ANNUAL REPORT 2023

CONNECT.
AMBIENCE.
EFFICIENCY.
FORBO IN EVERYDAY LIFE

AMBIENCE.
Quality, looks, and a dynamic relationship with the space are
the hallmarks of premium-quality floor coverings. The wide­range of floor coverings in our portfolio offers ideal combinations to meet the requirements of diverse areas of applicationin terms of design, originality, creativity, and durability. Textile
and vinyl floor coverings are available in designs and formats
with a natural look such as wood or stone and can also be­designed to order using digital print technology. Sustainability
is an ever-present theme, from the use of recycled and recyclable materials to production plants powered by renewable­energy and loose-lay installation options.

EFFICIENCY.
Conveyor belts are deployed in various ways to ensure thetrouble-free flow of goods and efficient operating procedures.
In the food industry, hygiene, precision, and the reliability ofprocessing belts are the crucial factors. Thanks to their variedcharacteristics, our processing belts ensure the smooth running of every stage of production processes, from conveying,positioning, heating, and cooling to drying, cutting, and­packaging, and meet the highest standards of hygiene.

6This E. Schneider

Jens Fankhänel

Chairman of the Board of Directors

Chief Executive Officer‘Forbo is looking back on another challenging year. Adverse­currency effects and a very gloomy economic environment witha significant drop in demand have increasingly challenged us
in the second half of the year.
The resulting lower volumes, higher personnel cost due to­inflation, and continued high energy cost required consistent
optimization measures and strict resource management.
At the same time, despite the economic challenges, we continued
to pursue strategic topics such as innovative and sustainableadditions to our product portfolio, digitalization, and new­production technologies.’

FORBO ANNUAL REPORT 2023 – LETTER TO SHAREHOLDERS

7

TO OUR­SHAREHOLDERS
Dear Madam, dear Sir
After the first glimmers of hope in a challenging market environment and a slight recovery in the first half ofthe year, the geopolitical and macroeconomic situation deteriorated increasingly from the third quarter
onwards. As a result, Forbo also experienced a slowdown in market momentum and a resulting decline indemand, which intensified in the fourth quarter and was reflected in lower volumes. In addition, the year wascharacterized by significant adverse currency effects on net sales and earnings.
We implemented targeted measures to improve profitability and efficiency and further operational
improvements. Our operating structures were adapted to the lower volumes, inventories were reduced, andthe necessary sales price increases were implemented. These measures compensated for the increased
personnel cost due to inflation and the continuing high energy cost. Overall, we achieved a significantly higher
cash generation.
Translating local results into the corporate currency resulted in significant currency losses on net sales (CHF
80 million) and EBIT (CHF 10 million).

Significant decline in demand
from third quarter 2023 onwards
Slight decline in net sales in local currencies
In the year under review, Forbo generated net sales of CHF 1,175.2 million (previous year: CHF 1,293.2 million).
In local currencies, this represents a decline of 2.9% and corresponds to a decrease in net sales of 9.1% in thecorporate currency due to strongly adverse currency effects. In local currencies, the three regions contributed
as follows: Asia/Pacific + 6.6%, Europe – 3.3%, and the Americas – 8.0%.
Forbo's customers' investment activity slowed noticeably due to increasing global uncertainties. Thisdevelopment was evident in both divisions and across all regions.
Net sales of Flooring Systems fell by 3.1% in local currencies to CHF 796.5 million (previous year: CHF 878.0
million). In corporate currency, this represents a decline of 9.3%. Activity in the construction industry slowed
significantly due to higher interest rates and a massive increase in construction cost. At the same time,customers shifted their renovation investments from flooring replacements to energy-saving investments.
Movement Systems generated net sales of CHF 378.7 million (previous year: CHF 415.2 million), a decreaseof 2.6% in local currencies and 8.8% in corporate currency. Demand in the globally important logistics segment
remained subdued after several years of growth. Demand in the other segments was stable overall. The
expected economic recovery has yet to occur in the crucial Chinese market.

8

FORBO ANNUAL REPORT 2023 – LETTER TO SHAREHOLDERS

Operating profit impacted by lower demand
and adverse currency effects
Double-digit EBIT margin
Operating profit before depreciation and amortization (EBITDA) decreased by CHF 13.5 million (– 7.0%) to CHF
179.9 million (previous year: CHF 193.4 million). Group operating profit (EBIT) decreased by CHF 2.7 million(– 2.0%) to CHF 129.9 million (previous year: CHF 132.6 million, including one-time impacts). This resulted in an
EBITDA margin of 15.3% (previous year: 15.0%) and an EBIT margin of 11.1% (previous year: 10.3%).
A double-digit EBIT margin was achieved despite a difficult market environment with declining demand
and a corresponding significant decline in sales volumes (– 9%), significantly adverse currency effects, higher
personnel cost due to inflation, and continuing high energy cost. This was achieved thanks to adjusted
operating structures, efficiency measures, and sales price increases (+ 6%).
The partial decline in raw material prices in the second half of the year had only a minor impact on
profitability for the entire year.

Group profit slightly higher than previous year
Positive financial result
Based on the slightly lower operating result, a comparable tax rate of 22.4% (previous year: 22.6%) and apositive financial result of CHF + 1.9 million (previous year: CHF – 1.6 million) due to foreign exchange gains andinterest income, the Group profit increased by 0.9% or CHF 0.9 million to CHF 102.3 million (previous year:
CHF 101.4 million).

