Board
Remuneration
For the year 20221)(audited)

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

918,983

1,207

2,264,336

438,591

3,621,910

Michael Pieper,
Vice Chairman

79,88445

65,646

12,231

157,761

Dr. Peter Altorfer,
Vice Chairman and Lead
Independent Director

103,96258

84,61015,016

203,588

Claudia Coninx-Kaczynski,
member

71,00840

58,352

13,676

143,036

Jens Fankhänel, member6)
Dr. Reto Müller, member6)
Dr. Eveline Saupper,
member6)

53,256
17,75253,25630
1030

43,764
14,58843,764

10,2572,797
9,842

107,277
35,137
106,862

86,2091,384,310
1,445,861
600,000

48
1,468
62
0

70,022
2,645,082
80,762
0

8,741
511,151
419,657
173,739

164,972
4,540,543
2,964,710
1,098,964

159,256
71,250

432
220

CHF

498,714
253,975

Number

198
0

CHF

Total

This E. Schneider,
Chairman5)

Vincent Studer, member
Board of Directors total7)
Executive Board8)9) total
Of whom highest-paid
member of Executive Board(Michael Schumacher)

NumberOther
remuneration4)

360,46001) 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 2022 and will be submitted to the April 2023 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 1,154.34. 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 2022 (long-term incentive plan 2022 –2024) 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 86 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 2022 remuneration of the following individuals was paid pro rata temporis: Dr. Reto Müller until the 2022 Ordinary General Meeting (3months); Jens Fankhänel and Dr. Eveline Saupper from the 2022 Ordinary General Meeting (9 months).
7) 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 1,458.80. The allocation is made at the discounted
tax value of CHF 1,224.80. The shares are locked up for a period of three years and are reported at market value in the table above.
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 1,861.14 for 2022
and for 2023 CHF 1,154.34.
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 2022 business year will be allocatedin April 2023, subject to approval by the 2023 Ordinary General Meeting. The shares are locked up for a period of three years. The value atallocation was CHF 1,154.34. Foreign members of the Executive Board may acquire stock awards instead of shares. The stock in question willbe transferred after three years.

94

FORBO ANNUAL REPORT 2022 – REMUNERATION REPORT

Remuneration
For the year 20211)(audited)

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 86 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.

95

Advances and loans (audited)
As of December 31, 2022, 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 959c OR(663c oldOR)
2022 business year
As at December 31, 2022, 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 2022
(audited)
Name and function

Numberof 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
Jens Fankhänel, independent1) member
Dr. Eveline Saupper, 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

39,914
413,832
1,511
429
210
280
1,106
457,282
0
175
111
534
820

1) Independent as defined in the ‘Swiss code of best practice forcorporate governance’96

FORBO ANNUAL REPORT 2022 – REMUNERATION REPORTAs 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
(audited)
Name and function

Numberof 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’

97

Report of the statutory auditor

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

Report on the Audit of the Remuneration Report
OpinionWe have audited the Remuneration Report of Forbo Holding Ltd (the Company) for the year ended 31 December
2022. The audit was limited to the information on remuneration, loans and advances pursuant to Art. 14-16 of theOrdinance against Excessive Remuneration in Listed Companies Limited by Shares (Verordnung gegenübermässige Vergütungen bei börsenkotierten Aktiengesellschaften, VegüV) in the tables marked “audited” onpages 93 to 96 of the Remuneration Report.
In our opinion, the information on remuneration, loans and advances in the attached Remuneration Reportcomplies with Swiss law and Art. 14-16 VegüV.
Basis for Opinion
We conducted our audit in accordance with Swiss law and Swiss Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further described in the “Auditor’s Responsibilities for the Auditof the Remuneration Report” section of our report. We are independent of the Company in accordance with theprovisions of Swiss law and the requirements of the Swiss audit profession, and we have fulfilled our other ethicalresponsibilities 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.
Other Information
The Board of Directors is responsible for the other information. The other information comprises the information
included in the annual report, but does not include the tables marked “audited” in the Remuneration Report, theconsolidated financial statements, the financial statements and our auditor’s reports thereon.
Our opinion on the Remuneration Report does not cover the other information and we do not express any form ofassurance conclusion thereon.

98

FORBO ANNUAL REPORT 2022 – REMUNERATION REPORT

Report of the statutory auditor

In connection with our audit of the Remuneration Report, our responsibility is to read the other information and, in
doing so, consider whether the other information is materially inconsistent with the audited financial information in
the Remuneration Report 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 this otherinformation, we are required to report that fact. We have nothing to report in this regard.
Board of Directors' Responsibilities for the Remuneration Report
The Board of Directors is responsible for the preparation of a Remuneration Report in accordance with the provisions of Swiss law and the Company's articles of incorporation, and for such internal control as the Board of
Directors determines is necessary to enable the preparation of a Remuneration Report that is free from material
misstatement, whether due to fraud or error. The Board of Directors is also responsible for designing the remuneration system and defining individual remuneration packages.
Auditor’s Responsibilities for the Audit of the Remuneration Report
Our objectives are to obtain reasonable assurance about whether the information on remuneration, loans andadvances pursuant to Art. 14-16 VegüV is free from material misstatement, whether due to fraud or error, and toissue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is nota guarantee that an audit conducted in accordance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually orin the aggregate, they could reasonably be expected to influence the economic decisions of users taken on thebasis of this Remuneration Report.
As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgment and maintainprofessional scepticism throughout the audit. We also:− Identify and assess the risks of material misstatement in the Remuneration Report, 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 are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theCompany’s internal control.
− Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates andrelated disclosures made.

99

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 to communicate with them all relationships and othermatters that may reasonably be thought to bear on our independence, and where applicable, actions taken toeliminate threats or safeguards applied.

KPMG AG{{Signatureleft}}
Regula Tobler
Licensed Audit Expert
Auditor in Charge

Zurich, 1. March 2023
Enclosure:- Remuneration Report{{Signatureright}}
André Stampfli
Licensed Audit Expert

100

FINANCIAL REPORT
Forbo Group financial report
101
Consolidated balance sheet
102
Consolidated income statement
103
Consolidated comprehensive income statement 104
Consolidated statement of changes in equity
105
Consolidated cash flow statement
106
Notes – accounting principles
107
Notes117
Group companies
144
Report of the statutory auditor
148
Consolidated balance sheets 2018 – 2022
152
Consolidated income statements 2018 – 2022
153
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

155
156
157
158
161
162

102 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheet

AssetsCHF mCurrent assets
Cash and cash equivalents
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.