Solid balance sheet
Strong equity baseDue to strict inventory management and optimized sales and production planning, inventories were reducedby 16.4%, or CHF 52.0 million, to CHF 264.2 million (previous year: CHF 316.2 million). Net cash and cash
equivalents amounted to CHF 69.0 million at the end of 2023 (previous year: CHF 21.4 million). This increase ismainly due to the significant reduction in operating working capital. In addition, Forbo held treasury shares of
CHF 81.8 million as at December 31, 2023, valued at the 2023 year-end price. Free cash flow of CHF 115.9
million more than doubled (previous year: CHF 50.5 million) due to the targeted optimization of inventories.
The equity ratio is very solid and has increased to 61.4% (previous year: 57.3%). Undiluted earnings per sharereflect the slight improvement in earnings and increased by 1.1% to CHF 72.55 (previous year: CHF 71.76).

Good progress on sustainability topics
Ongoing reduction of CO2 footprint
We aim to reduce CO2 emissions further in both divisions by continuously increasing the proportion ofrenewable or recycled raw materials used in the manufacturing of our product portfolio. Further measures
include expanding local take-back programs for products at the end of their life cycle and increasing the use ofrenewable energy.
In the year under review, we laid the foundations for measuring Scope 1, 2, and 3 emissions following current
requirements, which are being reported for the first time for the entire Forbo Group in 2023.

9

Change on the Executive Board
New Chief Executive Officer
Jens Fankhänel took over as Chief Executive Officer and Chairman of the Executive Board of the Forbo Group at
the beginning of March 2023, succeeding This E. Schneider (Chairman of the Board of Directors), who had held
this position on an interim basis since the end of November 2022.

Information and proposals to the Ordinary General Meeting
Changes on the Board of Directors
Dr. Peter Altorfer will not be standing for re-election after almost 20 years with the company. He has made asignificant and pivotal contribution to the further development of the Forbo Group with his legal expertise,profound financial knowledge, and many years of professional experience. The Board of Directors owes him an
outstanding debt of gratitude for his exceptional commitment and the trust and cooperation he has shown
and wishes him all the best for the future.
The Board of Directors will propose Jörg Kampmeyer and Bernhard Merki for election to the Board of
Directors at the Ordinary General Meeting. Bernhard Merki has worked as an entrepreneur since 2019 and is a
professional and independent board member with seats in various national and international companies. Jörg
Kampmeyer is a managing partner of Gebr. Knauf KG, one of the world's largest producers of building materials.
In Bernhard Merki, we have gained a Board member with extensive industrial experience in both ofForbo's divisions. With Jörg Kampmeyer, we have gained an excellent executive leader with expertise in the
global supply of construction materials and in marketing and digitalization.
Increase in the dividend
Based on the substantial increase in free cash flow and the solid equity base, the Board of Directors willpropose to the Ordinary General Meeting a dividend of CHF 25 per share (previous year: CHF 23 per share),representing an increase of 9% and a payout ratio of 34%.

Priorities and outlook for 2024
Priorities for 2024
Attractive product and service offerings, high product availability, reliable delivery quality, and customer intimacy
will be critical success factors, especially in the current market environment. Therefore, we will actively implement
our defined sales and marketing activities and important operational excellence initiatives. In a geopolitically
volatile and still tense climate, it is also crucial to deploy our funds and resources in an entrepreneurial andfocused manner.
Forbo will continue to pursue the successful strategy of the past years. We have an attractive productportfolio in both divisions. We will continue to invest in our sustainable product and service offering andgrowth markets. We will focus on further efficiency improvements and progress in all sustainability areas
through digitalization, new production technologies, and technology enhancements. We will exploit external
growth opportunities if and when they create long-term value.

10

FORBO ANNUAL REPORT 2023 – LETTER TO SHAREHOLDERS

Outlook for 2024
There is currently no sign of recovery in the market environment in the short term and, therefore, 2024 willcontinue to challenge us in all areas of the organization.
However, we are well prepared to face the currently very challenging market environment with a solid
financial foundation that is both sound and without debts, a proven strategy, and leading market positions.
Thanks to our targeted investments and strategic initiatives, we will strengthen our competitiveness andcreate the base to take full advantage of increasing demand.
Provided the geopolitical and economic environment does not change significantly, we expect net sales
and Group profit to grow in local currencies. With foreign exchange rates at current levels, we expect net
sales of around CHF 1.2 billion and Group profit of up to CHF 110 million.

Acknowledging our stakeholders
Great commitment and cooperation
The reporting year once again demanded a special and above-average commitment from our employees tomeet the various challenges in the best possible way. With great dedication, flexibility, agility, perseverance,
good communication, and teamwork, we responded to the changing circumstances and served our customers
reliably and competently. Many thanks to our teams for their tireless and much-appreciated commitment.
We would also like to thank our customers, business partners, and suppliers for their excellent cooperation
during these challenging times.
On behalf of the Board of Directors and Group Executive Board, we would also like to thank our valued
shareholders for your continued trust and loyalty to our company.

Baar, March 2024

This E. Schneider
Chairman of the Board of Directors

Jens Fankhänel
Chief Executive Officer

Activity report

13

Forbo in figures

16

Market environment affects sales and earnings

20

Two divisions with leading market positions

24

Flooring Systems: Difficult market environment

26

Movement Systems:
Lower levels of capacity utilization in plants

32

Organization

39

Executive Board40Group structure 

42

Board of Directors

44

The Forbo share 

47

Sustainability report

51

Introduction52
Foundation55
Description of the business models

58

Environment61
Social68

2024

Financial calendar
Ordinary General Meeting
Friday, April 5, 2024
Publication of
Half-Year Report 2024
Friday, July 26, 2024

2025

Financial calendar
Publication ofAnnual Report 2024
Tuesday, March 4, 2025

Governance

78

Corporate governance report

81

Remuneration report

101

Consolidated financial statements
for Forbo Holding Ltd

121

Consolidated balance sheet

122

Consolidated income statement

123

Consolidated comprehensive income statement

124

Consolidated statement of changes in equity

125

Consolidated cash flow statement

126

Notes – accounting principles

127

Notes135
Group companies

162

Report of the statutory auditor

166

Consolidated balance sheets 2019 – 2023

170

Consolidated income statements 2019 – 2023

171

Financial statements for Forbo Holding Ltd173
Balance sheet

174

Income statement

175

Notes to the financial statements

176

Proposal for appropriation of available earnings

179

Report of the statutory auditor

180

ACTIVITYREPORT
Forbo in figuresMarket environment affects sales and earnings
Two divisions with leading market positions
Flooring Systems:
Difficult market environment
Movement Systems:
Lower levels of capacity utilization in plants

16
20
24
26
32

14

FORBO ANNUAL REPORT 2023 – ACTIVITY REPORTFORBO IS A LEADINGPRODUCER OF
FLOOR COVERINGS,BUILDING ANDCONSTRUCTIONADHESIVES, AS WELL
AS BELTS FOR POWER
TRANSMISSION AND
LIGHTWEIGHT CON­
VEYOR ­TECHNOLOGY.

15

The company employs about 5,200 people andhas an international network of 25 production
and distribution companies, 6 fabrication centers,
and 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 2023 – ACTIVITY REPORTFORBO 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 attractive
markets and customers. The quality,
longevity, and perfor­mance of our
products and systems lead to longstanding 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 offices and service points worldwide.
 Production facilities andfabrication centers
Other local distribution companies

17

Net sales
CHF 1,175.2 million
EBIT
CHF 129.9 million
EBIT margin
11.1%
Group profit
CHF 102.3 million
Earnings per share
CHF 72.55
undiluted

18

FORBO ANNUAL REPORT 2023 – ACTIVITY REPORTNet sales by division
Change on previous year
2023 CHF m
796.5
378.7
1,175.2

Flooring Systems
Movement Systems
Total

in %
– 9.3
– 8.8
– 9.1

in localcurrencies in %
– 3.1
– 2.6
– 2.9

In % of total
67.8
32.2
100.0

32.2%
Movement Systems

67.8%
Flooring Systems

Employees by division
2023 number
2,741
2,408
41
5,190

Flooring Systems
Movement Systems
Corporate Functions
Total

41

Corporate Functions

2,408

Movement Systems

2,741
Flooring Systems

Change onprevious year in %
– 5.2
– 2.1
2.5
– 3.7

In % of total
52.8
46.4
0.8
100.0

19

Financial overview Forbo Group

2023

2022

2023

2022

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

CHF m
1,175.2
796.5
378.7
179.9

CHF m
1,293.2
878.0
415.2
193.4

EUR m1)
1,209.7
819.9
389.8
185.2

EUR m1)
1,288.0
874.5
413.5
192.6

129.9
102.3

132.6
101.4

130.6
105.3

132.1
101.0

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

CHF m
901.4
801.5
553.7
69.0

CHF m
960.2
879.2
550.1
21.4

EUR m1)
927.8
825.0
569.9
71.0

EUR m1)
956.4
875.7
547.9
21.3

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

CHF m
160.0
– 44.1
115.9

CHF m
80.6
– 30.1
50.5

EUR m1)164.7– 45.4119.3

EUR m1)80.3– 30.050.3

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

%
15.3
61.4
– 12.5

%
15.0
57.3
– 3.9

Employees (as at December 31)
Total employees

Number
5,190

Number5,390

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

CHF
72.55
392.7625.004)CHF
71.76
389.1623.005)

EUR1)
74.68
404.2825.734)

EUR1)
71.47
387.6122.915)

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

CHF m
1,565.2

CHF m
1,615.7

EUR m1)
1,611.1

EUR m1)
1,609.3

1) Euro values translated at the average annual exchange rate of CHF
0.9715/1 EUR (2023) and CHF 1.0040/1 EUR (2022).
2) Liquidity plus financial assets less financial liabilities, excluding
leasing liabilities.
3) See note 11 ‘Earnings per share’ on page 142 of the financial ­report.

4) The Board of Directors proposes to the Ordinary General Meetingof April 5, 2024, the distribution of a dividend in the amount of
CHF 25.00 per registered share.
5) Approval of a dividend of CHF 23.00 per registered share at theOrdinary General Meeting of March 30, 2023.
6) Total number of shares multiplied by year-end share price.