31.12.2022

31.12.2021

571.6
46.7
155.2
39.2
14.3
316.2
388.6
1.8
34.3
267.6
84.9
960.2

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

291.6
39.0
102.5
29.9
21.2
76.2
22.8
118.5
26.6
8.2
42.7
41.0
410.1
550.1
0.1
– 0.0
550.0
960.2

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

Note

22
12

13
22
10
14/21
15

Note

22
22

16
17
22
10
17
18

20
20

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 103

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
CHF
Basic earnings per share
Diluted earnings per share

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

2022

2021

1,293.2– 852.4
440.8– 15.6– 178.6– 94.2– 27.7
7.9
132.6
0.9
– 2.5
131.0
– 29.6101.4
101.4

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
141.2

71.76
71.76

91.63
91.62

Note

5

6

7
8

10

Note

11
11

104 FORBO ANNUAL REPORT 2022 – 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.

2022

2021

101.4

141.2

19.2

16.8

– 36.3– 17.1
84.3
84.3– 11.6
5.2
146.4
146.4

Note

10

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 105

Consolidated statementof changes in equity
2022

CHF m
January 1, 2022
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, 2022

SharecapitalTreasuryshares0.2– 0.1

Reserves

– 0.1

0.1

0.1

– 0.0

882.7
101.4
19.2
120.6
4.7
– 25.4– 35.3947.3

Share
capitalTreasurysharesReserves

0.2

– 0.1

Translationdifferences– 361.0– 36.3– 36.3– 397.3

Translationdifferences

Total

521.8
101.4
– 17.1
84.3
4.7– 25.4– 35.3
550.1

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

0.0
0.2

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

– 0.1

1,032.8
141.2
16.8
158.0
4.4
– 281.1– 31.4882.7– 349.4– 11.6– 11.6– 361.0

Total

683.5
141.2
5.2
146.4
4.4
– 281.1– 31.4521.8

106 FORBO ANNUAL REPORT 2022 – 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 and impairment of property, plant, and equipment andright-of-use assets
Amortization and impairment of intangible assets
Share-based payments
Income tax paid
Increase/Decrease (–) in provisions and employee benefit obligations
Increase in trade receivables
Increase in inventories
Decrease(–)/Increase in trade payables
Increase (–)/Decrease in other net working capital
Net cash flow from operating activities
Cash flow from investing activities
CHF m
Purchase of non-current assets
Interest received
Net cash flow from investing activities
Cash flow from financing activities
CHF m
Payment of lease liabilities
Decrease (–)/Increase of 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
Total cash and cash equivalents at beginning of year
Decrease in cash and cash equivalents
Translation differences on cash and cash equivalents
Total cash and cash equivalents at year-end

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

2022

2021

101.4
29.6
1.6
55.7

141.2
40.0
– 2.2
51.9

5.1
4.7
– 36.5
3.5– 10.0– 65.8
– 3.9
– 4.8
80.6

4.8
4.4
– 36.4– 9.2– 16.1– 47.9
20.2
15.8
166.5

– 30.90.8– 30.1– 38.80.4– 38.4– 18.4– 11.7– 1.0– 27.5– 35.3– 93.9– 17.736.2– 0.8– 276.5– 31.4– 290.2

93.3– 43.4
– 3.2
46.7

255.8
– 162.1
– 0.4
93.3

Note

10
14
15
9

Note

Note

21
22
21

Note

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 107

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 1, 2023, and released for
publication on March 2, 2023. This financial report issubject to approval by the Ordinary General Meetingof March 30, 2023.

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– non-monetary balance sheet items of subsidiaries
in hyperinflationary economies that are adjusted tothe current price index– pension fund liabilities measured at the net valueof the discounted defined benefit obligations lessthe fair value 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 recognizedprospectively. 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.
Goodwill is the excess of the consideration of the business combination and the amount of the non-controlling interest over the identifiable net assets assessedat fair value.
Inter-company transactions, balances, and unrealized
gains or losses on transactions between Group companies are eliminated.

108 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

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-acquisitionchanges in reserves is recognized in reserves. The cumulative post-acquisition movements are offset
against the carrying amount of the investment. When
the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does notrecognize further losses, unless it has incurred obligations or made payments on behalf of the associate.
Changes in the scope of consolidation
In the reporting period, the two sales companies Tema
S.r.l. and Realbelt GmbH in the Movement Systems
segment were absorbed by their respective parent
companies Forbo Siegling Italia S.p.A. and Forbo Siegling GmbH for the purpose of simplifying the Groupstructure.
The subsidiaries included in the group of consolidated
companies are listed under ‘Group companies’ (frompage 142 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 2022 – CONSOLIDATED FINANCIAL STATEMENTS 109

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

Hyperinflation
In the current reporting year, Turkey is considered a
hyperinflationary economy in accordance with thecriteria of IAS 29 “Financial Reporting in Hyperinflationary Economies”. The effect of the application ofthis standard on the opening balances as at January 1,
2022 has been recognized in translation differences inother comprehensive income. In accordance with thestandard, the figures for the previous year have notbeen adjusted.

1
1
1
100
100
100

Balance sheet(year-end exchange rates)

2022

2021

2022

2021

1.00400.9543
1.17720.726714.1860
9.43661.08110.9141
1.25730.832414.1684
10.65430.9841
0.9234
1.11230.696013.2600
8.81861.03430.91401.23370.794214.3418
10.1041

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.

The non-monetary items have been indexed to theconsumer price index (CPI) at the end of the reporting
period. Income statement items have also been
indexed in order to reflect purchasing power in theyear under review. The adjustment (+ 64%) was
calculated on the basis of the CPI published by theTurkish Statistical Institute. In this context, a profit of
CHF 1.3 million resulted during the reporting year,
which has been recorded in the income statement.
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.

110 FORBO ANNUAL REPORT 2022 – 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 2022 – CONSOLIDATED FINANCIAL STATEMENTS 111

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 tangible assets areaccounted at cost on acquisition less depreciation andimpairments incurred with the exception of assets inconstruction which are not written down during the
project phase but only when they are ready for theirintended use and have been reclassified in the relevant category of tangible asset.
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 years
IT hardware
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:
IT 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.

112 FORBO ANNUAL REPORT 2022 – 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 2022 – CONSOLIDATED FINANCIAL STATEMENTS 113

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; buildings and vehicles 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.

114 FORBO ANNUAL REPORT 2022 – 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’.

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 115

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’.
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 amended
accounting standards
Applied new and amended standards andinterpretations
The following relevant amended standards and interpretations of the International Accounting Standards
Board (IASB) were applied for the first time in the­business year that began on January 1, 2022:– Amendment to IAS 16 ‘Property, Plant andEquipment: Proceeds before Intended Use’
– Amendment to IAS 37 ‘Onerous Contracts – Cost of
Fulfilling a Contract’– Amendment to IFRS 3 ‘Reference to the Conceptual
Framework’– Annual Improvements to IFRS Standards 2018 – 2020
The first-time adoption of the above-mentioned
amended standards and interpretations had no appreciable impact on the consolidated financial statements
presented here.

116 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

Introduction of new and amended standards
in 2023 and beyond
The IASB has not issued any new standards that are relevant for the Group. The following amended standards
and interpretations that were published by end 2022
but are not yet mandatory were not applied in advancein the present consolidated financial statements.

Standards*

Date effective

Plannedapplication

Revisions and amendments of standards and interpretations
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 froma Single Transaction’

*
*
*
*

January 1, 2024
January 1, 2023
January 1, 2023
January 1, 2023

2024 business year
2023 business year
2023 business year
2023 business year

Amendments to IFRS 16 ‘Lease Liability in a Sale and Leaseback Transaction’*January 1, 2024

2024 business year

No significant impact on the consolidated financial statements is expected.

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 117

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 andconstruction 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:
2022
CHF m
Total sales
Inter-segment sales
Net sales to third parties
Operating profit (EBIT)
EBITDA1)
Operating assets
Capital expenditure2)
Number of employees (December 31)

Flooring
Systems
878.0
0.0
878.0
88.4
127.3
517.7
17.9
2,890

Movement
Systems
415.3
– 0.1
415.2
54.0
75.4
337.4
13.0
2,460

Corporate/
Elimination
– 0.1
0.1
0.0
– 9.8
– 9.3
24.1
0.0
40

Total
1,293.2
0.0
1,293.2
132.6
193.4
879.2
30.9
5,390

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

The one-time charges of CHF 20.0 million recorded for
impairments in Russia, above all on goodwill and property, plant and equipment, costs for structural adjust-ments, and for other costs, including those from provisions for various legal claims, were mainly incurred byFlooring Systems in the year under review.

Segment information on the reportable segments forthe prior year:
2021
CHF m
Total 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)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
– 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

118 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

The internal management reporting is based on thesame accounting principles as the 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:
2022

2021

132.6
– 1.6
131.0

179.0
2.2
181.2

31.12.2022

31.12.2021

879.2
81.0
960.2

850.7
130.9
981.6

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’, ‘Intangible
assets and goodwill’ and ‘Non-current financial assets’.
Non-operating assets i­nclude ‘Cash and cash equivalents’ 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

2022
Third-party
sales

2021
Third-party
sales

2022
Third-party
sales

2021
Third-party
sales

657.5
140.6
79.9
878.0

651.6
123.9
76.3
851.8

166.6
142.4
106.2
415.2

162.9
130.4
108.9
402.2

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 119

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

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

2022
Third-party sales

2021
Third-party sales

31.1
155.0
154.2
122.5
96.0
79.7
185.6
824.1
228.8
54.2
283.0
186.1
1,293.2

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

31.12.2022
Operating assets

31.12.2021
Operating assets

35.4
73.4
97.2
221.8
38.5
89.3
49.8
605.4
124.7
28.7
153.4
120.4
879.2

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

In the period under review, sales to no single customer
exceeded 10% of total Group sales.
Operating assets are distributed over the following regions:

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

120 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

6 Development costs‘Development costs’, which mainly comprise productdevelopment, amounted to CHF 15.6 million in the reporting year (2021: CHF 15.9 million).

7 Other operating expenses‘Other operating expenses’ comprise expenses of different kinds in connection with guarantee and legal
costs, impairments in Russia on goodwill, property,
plant, and equipment and inventories, warranties, taxes on capital, levies based on local legislation, and allowances for doubtful trade receivables.

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

8 Other operating income‘Other operating income’ comprises a range of income,as the release of provisions arising from legal proceedings (in the previous year owing to settled obligations
related to the sale of industrial adhesives), income fromassociated companies, 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

Despite lower exchange rates, personnel expense increased year-on-year owing to the higher average
headcount, higher salaries and costs for structural
measures.
Salaries and wages include share-based payment­expenses of CHF 4.7 million (2021: CHF 4.4 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’).

2022

2021

306.9
64.1
12.5
5.1
388.6

301.7
59.7
13.8
5.8
381.0

As at December 31, 2022, the headcount was 5,390(2021: 5,532). The weighted average headcount over
the year was 5,637 (2021: 5,508).

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 121

10 Income taxes

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

2022

2021

33.2
– 3.6
29.6

35.8
4.2
40.0

2022

2021

131.0
– 31.023.7%

181.2– 43.1
23.8%

– 1.0
0.4
0.1
0.8
1.1
– 29.6
22.6%

– 0.7
0.8
0.4
0.6
2.0
– 40.022.1%

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

122 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

Capitalized and non-capitalized tax loss carry-forwards, by expiry date:
2022
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

20.7
20.7

32.8
32.8

53.5
53.5

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

2021
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, netthat 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:

31.12.2022

31.12.2021

34.3
– 8.2
26.1

37.4
– 9.8
27.6

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 123

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

CHF mJanuary 1, 2021
Changes recognized in income statement
Changes recognized in other comprehensive income
Translation differences
As at December 31, 2021
Changes recognized in income statement
Changes recognized in other comprehensive income
Translation differences
As at December 31, 2022
Netting with deferred tax liabilities
As at December 31, 2022

Inventories
7.7
– 0.5

Property,plant, andequipment
2.4
0.0

Provisions
12.8
– 4.3

Loss carryforwards
11.9
0.5

0.0
7.2
1.0

– 0.2
2.2
2.3

0.0
8.5
2.4

– 0.1
12.3
– 1.1

0.1
8.3

0.0
4.5

– 0.5
10.4

– 1.0
10.2

Employeebenefit obligations
16.6
1.3
– 3.8
– 0.6
13.5
0.0
– 5.7
– 0.8
7.0

8.3

4.5

10.4

10.2

7.0

Inventories
2.8
0.7
– 0.1
3.4
0.1
– 0.3
3.2

Property,plant, andequipment
5.5
1.5
– 0.2
6.8
– 0.1
– 0.7
6.0

3.2

6.0

Other
5.6
0.7
– 0.1
6.2
– 0.1
0.1
6.2
6.2

Total
57.0
– 2.3
– 3.8
– 1.0
49.9
4.5
– 5.7
– 2.1
46.6
– 12.3
34.3

Deferred tax liabilities

CHF mJanuary 1, 2021
Changes recognized in income statement
Translation differences
As at December 31, 2021
Changes recognized in income statement
Translation differences
As at December 31, 2022
Netting with deferred tax assets
As at December 31, 2022

0.0
0.1

Intangible
assets
8.8
– 0.4
0.3
8.7
– 1.4
– 1.3
6.0

0.1

6.0

Provisions
0.1
0.0
0.0
0.1

Decrease in net deferred tax assets 2021
Decrease in net deferred tax assets 2022

As at December 31, 2022, 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

Other
3.3
0.1
– 0.1
3.3
2.3
– 0.4
5.2

0.0

5.2

0.0

Total
20.5
1.9
– 0.1
22.3
0.9
– 2.7
20.5
– 12.3
8.2
– 8.9
– 1.5

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

124 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

Tax expense and income recognized directly in theother comprehensive income statement:
2022
CHF m
Actuarial gains 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.

2021

Before tax

Tax expense

After tax

Before tax

Tax expense

After tax

24.9
– 36.3– 11.4– 5.7

19.2– 36.3– 17.1

20.6– 11.6
9.0

– 3.8

16.8
– 11.6
5.2

– 5.7

– 3.8

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
Amount 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

2022
101.4
1,413,578
22
1,413,600
71.76
71.76

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

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 125

12 Trade receivables

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

31.12.2022

31.12.2021

146.8
13.3
– 4.9
155.2

145.4
12.8
– 4.8
153.4

31.12.2022

31.12.2021

74.3
93.7
182.0
– 33.8
316.2

63.5
78.1
154.3
– 33.0262.9

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
Allowance
Total inventories

The increase in inventories is due to significantly higher acquisition and manufacturing costs as well as anincreased safety reserve stock of raw materials.
Cost of materials recognized in the reporting year
came to CHF 578.7 million (2021: CHF 528.7 million).