20

FORBO ANNUAL REPORT 2023 – ACTIVITY REPORTMARKET ENVIRONMENTAFFECTS SALES ANDEARNINGS
The reporting year was once again very challenging for both Forbo divisions. The
geopolitical and macroeconomic environments worsened from the third quarterwith corresponding effects on markets and industries. Overall, there was a marked
slump in demand in Europe and the USA, reflected in declining volumes in bothdivisions. In addition, strongly negative currency effects, and inflationary rises in cost
had a significant impact on the result.
The application of sales price increases in a highly competitive market environment,
ongoing measures to increase efficiency and a strict resource management made it
possible to offset the majority of these effects.
The delivery of important strategic projects continued to be a focus, alongside thedevelopment and introduction of attractive and sustainable products supported bytargeted sales and marketing activities.

Slowdown in demand leads to slight slump in net
sales in local currencies
The Group’s net sales declined by 2.9% in local currencies to CHF 1,175.2 million (previous year: CHF 1,293.2
million). This corresponds to a decrease of 9.1% in thecorporate currency, once strongly negative currency
effects of CHF 80 million are factored in. Overall, there
was a growth in net sales in the Asia/Pacific region,whilst Europe and the Americas recorded a decrease.

Net sales by geographic area
Change on previous year

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

2023
in %
11.7
11.1
10.0
7.1
6.4
2.4
15.4
64.1
16.2
4.7
20.9
15.0
100.0

in %
– 10.6– 16.1– 3.6– 13.2
– 5.1
– 8.0
– 3.1
– 8.6
– 16.70.9– 13.3– 5.3– 9.1

in local currencies in %– 7.6
– 13.2
– 0.3
– 5.2
– 0.3
– 8.0
7.0
– 3.3
– 11.5
6.6
– 8.0
6.6
– 2.9

2023
CHF m
137.9
130.1
118.1
83.3
75.6
28.6
179.9
753.5
190.7
54.7
245.4
176.3
1,175.2

25

50

75

100

125

150

175

200

225

250

21

The Flooring Systems division generated net sales of
CHF 796.5 million (previous year: CHF 878.0 million),
representing a decrease of 3.1% in local currencies(– 9.3% in the corporate currency). The Asia/Pacific region achieved gratifying sales growth in local currencies, whereas Europe and the Americas reported declines.
The Movement Systems division generated net salesof CHF 378.7 million (previous year: CHF 415.2 million),
representing a decrease of 2.6% in local currencies(– 8.8% in the corporate currency). In the Asia/Pacificregion, sales rose in almost all country organizations,whereas Europe recorded a slight decrease and theAmericas a pronounced drop.

Double-digit EBIT margin
Despite the substantial market-driven reduction insales volumes, clearly negative currency effects, higher
personnel cost due to inflation, and ongoing high­energy cost, a double-digit EBIT margin has beenachieved. This was the result of strict resource management, ongoing measures to increase efficiency aswell as sales price rises, among others.
The Group saw operating profit before depreciation
and amortization (EBITDA) declining by 7.0% to CHF
179.9 million (previous year: CHF 193.4 million). EBITDA
at Flooring Systems declined by 3.2% to CHF 123.2­million (previous year: CHF 127.3 million, including
one-time impacts). At Movement Systems, EBITDA reduced by 13.1% to CHF 65.5 million (previous year:
CHF 75.4 million).

EBITDA by division
Flooring Systems
Movement Systems
Corporate

2023
CHF m
123.2
65.5
– 8.8

Change onpre­vious year in % – 25
– 3.2
– 13.1
5.4

0

The Group achieved an EBITDA margin of 15.3% (previous year: 15.0%). The EBITDA margin for Flooring Systems increased by 1.0 percentage points to 15.5% (previous year: 14.5%). The EBITDA margin for Movement
Systems declined by 0.9 percentage points to 17.3%(previous year: 18.2%).
Group operating profit (EBIT) was 2.0% lower at CHF
129.9 million (previous year: CHF 132.6 million, including one-time impacts). The Group EBIT margin increased from 10.3% the previous year to 11.1% in theyear under review.
Based on the slightly lower operating profit (EBIT), a
comparable tax rate and a positive financial result
thanks to exchange rate gains made on foreign currencies, and interest income, Group profit increased by
0.9% to CHF 102.3 million (previous year: CHF 101.4
million, including one-time impacts).

25

50

75

100

125

Taxes and financial result
The tax rate in the year under review was 22.4% (previous year: 22.6%), slightly below the long-term average.
Financial expense in 2023 came to CHF 3.8 million(previous year: CHF 2.5 million) and was primarily
made up of higher interest expenses in the year underreview. Offsetting this was financial income of CHF 5.7
million, significantly higher than in the previous year
(previous year: CHF 0.9 million), comprising higher interest receipts and gains from currency translations.
Overall, this produced a net financial result of CHF+ 1.9 million (previous year: CHF – 1.6 million).

22

FORBO ANNUAL REPORT 2023 – ACTIVITY REPORTFree cash flow
2023
CHF m
160.0
– 44.1
115.9

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

Significant increase in free cash flow
In the reporting year, cash flow from operating activities reached CHF 160.0 million (previous year: CHF 80.6
million). This was predominantly the result of a better
inventory management. Along with inventories, tradereceivables were also reduced. Cash flow from investments increased, due in particular to strategic longterm investments in both divisions and came to net
CHF – 44.1 million (previous year: CHF – 30.1 million).
As a result, free cash flow reached CHF 115.9 million(previous year: CHF 50.5 million).