126 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

14 Property, plant, and equipment

Cost on acquisition
CHF m
As at January 1, 2021
Additions
Disposals
Transfers
Translation differences
As at December 31, 2021
Additions
Disposals
Transfers
Translation differences
As at December 31, 2022

Land andbuildings

Machineryandequipment

Vehicles andotherproperty,plant, andequipment

184.0
14.4
– 4.2
1.5
– 8.1
187.6
8.5
– 1.9
1.0
– 18.1
177.1

728.0
11.0
– 4.0
17.6
– 20.6732.0
9.8– 10.324.2– 40.0
715.7

137.2
7.1
– 5.3
1.4
– 4.5
135.9
7.6
– 8.0
2.0
– 6.8
130.7

Land andbuildings

Machineryandequipment

Vehicles andotherproperty,plant, andequipment

45.8
16.3
– 4.2
– 6.4
51.5
15.9
2.2
– 1.8
– 11.0
56.8

610.6
26.1
– 4.0
– 18.6
614.1
26.4
2.0
– 10.2– 33.6
598.7

119.0
9.5
– 4.9
– 4.0
119.6
8.9
0.3
– 8.0
– 5.9
114.9

0.0

0.0

775.4
51.9
– 13.1– 29.0
785.2
51.2
4.5
– 20.0– 50.5
770.4

138.2
136.1
120.3

117.4
117.9
117.0

18.2
16.3
15.8

21.9
24.5
14.5

295.7
294.8
267.6

Accumulated depreciation and impairments
CHF m
As at January 1, 2021
Depreciation
Disposals
Translation differences
As at December 31, 2021
Depreciation
Impairments
Disposals
Translation differences
As at December 31, 2022
Net carrying amountAs at January 1, 2021
As at December 31, 2021
As at December 31, 2022

Property, plant, and equipment is recognized at amortized cost. In the year under review, allowances of CHF
4.5 million were set aside for impairments relating toproperty, plant, and equipment in Russia.
Included under property, plant, and equipment areright-of-use assets amounting to CHF 42.5 million(2021: CHF 47.3 million). Further information can befound in note 21 ‘Leasing’.
Maintenance and repair costs amounted to CHF 24.8
million (2021: CHF 25.5 million). The depreciation expense of CHF 51.2 million (2021: CHF 51.9 million) is

included in the items ‘Cost of goods sold’, ‘Devel­
opment costs’, ‘Marketing and distribution costs’, and­‘Administrative costs’.
As at December 31, 2022, there were no assets forwhich interest on borrowed capital was capitalized
during the preparation phase.
As at December 31, 2022, the Group had outstanding
purchase orders for capital goods amounting to CHF
5.3 million (2021: CHF 4.8 million).

Assetsunderconstruction

21.9
23.7
– 20.5
– 0.6
24.5
18.3

Total
property,plant, andequipment

1,071.1
56.2– 13.5– 33.81,080.0
44.2– 20.2– 27.2– 1.1
14.5– 66.01,038.0

Assetsunderconstruction

Total
property,plant, andequipment

0.0

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 127

15 Intangible assets and goodwill

Cost on acquisition
CHF m
As at January 1, 2021
Additions
Disposals
Translation differences
As at December 31, 2021
Additions
Disposals
Translation differences
As at December 31, 2022

Accumulated amortization and impairments
CHF m
As at January 1, 2021
Amortization
Disposals
Translation differences
As at December 31, 2021
Amortization
Impairments
Disposals
Translation differences
As at December 31, 2022
Net carrying amountAs at January 1, 2021
As at December 31, 2021
As at December 31, 2022

Otherintangible assets

Total

– 0.7
31.9

78.0
0.4
– 0.1
1.2
79.5
0.2
– 0.6
– 6.3
72.8

193.6
0.4
– 0.1
– 0.4
193.5
0.2
– 0.6
– 10.2182.9

Goodwill

Trademarks

Otherintangible assets

8.8

26.3

– 0.3
8.5

0.0
26.3

Goodwill

Trademarks

83.1

32.5

– 1.7
81.4

0.1
32.6

– 3.2
78.2

57.7
4.8
– 0.1
0.7
63.1
4.0

Total

– 0.4
9.2

– 0.0
26.3

– 0.6
– 4.0
62.5

92.8
4.8
– 0.1
0.4
97.9
4.0
1.1
– 0.6
– 4.4
98.0

74.3
72.9
69.0

6.2
6.3
5.6

20.3
16.4
10.3

100.8
95.6
84.9

31.12.2022
65.3
3.7
69.0

31.12.2021
69.2
3.7
72.9

1.1

The position ‘Trademarks’ consists 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

128 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

The goodwill in Flooring Systems comprises the goodwill acquired in connection with the acqui­sition of
Bonar Floors. The annual impairment test of this goodwill yielded a value in use that was greater than the
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 19%(2021: 20%) for Flooring Systems and around 19%(2021: 19%) 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 9.4% (previous year: 9.3%). The intangible assets with an indefinite
useful life were subject to impairment testing also in
the form of sensitivity analyses (WACC).
Goodwill of CHF 1.1 million arising from the acquisition of the Russian vinyl plant in Kaluga was written off
in full because of the negative business outlook resulting from the political and economic situation in Russia.
In previous years, this goodwill was grouped with thatof Flooring Systems on the grounds of the materiality
assessment. In view of the current situation and thenecessary value adjustment, the goodwill from the acquisition of the Russian vinyl plant is now disclosed
separately.
With the exception of Russia, no change in the basic
assumptions that can be regarded as reasonably realistic will result in the carrying amounts exceeding therecoverable amounts.

16 Accrued expenses anddeferred income
31.12.2022

31.12.2021

38.6
37.6
76.2

43.3
38.3
81.6

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 commissions. Other accrued expenses include accrued vol-ume rebates, commissions, premiums, interest andgoods and services received but not yet invoiced.

17 Provisions

Provisions
CHF m
As at January 1, 2022
Additions
Used during the year
Released during the year
Translation differences
As at December 31, 2022
Of which current provisions
Of which non-current provisions

Provisions
for legal
claims

Personnel
provisions

Other
provisions

Total

– 0.2
3.5

29.9
10.6
– 0.8
– 0.8
– 1.2
37.7

15.6
8.4
– 2.1
– 2.2
– 0.1
19.6

1.3
0.1
– 0.0
– 0.5
– 0.0
0.9

55.0
21.5
– 4.8
– 4.4
– 1.8
65.5

3.5

1.3
36.4

17.5
2.1

0.7
0.2

22.8
42.7

Warranty
provisions

Environmental
provisions

4.5
2.4
– 1.9
– 0.9
– 0.3
3.8

3.7

3.3
0.5

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 129

Warranty provisions are linked to product sales and are
based on past experience. The provisions for legal
claims relate mainly to liability claims. Personnel provisions comprise possible obligations arising from employment contracts and structural measures. Most of
the antici­pated 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 55%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
for years. Employees in the United Kingdom who meetcertain criteria are offered a defined contribution plan.
The composition of the pension liabilities is as follows:
2% to active employees, 30% to deferred members
and 68% to current beneficiaries.
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 23% 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 IAS 19
revised, even though they contain essential elementsof defined contribution plans.

130 FORBO ANNUAL REPORT 2022 – 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.
The latest actuarial valuations of the present valuesof defined benefit liabilities and of service costs were
performed as at December 31, 2022, by independentactuaries using the projected unit credit method. The
fair value of the plan assets was determined as at December 31, 2022, based on the information available
when the annual financial statements were prepared.
The weighted average duration of the pension plans(‘plan duration’) is 10.7 years for the United Kingdom,15.2 years for Switzerland, and 12.9 years for the othercountries.
The principal assumptions underlying the actuarial calculations are summarized as follows.

2022

2021

Actuarial assumptions
Switzerland

UK

Other

Weighted

Switzerland

UK

Other

Weighted

2.2
1.9
1.3

4.8
4.0
3.3

3.4
2.9
2.2

4.0
2.4
2.8

0.3
1.9
1.3

1.8
4.1
3.4

1.3
2.8
1.8

1.4
2.3
2.8

22
24

21
24

21
24

21
24

22
23

21
24

21
24

21
24

23
25

22
25

22
25

22
25

23
25

22
25

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 1957
Men
Women
Year of birth 1972
Men
Women

The pension costs for defined benefit plans recognized in the consolidated income statement can besummarized as follows:
2022

2021

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

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

2.0
0.2
– 0.1
2.1

0.5
3.6
– 3.6
0.5

2.0
0.7
– 0.2
2.5

4.5
4.5
– 3.9
5.1

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

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 131

Changes in pension liabilities under the defined benefit plans:
2022

2021

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

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

62.6
2.0
1.0
0.2
– 0.6
– 14.5

217.6
0.5

336.7
4.5
1.0
4.5
– 12.1– 89.2

69.0
2.3
1.0
0.1
– 2.8
– 7.0

231.0
0.3

3.6
– 9.3
– 62.6

56.5
2.0
0.0
0.7
– 2.2
– 12.1– 17.7
132.1

– 3.6
41.3

– 21.3
224.1

62.6

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

50.7

2.9
– 10.2– 13.0
6.6
217.6

.

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

2022

2021

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

46.8
0.1
1.7
1.0
– 4.8

215.9
3.6
0.3

268.3
3.9
4.1
1.0
– 64.3

45.4
0.0
1.7
1.0
1.5

222.0
2.7
0.3

– 59.0

5.6
0.2
2.1
0.0
– 0.5

5.3
0.1
1.6
0.0
0.5

272.7
2.8
3.6
1.0
– 3.2

– 0.6

– 9.3

– 2.2

– 12.1– 2.8– 10.244.2– 17.7
133.8

– 0.1
5.1

– 17.8
183.1

46.8

6.3
215.9

– 1.8
– 0.1
0.0
5.6

– 14.8
– 0.1
6.3
268.3

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

– 5.2

Most of the pension plans are financed in full or in partvia outsourced funds. Pension liabilities amounting to
CHF 28.3 million (2021: CHF 35.9 million) out of a totalof CHF 224.1 million (2021: CHF 336.7 million) are unfunded.

132 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

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

2022

2021

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

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

15.8
2.1
– 1.7
– 9.7

1.7
0.5
– 0.3
– 3.6
0.0
– 1.7

50.9
2.5
– 2.1
– 11.6
– 3.5
36.2

68.4
5.1
– 4.1
– 24.9
– 3.5
41.0

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

6.5

15.8

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

2022

2021

Recognized gains and losses in
the comprehensive income
statement
CHF mActuarial gains in the current
period:Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

14.5

62.6

12.1

89.2

7.0

13.0

3.8

23.8

Based on adjustment of demographic assumptions

0.0

0.3

0.0

0.3

4.9

– 1.1

0.1

3.9

Based on adjustment of financial
assumptions

15.2

59.8

12.4

87.4

2.3

9.4

3.4

15.1

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

– 0.7
– 4.8

2.5
– 59.0

– 0.3
– 0.5

1.5
– 64.3

– 0.2
1.5

4.7
– 5.2

0.3
0.5

4.8
– 3.2

Total gains recognized in thecomprehensive income statement before taxes

9.7

3.6

11.6

24.9

8.5

7.8

4.3

20.6

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 133

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

2022

2021

+ 50bp+ 50bp

Switzerland

UK

Other

Switzerland

UK

Other

– 3.6
1.1
0.8
1.1

– 6.6
0.0
2.6

– 2.4
1.4
2.2

– 5.3
1.6
1.2
1.4

– 13.7
0.1
4.6

– 4.0
2.3
3.8

Sensitivities – 50bp

– 50bp

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

Switzerland

UK

Other

Switzerland

UK

Other

4.0
– 1.0
– 0.8
– 1.0

7.2
0.0
– 3.8

2.7
– 1.2
– 2.0

6.0
– 1.6
– 1.2
– 1.4

15.3
– 0.1
– 8.0

4.6
– 2.1
– 3.4

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.

134 FORBO ANNUAL REPORT 2022 – 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, 2022, 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 143 of this Financial Report andon pages 86 as well as 92 and 93 of the Remuneration
Report. The number of shares with a three-year vesting
period allocated to the non-executive members of theBoard of Directors came to 261 in the reporting year
(2021: 186)
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 perfor-

2022

2021

12.4
32.2
23.4
23.3
8.7
100.0

10.3
46.5
12.8
25.7
4.7
100.0

mance 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 three-year vesting period. Converted sharesare locked up for a period of three years. As from theLong-Term Incentive Plan 2023 – 2025, they are locked
up for one year. The relevant share price for the allocation of PSUs at the start of the performance period is
calculated from the unweighted average of the closing
prices of the Forbo share in the first 14 trading days in
January of the year in which the PSUs were allocated.
Within the framework of the Long-Term Incentive Plan
73 shares (2021: 74) were allocated in the year underreview. The share price at measurement date was CHF
1,861.14 (2021: CHF 1,547.00).
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 2022 – CONSOLIDATED FINANCIAL STATEMENTS 135

The number of shares of Forbo Holding Ltd issued
in the year under review under the MIP was 682 (2021:
113). A further 42 shares (2021: 169) 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 to the Board of Directors and the Executive Board came to CHF 4.7 million in the year under review (2021: CHF 4.4 million).

20 Share capital andcapital management
Share capital
As at December 31, 2022, the share capital of Forbo
Holding Ltd stood at CHF 148,500 (2021: CHF 165,000),
divided into 1,485,000 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, 1,463,581 (2021: 1,628,581) registered shareswere eli­gible for dividends as at December 31, 2022.
At the Ordinary General Meeting held on April 1, 2022,
the shareholders of Forbo Holding Ltd approved thecapital reduction of 10%. It was completed with the entry in the Commercial Register of the Canton of Zug onJune 16, 2022 and was published in the SHAB on June21, 2022.