2022
CHF m
80.6
– 30.1
50.5

– 50

0

50

100

150

200

Solid balance sheet
Total assets as at December 31, 2023, reduced by CHF
58.8 million and stood at CHF 901.4 million (previous
year: CHF 960.2 million). This was mainly attributable to
the reduction of inventories and trade receivables aswell as currency translation differences. Net cash
­increased by CHF 47.6 million to CHF 69.0 million (previous year: CHF 21.4 million), primarily due to the significantly reduced net working capital. Shareholders’equity rose by CHF 3.6 million net and as at the end of
December 2023 stood at CHF 553.7 million (previous
year: CHF 550.1 million). The equity ratio remains solid,
standing at 61.4% (previous year: 57.3%).

Investments 2019–2023

2023
2022
2021
2020
2019

Flooring
Systems
CHF m

Movement
Systems
CHF m

Total
CHF m

27
18
23
21
23

18
13
15
19
13

45
31
38
40
36

Significantly more invested
In the reporting year, both divisions invested in important activities and strategic projects relating to
product portfolio, technology, infrastructure, and capacity expansion projects. Total Group investments inproperty, plant, and equipment and intangible assets
in 2023 were CHF 45.3 million (previous year: CHF 30.9
million), corresponding to a significant increase of
46.6%. Overall, 52% of the investments were replacement investments and 48% went towards rationalization and expansion programs.

10

20

30

In the reporting period, Flooring Systems invested CHF
26.8 million (previous year: CHF 17.9 million), corresponding to a marked increase of 49.7%. A significant
proportion of this amount went into the expansion of
the production plant for Flotex floor coverings in theUSA. Further funds were deployed for new technology
for vinyl floorings, designed to transform used floor
coverings into recyclate, thereby supporting initiatives
to optimize the circular economy. The conversion to
new mist filter technology at the Coevorden plant progressed according to plan during the reporting year
and will achieve significant reductions in gas use andCO2 emissions. In addition, a diverse range of modernizations were introduced at a number of production
plants to support more efficient production processes
and simplify work steps.

40

50

23

Investment in property, plant, and equipment at
Movement Systems came to CHF 17.8 million (previous
year: CHF 13.0 million), corresponding to a significant
increase of 36.9%. The majority of the funds went towards the additional production line for Transilon belts
at the manufacturing site in Pinghu/China and themodernization of the production plant in Fukuroi/Japan. New high-frequency welding machines for fabri-cating extra-wide roller shutters were installed at the
fabrication plants in the USA and Slovakia. At the US
plants, further camera-based product inspection systems were introduced to increase efficiency in thequality assurance process. Other investments included
modernizations of production facilities, the establishment of new service centers and the installation offurther photovoltaic systems in Europe.

Employees by geographic area

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

2023
Change on
in % pre­vious year in %
19.1
– 6.6
12.3
– 6.6
9.2
– 3.4
7.8
– 0.7
3.5
– 3.2
3.4
– 2.7
14.1
– 3.5
69.4
– 4.6
11.1
– 2.0
3.9
2.5
15.0
– 0.9
15.6
– 2.4
100.0
– 3.7

2023
number
991
636
480
404
180
178
735
3,604
576
204
780
806
5,190

Prudent personnel management
At year-end 2023, the Forbo Group employed 5,190
people. This is a total of 200 fewer employees than at
the end of the previous year. The individual percentage changes in staffing levels mostly reflect the trend
in the markets and the business performance in thevarious countries and regions. They mirror the situation on the balance sheet date at the end of the year.

200

400

600

800

1,000

Following adjustments to operating structures in theprevious year, a prudent approach to personnel management was exercised, with recruitment aligned tobusiness development. In consequence of the significant decline in demand from the third quarter changes to the various local working and shift models were
implemented.

24

FORBO ANNUAL REPORT 2023 – ACTIVITY REPORTTWO DIVISIONSWITH LEADING
MARKET POSITIONSForbo operates primarily in bu­si­ness areas in which it hasor can achieve a leading global market po­sition – something
it has achieved for both Flooring Systems and Movement
Systems.

Strategic directions

Flooring Systems

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.

Thanks to their e­ xcellent technical properties and attractive designs, floor coverings from Flooring Systems
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. Witha market share of about 70 percent, Forbo is the world
leader in linoleum.
Flooring Systems also provides ready-made ad­hesives for floor covering installations, parquet flooring,and ceramic tiles, leveling compounds for the construction industry, as well as liquid floors under the
trade name Eurocol.

Movement Systems
Products from Movement Systems are known underthe brand name Siegling. They are used in a wide range
of ap­plications in industry, trade, and the service sector, ­including conveyor and processing belts in thefood ­industry, treadmill belts in fitness studios, and flat
belts in mail distribution centers.

25

AMBIENCE.

FLOORINGSYSTEMSThe Flooring Systems division offers asustainable, broad, and attractive range ofenvironmentally friendly natural linoleum,high-quality vinyl floors, entrance flooring
systems, carpet tiles, needle felt, and F­ lotex,
the washable high-tech textile flooring.

EFFICIENCY.