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

Capital management
By capital management, the Group means management of consolidated shareholders’ equity as well as optimization of the capital employed. The former includes

31.12.2022
Number
1,485,000

ChangeNumber– 165,000

31.12.2021
Number
1,650,000

50,821
021,41972,2401,412,760– 2,265– 150,625
0– 152,890– 12,11053,086150,625
21,419225,130
1,424,870

the fully paid-up share capital, the positions ‘Treasury
shares’, ‘Reserves’, and ‘Translation differences’ and, as per
December 31, 2022, amounted to CHF 550.1 million(2021: CHF 521.8 million).

136 FORBO ANNUAL REPORT 2022 – 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

11.5
5.7
– 0.4
– 6.3
– 0.1
10.4
5.9
0.0
– 5.9
– 0.5
9.9

46.9
17.8
– 0.4
– 16.5
– 0.5
47.3
13.5
0.0
– 15.9
– 2.4
42.5

CHF m
As at January 1, 2021
Additions
Derecognition
Depreciation
Translation differences
As at December 31, 2021
Additions
Derecognition
Depreciation
Translation differences
As at December 31, 2022

Land and buildings

Machinery and equipment

34.2
11.5
0.0
– 9.5
– 0.4
35.8
6.9
0.0
– 9.4
– 1.8
31.5

1.2
0.6
0.0
– 0.7
0.0
1.1
0.7
0.0
– 0.6
– 0.1
1.1

Interest from lease liabilities amounted to CHF 0.7 million in the year under review (2021: CHF 0.8 million).
The recognized lease liabilities came to CHF 40.4 million at year-end (2021: CHF 45.4 million), stated in thecurrent and non-current financial liabilities (see note 22‘Financial instruments’). The lease payments for recognized lease liabilities, including interest, came to CHF
19.1 million in the reporting year (2021: CHF 18.5 million).

Expenditure and payments for short-term leases cameto CHF 4.3 million (2021: CHF 3.6 million) and for leasesof low-value assets to CHF 1.3 million (2021: CHF 1.0
million).
The maturity analysis of the leasing liabilities is reported
in note 23 ‘Risk assessment and financial risk management’.

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 137

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
31.12.2022
Financial assets valued at fair value:
Cash and cash equivalents
Trade receivables
Other receivables
Non-current financial assets
Financial liabilities valued at amortized costs:
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, 2022, totaling
CHF 80.8 million (2021: CHF 156.7 million). The foreignexchange rates can be directly observed or determined. The derivatives are therefore assigned to hierarchy level 2.
The items ‘Other receivables’ and ‘Other current liabilities’ are lower than as shown in the balance sheet since
the direct and indirect tax receivables and liabilities
they contain do not qualify as financial instruments.

Carrying amount

Fair value throughprofit or loss

Amortized cost

Total

46.7
155.2
8.1
1.8

46.7
155.2
8.1
1.8

38.4
102.5
14.9
26.6

0.6
38.4
102.5
14.9
26.6

0.6

‘Current financial liabilities’ and ‘Non-current financial
liabilities’ generally correspond to the li­abilities fromleasing. As at December 31, 2022, ‘Current financial liabilities’ included also money market financing of CHF
19.7 million (2021: CHF 36.2 million) and a current account liability of CHF 4.9 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.

138 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

Classification of financial instruments

CHF m
31.12.2021
Financial assets valued at fair value:
Cash and cash equivalents
Trade receivables
Other receivables
Non-current financial assets
Financial liabilities valued at amortized costs:
Derivative financial instruments
Current financial liabilities
Trade payables
Other current liabilities
Non-current financial liabilities

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 following notes refer exclusively to the risk fromfinancial instruments. The Group is exposed to the following risks arising from the use of financial instruments:– Market risk
– Liquidity risk
– Default risk

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

Market riskThis refers to the risk that market prices, above all exchange rates and interest rates, will change. In its dayto-day operations, the Group uses derivative andnon-derivative financial instruments to manage therisks 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.

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 139

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 2022
or 2021.
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 exchange 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, 2022.
At present, the Group regards a cash level of roughly
CHF 60 million as sufficient to meet its payment obligations at all times.

140 FORBO ANNUAL REPORT 2022 – 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, 2022

CHF mInterest-free liabilities
Liabilities from leasing
Liabilities from money market financing
Current account liabilities
Cash outflow from financial derivatives

Total Cashoutflow
117.4
42.5
19.7
4.9
0.6

Remaining term
to maturity
up to 1 year
117.4
14.5
19.7
4.9
0.6

Remaining term
to maturity
1 – 2 years

Remaining term
to maturity
2 – 5 years

Remaining term
to maturity
over 5 years

11.4

10.8

5.8

Total Cashoutflow
124.3
46.8
36.2
0.8

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

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

As at December 31, 2021

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

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.
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.

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 141

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.

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 and are covered in part by credit insurance policies.

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

31.12.2022

31.12.2021

1.8
72.6
27.1
11.7
9.0
6.4
3.8
27.7
160.1

1.7
70.7
23.1
13.2
9.8
7.1
4.8
27.8
158.2

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

As at December 31, 2022
CHF m
Not due
Overdue ≤ 30 days
Overdue 31 – 90 days
Overdue 91 – 180 days
Overdue > 180 days
Total

Gross carrying
amount
139.2
9.3
6.2
2.8
2.6
160.1

Loss allowance
1.6
0.3
0.4
0.3
1.8
4.4

Weighted averageloss rate
1.1%
3.2%
6.5%
10.7%
69.2%
2.7%

Credit impaired
0.0
0.0
0.0
0.1
0.4
0.5

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

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

142 FORBO ANNUAL REPORT 2022 – 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.

2022

2021

– 4.8
– 1.1
0.4
0.3
0.3
– 4.9

– 6.1
– 0.8
1.0
1.1
0.0
– 4.8

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 143

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

2022
1.81
0.21
0.68
2.70

2021
2.28
0.22
1.11
3.61

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 2020 – 2022, 2021 – 2023 and 2022 – 2024
(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 2022 annual financial statements.

Board of Directors
2022
1.72
0.18
2.64
4.54

2021
1.20
0.19
2.60
3.99

Total
2022
3.53
0.39
3.32
7.24

2021
3.48
0.41
3.71
7.60

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, 2022 and 2021, the Group had no
significant receivables due from or liabilities to relatedparties.

144 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

Group companies(as at December 31, 2022)

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
D Direct participation of Forbo Holding Ltd

D

Flooring
Systems

Movement
Systems

Equityinterest

Holding/Services

S

S

MS

S

S
S

MS

H
MS
S
S

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 145

Currency

Share capital

EUR
EUR
EUR
EUR

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

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

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

Hanover
ErfurtPaderborn
Hanover

Great 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
D Direct participation of Forbo Holding Ltd

D

D

Flooring
SystemsMS
S

Movement
Systems

Equityinterest

Holding/Services

H

MS

MS
H
H
S
H
H

H

S
S

S

S

146 FORBO ANNUAL REPORT 2022 – 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
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 2022 – CONSOLIDATED FINANCIAL STATEMENTS 147

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’

Kyiv

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
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

148 FORBO ANNUAL REPORT 2022 – 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 2022 and the consolidated income statement,
statement of comprehensive income, consolidated statement of changes in equity and consolidated statement ofcash flows for the year then ended, and notes to the consolidated financial statements, including a summary ofsignificant accounting policies.
In our opinion, the consolidated financial statements (pages 102 to 147) give a true and fair view of theconsolidated financial position of the Group as at 31 December 2022, and its consolidated financial performanceand its consolidated cash flows for the year then ended in accordance with International Financial ReportingStandards (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
Standards on Auditing (SA-CH). Our responsibilities under those provisions and standards are further describedin the “Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements” section of our report.
We are independent of the Group in accordance with the provisions of Swiss law, together with the requirementsof 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
Key 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 2022 – CONSOLIDATED FINANCIAL STATEMENTS 149

VALUATION OF INVENTORIESKey Audit Matter

Our response

Inventory as at 31 December 2022 amounted to CHF
We mainly performed the following audit procedures:
316.2 million (31 December 2021: CHF 262.9 million)
and represents one of the most material asset positions.
 We obtained an understanding of the process
Valuation allowance for inventories as at 31 December
related to the identification and valuation obso2022 amounted to CHF -33.8 million (31 December
lete inventories. Based on this, we critically
2021: CHF -33.0 million). Valuation of inventories isassessed whether transactions are completely
consequently of significance to an understanding of theand accurately recorded in the accounts.
financial statements.
 Considering the diverse design of internal
Inventory is recognized at acquisition or manufacturingcontrol of individual subsidiaries, we tested
costs and periodically assessed in terms of recoverabilthe efficacy of key controls in connection withity. There is a risk that for work in progress and finishedthe valuation of inventories. In particular, wegoods the manufacturing costs exceed the actual sales
participated in the inventory stock counts andprice less selling, distribution and administrative costs
performed test counts.
(net realizable value).
 We assessed the adequacy of the processes
Furthermore, determining valuation allowances thereto identify obsolete inventories and criticallyevaluated the basis and methodology used tofore involves a certain degree of judgment.
value these inventories. We verified the calculation of the allowance for obsolete inventories
and tested the underlying input parameters.
Furthermore, in testing the valuation of inventories at lower of cost or net realizable value,
we compared costs and sales prices. This wasdone on a case-by-case basis based on asample or mass data analysis.

For further information on inventories refer to the following:— Note 2 – Summary of significant accounting policies: Inventories page 112— Note 13 – Inventories, page 125

150 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

Report of the statutory auditor

Other Information
The Board of Directors is responsible for the other information. The other information comprises the information
included in the annual report, but does not include the consolidated financial statements, the stand-alone financial
statements of the company, the tables marked “audited” in the Remuneration Report and our auditor’s reports
thereon.
Our opinion on the consolidated financial statements does not cover the other information 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 and, in doing so, consider whether the other information is materially inconsistent with the 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 this otherinformation, we are required to report that fact. We have nothing to report in this regard.
Board of Directors’ Responsibilities 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 SA-CH 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 SA-CH, we exercise professional judgment andmaintain 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.

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 151— 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.
— Evaluate the overall presentation, structure and content of the consolidated financial statements, including thedisclosures, 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 businessactivities 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 ininternal 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 othermatters that may reasonably be thought to bear on our independence, and where applicable, actions taken toeliminate 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.

Report on Other Legal and Regulatory Requirements
In accordance with article 728a para. 1 item 3 CO and PS-CH 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}}

Regula Tobler
Licensed Audit Expert
Auditor in Charge

André Stampfli
Licensed Audit Expert

Zurich, 1 March 2023

152 FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheets
2018 – 2022
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

31.12.2022

31.12.2021

31.12.2020

31.12.2019

31.12.2018

571.6
46.7
0.0
155.2
39.2
14.3
316.2
388.6
1.8
34.3
267.6
84.9
960.2

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

31.12.2022

31.12.2021

31.12.2020

31.12.2019

31.12.2018

291.6
39.0
102.5
29.9
21.2
99.0
118.5
26.6
8.2
42.7
41.0
410.1
550.1
0.1
– 0.0
550.0
960.2

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

FORBO ANNUAL REPORT 2022 – CONSOLIDATED FINANCIAL STATEMENTS 153

Consolidated income statements
2018 – 2022
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

2022

2021

2020

2019

2018

1,293.2– 852.4
440.8– 15.6– 178.6– 94.2– 27.7
7.9
132.6
0.9
– 2.5
131.0
– 29.6101.4

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

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
– 29.9106.2

1,282.2– 788.6493.6– 16.0– 191.4– 92.8– 26.2
9.1
176.3
0.8
– 1.8
175.3
– 37.0138.3

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
– 38.0137.6

154

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

155
156
157
158
161
162

156 FORBO ANNUAL REPORT 2022 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Balance sheet for Forbo Holding Ltd

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

31.12.2022

31.12.2021

533,288
58,241111,986
363,061
385,609,081
96,251,577
289,357,504
386,142,369

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

31.12.2022

31.12.2021

617,246,648
148,436
16,793,401
304,811368,895,721
148,500

103,274,930
2,905,439
99,979,656
389,835
287,831,983
165,000

8

15,600,000
15,302
2,407,766

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

283,826,409
138,993,165– 72,095,421
386,142,369

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

Note

2

3
4

Note

2

8

FORBO ANNUAL REPORT 2022 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 157

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

2021

149,616,981
492,620
150,109,601

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

2022

2021

5,395,807
5,711,331
9,298
11,116,436
138,993,165

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

Note1.1. – 31.12.
Expenses
CHF
Administrative expenses
Financial expenses
Direct taxes
Total expenses
Net profit for the year

2022

Note

9
10
5

158 FORBO ANNUAL REPORT 2022 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Notes to the financial statements
for Forbo Holding Ltd
1 Accounting

3 Loans to Group companies

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.

The loans to Group companies were valued at the rate
prevailing on the balance sheet date; unrealized exchange losses were booked, while unrealized exchange gains were not recognized. The item contained loans at an unchanged level of EUR 97.8 million.

2 Other receivables from andliabilities to Group companies

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

As at December 31, 2022, Forbo Holding Ltd held thefollowing direct investments:‘Other receivables from Group companies’ comprisethe claims on cash pool accounts and ’Other liabilities
to Group companies’ include primarily the credit balances on cash pool accounts, which were attributable
to the now completed share buyback program, and decreased again owing to the dividend income.

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-Hanover
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

19,957
15,400100
5,000
24,676
13,005

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

FORBO ANNUAL REPORT 2022 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 159

5 Direct taxes

7 Conditional capital

The item contains only withholding taxes. As in theprevious year, Forbo Holding Ltd was able to claim theentire participation deduction on dividend income.

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,
2022, remained unchanged against the previous year
at CHF 16,645.

6 Share capital
As at December 31, 2022, the share capital of Forbo
Holding Ltd totaled CHF 148,500 (2021: CHF 165,000),
divided into 1,485,000 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.
As part of the share buyback program approved by theOrdinary General Meeting of April 5, 2019, Forbo Holding Ltd bought back a total of 165,000 Forbo registeredshares between March 22, 2021, and March 16, 2022.
The shares were repurchased either via the second trading line on the SIX Swiss Exchange (90,165 shares) or ata fixed price (74,835 shares). At the Ordinary General
Meeting held on April 1, 2022, the shareholders of Forbo
Holding Ltd authorized the capital reduction of 10% of
the share capital from CHF 165,000 to CHF 148,500 withthe corresponding amendment to the Articles of Association. The capital reduction was completed with theentry in the Commercial Register of the Canton of Zug
on June 16, 2022 and was published in the SHAB on
June 21, 2022. The exchange adjustment took place on
the same day.