MOVEMENTSYSTEMS
Movement Systems is a global industry
leader for sophisticated con­veyor andprocessing belts, plastic modular belts,
top-quality power transmission belts,
as well as timing and flat belts made ofsynthetic ma­te­rials.

FLOORINGSYSTEMS
Customized designs
The design of flooring for a particular space has to take anumber of considerations into account, principally those of
appearance, functionality, and sustainability. When selecting
the floor covering, designers have to consider the atmosphere of the space, as well as the technical requirements.
Thanks to digital printing technology, vinyl and Flotex­coverings can be made to customer specifications. In­Flooring Systems’ digital design library, users can visualize
the design, color scheme, and surface textures to fit every
kind of room configuration. Concepts become reality:from linear or abstract motifs to realistic imagery.

28

FORBO ANNUAL REPORT 2023 – ACTIVITY REPORTDIFFICULT
MARKET ENVIRONMENT

Jean-Michel Wins
Executive Vice President
Flooring Systems‘The sustained difficult market environment in theconstruction industry again posed a stern challenge inthis reporting year. Core markets like France, Germany,and the USA were heavily affected. The subdued­demand and associated decline in volumes impacted
the efficiency and profitability of plants. Strict resource
management cushioned these effects. In a highly
competitive environment, we were able to increase
sales prices. We introduced attractive collections in all
our product lines and developed further new innovative products for introduction in 2024. We committed
diverse investments aimed at contributing to an­optimized circular economy. The expansion of the
production plant for Flotex floor coverings in the USA
progressed as planned.’

The Flooring Systems division generated net sales of
CHF 796.5 million in the 2023 business year (previous
year: CHF 878.0 million), corresponding to a decreaseof 3.1% in local currencies and 9.3% in the corporate
currency due to marked negative currency effects.
­Demand was strongly affected by the reduced levelsof activity in the construction industry caused by inflationary cost increases and higher interest rates. In­addition, customers shifted their capital expenditurefrom renovation projects to energy-saving investment
objects. The division accounted for 67.8% of Group net
sales in 2023. Operating profit (EBIT) increased by 7.4%
to CHF 94.9 million (previous year: CHF 88.4 million,
including one-time impacts). The market-driven­negative volume development and the corresponding
decline in capacity utilization, the higher personnel
cost due to inflation, and very negative currency effects
had a significant effect on operating profits. These
were offset to some extent by sales price adjustments
and a slight easing of the raw material prices in thesecond half of the year. The EBIT margin increased by
1.8 percentage points to 11.9% (previous year: 10.1%).
Heterogenous market environment in theconstruction industry impacts sales picture
A significant decline in demand was seen in the Americas and Europe in particular, whereas Asia/Pacific recorded a gratifyingly sales increase. In local currencies,
the sales development was as follows: Europe – 3.4%,
Americas – 7.0%, and Asia/Pacific + 6.6%.
In Europe, Italy, Portugal, and certain markets inEastern Europe achieved pleasing growth. Based on an
increase in public sector projects, net sales in GreatBritain matched the previous year’s level. France andGermany recorded the most pronounced decreases.
The business with building and construction ad­hesives
showed a pleasing increase, driven mainly by the
Netherlands as well as certain markets in Eastern­Europe, and supported by the introduction of innovative products.
In the Americas, the main USA market suffered­particularly as a result of restrained investment. Aftersome years of subdued development, Canada showedsome growth again, and Brazil was able to build on its
success of the previous year.
The significant sales growth in Asia/Pacific is attributable in particular to projects in the segments ofhealthcare, industry, transport, and gastronomy. Australia, South Korea, and Southeast Asia contributed tothe positive result, whereas China and Japan were notable to achieve the levels of the previous year.

29

Innovative collections
For all our product lines, we have developed and introduced high-quality collections made using sustainable
materials with fashionable designs, wide-ranging color
palettes, and a variety of installation options.
In the linoleum business, we launched ‘marmoleum
cocoa’, a particularly sustainable collection that contains recycled linoleum from post-consumer material
for the first time and features scattered cocoa beanhusks to lend the floor covering a special surface­structure. The completely revamped high-quality ‘marmoleum solid’ collection was prepared for introduction in January 2024. It is climate-positive for the firsttime, available in sound-absorbing versions in discreet,modern, natural colors, and lends itself particularly to
an inviting ambience in the hotel, gastronomy, and­retail sectors.
In the vinyl business, the completely redesigned
collections of the ‘allura’ luxury vinyl tiles were launchedon the market in March. Along with new colors anddesigns, there is also a revised sound-absorbing selection with additional installation options. During theyear under review, with ‘surestep’, another innovativecollection with unique selling propositions was developed. This is set for launch in the first quarter of 2024.
In the textile business, the ‘tessera union’ carpet tile
collection was launched in September. It combines
three design families and is particularly suitable for use
in office environments. The soft natural tones can becomplemented as desired with accordingly aligned
vinyl floor coverings to create a pleasant workspace.
Since September, ‘flotex next’ has been available forthe first time, a loose-lay, high-performance Flotex
floor covering that can be printed with digital bespoke
designs according to customer’s desires and is particularly suitable for spaces in the hospitality and leisuresectors.
We opened a new showroom in the heart of Parisin June to present these latest innovations to end customers, architects, designers, distributors, and floor­fitters.

‘Strict resource management has
reduced the negative effects ofthe subdued market environment’
Jean-Michel Wins

Development of product lines
Most of the individual product lines reported a decline
in demand in line with the difficult market environment. Carpet tiles and needlefelt floor coverings
showed slight growth in a competitive environment.
This was attributable to the newly introduced collections and a catch-up effect regarding office spaces
in Great Britain. The other product lines reported­decreases in net sales to varying degrees.
Investments in efficiency andenvironmental added value
As well as revamping the product ranges, we invested
in technologies to make production processes more
efficient and support an optimized circular economy.
At the linoleum plant in Assendelft/Netherlands,­various technical upgrades were installed to improvethe efficiency of production processes. At the vinyl production sites in Coevorden/Netherlands and Reims/
France, capacity was expanded to allow used floor­coverings to be sorted, cut, and milled for reuse as recycled material. The switch to a new mist filter technology
for afterburners in Coevorden progressed as planned,
enabling significant reductions in gas consumption andCO2 emissions. As part of the finishing process in the
production of homogenous vinyl floor coverings, newly
installed equipment is aiding the handling of heavy rolls
and making work processes more efficient.
The expansion of the production plant for Flotex
floor coverings in the USA is progressing. The construction work for a new warehouse, the conversion of the
production building and the installation of the new
production equipment with two production lines for
digital printing will take place in 2024.
Focused implementation of sales andmarketing activities a priority in 2024
At present, there is no sign of an imminent recovery inthe construction industry. Attractive products and services, improved product availability and reliable supply
quality allied with proximity to the customer will be
key success factors in the present market environment.
Our focus will be on targeted implementation of thesales and marketing activities initiated.
In a sustained tense environment, it remains crucial
to deploy our funds and resources in an entrepreneurial
and focused manner and to continue to react quickly
and flexibly to changing market conditions.

30

FORBO ANNUAL REPORT 2023 – ACTIVITY REPORTCIRCULAR FLOORING
SOLUTIONS
Forbo floor coverings fuse functionality and high product quality with innovative
design. They enhance interiors in accordance with the needs of users. With every
new development, we strive to make our products and production processes moresustainable and meet the highest functional demands. We keep our finger on thepulse of technical innovation 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 on
proven, state-of-the-art production and digital printing technologies and combine trendy designs, broadcolor palettes, innovative embossed structures, and awide range of installation options using environmentally friendly materials. The new products developedin the year under review meet exacting demands andare suitable for a wide range of applications.
Climate positive linoleum
The newly launched ‘marmoleum cocoa’ collection ismade exclusively from natural raw materials and now
also contains a consistent proportion of recycled linoleum from post-consumer material recovered throughour ‘back to the floor’ program, which we offer in 13
countries. The recycled portion is subject to comprehensive health and safety checks prior to inclusion.
Thanks to this further step in the circular economy, thisoffer is climate positive for the first time. A scattering of
cocoa bean husks lends the linoleum a characteristic
surface structure. Natural and matte color shades givelarge spaces with modern décor a calming and cozyambience.
This novel combination of raw materials was adapted to create another linoleum collection, leading to acompletely new high-quality ‘marmoleum solid’ offering which was prepared for launch in January 2024.
The various design themes using natural and subtle
color combinations are available in sound-absorbing
finishes. They are very versatile in application in modern workplaces and large public spaces and are thepreferred choice for hotels, restaurants, and retail­outlets.
Loose-lay Flotex collection
Flotex is a distinctive and extremely hard-wearing­textile floor covering. The flock surface and robust­waterproof vinyl backing combine the properties ofelastic and textile floor coverings. The newly launched‘Design, trends, and­sustainability combined’‘Flotex next’ collection makes the product available forthe first time as a loose-lay option, which facilitates
rapid installing and saves time and cost at the end of
the product’s life cycle when it is replaced and recycled. Digital printing technology enables the creationof diverse individual and broad bespoke designs, customized to meet individual customer requirements.
The Flotex range is particularly well suited for flooringin highly frequented spaces in hospitality and leisurefacilities.
Innovative vinyl collections for specific­applications
In the year under review, two innovative vinyl collections ‘surestep’ and ‘onyx+’ were developed for s­ pecificapplications, and launched in the first quarter of 2024.
The range of ‘surestep’ safety floor coverings meetsthe highest standards of anti-slip flooring for the­entrance areas of buildings open to the public as wellas in the barefoot areas of wet rooms. A scattering ofparticles ensures non-slip safety underfoot for the
product’s entire life cycle. The modern designs and­colors available include new color tones as well as
wood- and stone-look finishes. Matte color tones werecreated especially for the care sector. The collection is
now also available in loos-lay option.
A combination of ‘surestep’ and ‘onyx+’ wall coverings are used in many areas of healthcare. Accordingly,
the ‘onyx+’ collection was extended with new design
options, ensuring that the two collections optimally
match.