Treasury shares
As at January 1, 2022
Additions
Disposals
As at December 31, 2022

8 Treasury shares
Shares in Forbo Holding Ltd held by significant shareholders are disclosed in the Corporate Governance report; those held by members of the Board of Directors
and the Executive Board are disclosed in the Remuneration report.
The treasury shares directly held in Forbo Holding Ltd
amounting to CHF 72.1 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 2.4 million. Overall, the treasury shares held directly and indirectly developed asfollows over the period under review:

Cost
CHF
346,925,411
24,787,249– 297,209,473
74,503,187

Number ofregistered shares
225,130
14,375– 167,265
72,240160 FORBO ANNUAL REPORT 2022 – 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 5.9 million
at year-end 2022 (2021: CHF 6.6 million), of which none
were utilized.

10 Financial expenses
The financial expenses reflect primarily 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.

12 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 2022 annual financial statements.

FORBO ANNUAL REPORT 2022 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 161

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:2022
CHF
Net profit
Retained earnings
Treasury shares
Total at the shareholders’ meeting’s disposal

138,993,165
283,826,409– 72,095,421
350,724,153

be appropriated as follows:
2022
CHF
Distribution ordinary dividend
To be carried forward
Total at the shareholders’ meeting’s disposal

At the Ordinary General Meeting of March 30, 2023,
the Board of Directors will propose an ordinary grossdividend of CHF 23.00 per registered share (2021: CHF
25.00). 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 for
distribution as ordinary dividends may still change.

32,493,480
318,230,673
350,724,153

162 FORBO ANNUAL REPORT 2022 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Report of the statutory auditor

StatutoryAuditor's
Auditor'sReport
ReportStatutory
To 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 December 2021, and the income statement for the year then ended, and notes to the financial statements, including
We have audited the financial statements of Forbo Holding Ltd (the Company), which comprise the balance sheet
a summary of significant accounting policies.
as at 31 December 2022, and the income statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion the financial statements (pages 150 to 156) for the year ended 31 December 2021 comply with
Swiss law and the company’s articles of incorporation.
In our opinion, the financial statements (pages 156 to 160) comply with Swiss law and the Company’s articles ofincorporation.
Basis for Opinion

Basis
Opinionour audit in accordance with Swiss law and Swiss Auditing Standards. Our responsibilities underWefor
conducted
those provisions and standards are further described in the Auditor’s Responsibilities for the Audit of the Financial
We Statements
conducted our
auditofinour
accordance
law andStandards
on Auditing(SA-CH).
Our ofresponsisection
report. Wewith
are Swiss
independentof Swiss
the entity
in accordancewith theprovisions
Swiss lawbilities
those provisions
standards
are further
described
the “Auditor’sfor the in
Audit
andunderthe requirementsof theandSwissaudit profession
andwe have infulfilled
our otherResponsibilities
ethical responsibilities
acof theFinancial
Statements”
section of our report. We are independent of the Company in accordance with thecordancewiththese requirements.
provisions of Swiss law, together with the requirements of the Swiss audit profession and we have fulfilled our
otherresponsibilities
accordance
withobtained
these requirements.
Weethical
believethat the audit inevidence
we haveis sufficient and appropriate to provide a basis for our opinion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our
opinion.
Report on Key Audit Matters based on the circular 1/2015 of the Federal Audit Oversight Authority
KeyKeyAudit
Matters
audit
matters are those matters that, in our professional judgment, were of most significance in our audit of
the financial statements of the current period. We have determined that there are no key audit matters to comKeymunicate
audit mattersthose matters that, in our professional judgment, were of most significance in our audit
in ourarereport.
of the financial statements of the current period. We have determined that there are no key audit matters tocommunicate in our report.
Responsibility of the Board of Directors for the Financial Statements
TheInformation
Board of Directors is responsible for the preparation of the financial statements in accordance with the proviOthersions of Swiss law and the company’s articles of incorporation, and for such internal control as the Board of Direcdetermines
is necessary
to enable
theotherpreparationof financial
statementsthat arefree frommaterial
misThetors
Boardof Directors
is responsible
for theinformation.
The other
information
comprises
theinformation
statement,
due to but
fraud
or error.
includedin thewhether
annual report,
does
not include the consolidated financial statements, the stand-alone financial
statements of the Company, the tables marked “audited” in the Remuneration Report and our auditor’s reports
In preparing the financial statements, the Board of Directors is responsible for assessing the entity’s ability to conthereon.
tinue as a going concern, disclosing, as applicable, matters related to going concern and using the going concernof accounting
unlessthe Board doesof Directors
eitherto liquidateandthe weentitycease operations,Ourbasis
opinionon the financial
statements
not covertheintends
other information
do or
nottoexpress
any form ofor
has no realistic
alternative
assurance
conclusion
thereon.but to do so.

In connection with our audit of the financial statements, our responsibility is to read the other information and,
Auditor’s
Responsibilities
forotherthe Auditof the isFinancial
Statements
in doingso, consider
whether the
informationmateriallyinconsistent with the financial statements or our
knowledge obtained in the audit or otherwise appears to be materially misstated.
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are freefrom material
misstatement,
whether due
fraud or error,
and toan auditor’sreport that
includesIf, basedon the work
we have performed,
wetoconclude
that there
is issuea material
misstatementof thisother our opinion. Reasonableassurancea highlevelof We
assurance,
but is tonotreport
a guaranteethat an audit conducted in accordinformation,
we are required
to isreportthat
fact.
have nothing
in this regard.
ance with Swiss law 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 financial statements.

FORBO ANNUAL REPORT 2022 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 163

Board of Directors’ Responsibilities for the Financial Statements
The Board of Directors is responsible for the preparation of the financial statements in accordance with theprovisions of Swiss law and the Company’s articles of incorporation, and for such internal control as the Board of
Directors determines is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, the Board of Directors is responsible for assessing the Company’s ability
to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going
concern basis of accounting unless the Board of Directors either intends to liquidate the Company or to cease
operations, or has no realistic alternative but to do so.
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 freefrom material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes ouropinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted inaccordance with Swiss law and SA-CH 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 financial statements.
As part of an audit in accordance with Swiss law and SA-CH, we exercise professional judgment and maintainprofessional 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 theCompany’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 Company’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 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 Company 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.

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

Report of the statutory auditor

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 othermatters that may reasonably be thought to bear on our independence, and where applicable, actions taken toeliminate 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.

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

Regula Tobler
Licensed Audit Expert
Auditor in Charge

André Stampfli
Licensed Audit Expert

Zurich, 1 March 2023

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.
In this annual report, gender-specific wording has mostly been disregarded solely for the sake of better readability.
The masculine forms used are to be understood as gender neutral.
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
info@forbo.com
www.forbo.com