31

The ‘onyx+’ vinyl wall coverings are used inhealthcare wet rooms

The ‘marmoleum cocoa’ linoleum collection contains linoleum from post-consumer material forthe first time and is climate positive

The ‘flotex next’ range is available with colors and bespoke designs tomeet individual requirements thanks to digital printing technology
and is now also offered as a loose-lay option

The range of ‘surestep’ vinyl safety floorings meet highrequirements for non-slip floor coverings

MOVEMENTSYSTEMS
Hygienically reliable
Drawing on our application-specific know-how, we workwith our customers to develop solutions designed to meetthe exact requirements of their process steps. These vary
according to the particular application, be it processing ofconfectionery, dough, dairy produce, fish, poultry, or seafood.
Coating materials with low surface tension ensure excellent
release properties. Hydrolysis-proof belts are resistant to oils,
fats, moisture, and bacteria. Additional sealing of belt edges
ensures the highest standards of hygiene and protects foodsfrom external contaminants.

34

FORBO ANNUAL REPORT 2023 – ACTIVITY REPORTLOWER LEVELS OF­CAPACITY UTILIZATIONIN PLANTS

Marc Deimling
Executive Vice President
Movement Systems‘The significant decrease in operational and investment
activity at our customers due to the tough economic
environment has posed a challenge in many areas. In
some of our key markets, such as the USA, Italy, and the
DACH region, we have seen declining net sales. The­associated decrease in volumes and higher personnel
cost due to inflation have had a considerable e­ ffect on
profitability and presented us with additional operational
challenges. For our customers, we have ­developed sustainable and application-specific belts, selectively set up
local service centers, modernized p­ roduction plants,
and made targeted investments in capacity expansion.’

The Movement Systems division generated net salesof CHF 378.7 million in the year under review (previous
year: CHF 415.2 million), which was equivalent to a
­decrease of 2.6% year-on-year in local currencies. Thevery negative currency effects led to a decline of 8.8%in the corporate currency. After years of growth,­demand in the globally important logistics customer
segment was very subdued. In addition, there was no
economic recovery in China, a key market for Movement Systems. The division accounted for 32.2% ofGroup net sales in 2023. Operating profit (EBIT) decreased by 18.0% to CHF 44.3 million (previous year:
CHF 54.0 million), which is attributable to the decline
in net sales, the decrease in volumes and resulting
under­utilization of capacity at plants, strong negative
currency effects, higher personnel cost due to inflation, and sustained high energy prices. These effects
were offset to some extent by sales price adjustments.
The EBIT margin declined by 1.3 percentage points to
11.7% (previous year: 13.0%).
Demand noticeably slower
A significant decline in demand was seen in the USA
and Europe in particular. Asia/Pacific achieved a pleasing growth in net sales. In local currencies, the sales
development was as follows: Europe – 2.9%, Americas– 9.0%, and Asia/Pacific + 6.6%.
In Europe, France, Spain, and Eastern Europe recorded a pleasing rise in net sales. Germany, Switzerland, Italy, Denmark, Great Britain, and the Netherlands
were experiencing net sales declines of varying degrees. Owing to the increasing global uncertainties,
the operational and investment activity of Movement
Systems’ customers has shown a marked slowdown
overall. This was especially evident in the main marketof Germany in the fourth quarter.
In the Americas, performance in the main market
USA was particularly affected by the logistics segment,with its above-average importance for the region as awhole. In addition, further optimizations to operatingprocesses aimed at achieving higher delivery capacity,and the extension of the corresponding service levels
are required. Canada and Mexico reported substantial
growth, with Mexico benefiting from the well-established local food industry.
In Asia/Pacific, all markets except South Korea
achieved growth. Well-established local entities such
as Japan, Australia, and India, as well as growth markets in Southeast Asia, made a positive contribution tothis success. After the pandemic-affected performanceof previous years, the main market of China saw some

35

growth, albeit at a low level as there was still no evidence of an economic recovery.
Varied development of segments
The different segments presented a varied sales picture. Activities in the logistics segment, which has abroad global base, remain very subdued and on a
downward trend, particularly plant engineering andconstruction in the e-commerce sector. Net sales ofprocessing belts for the food industry showed a slightrise in local currencies, especially in the dough processing industry. Business performance was at the previous year’s level overall in the industrial production,
raw material processing, textiles, paper and print, andsports treadmills segments.
Innovations for specificcustomer applications
Based on our expertise in the field, we developed
during the year under review tailored applications for
specific customers, offering them advantages in production and processing and enhanced efficiency.
In the Fullsan product line additional belt types
were introduced with various surface structures for use
in the food industry. Depending on the properties ofthe belt, they are suitable for the meat, poultry, andfish industry, for vegetable, fruit, and dough preparation as well as in dairies and cheesemaking.

‘Downturns in volumes havepresented us with operational
challenges and significantly
impaired profitability’
Marc Deimling

In the Transilon product line, two conveyor belt
types specifically designed with sustainability in mind
were developed for logistics applications. Both containtension members made of recyclate from PET bottles
and feature the AmpMiser coating that contributes toadditional energy savings. They are particularly suitable for parcel transport, high-speed conveyors, andluggage transportation after check-in at airports.
The Extremultus range features a high-performanceelastic belt designed primarily for the paper and packaging industry. It is a reliable component for factory
applications and can serve as a machine tape in letter
sorting machines.
A new hard-wearing Transtex processing belt wasdeveloped specially for moving agricultural produce,ensuring the reliable processing of fruit, vegetables,
fish, meat, and seafood in line with hygiene regulations.

Higher investments
We have invested in infrastructure, technology upgrades, increased efficiency, and capacity expansion at
many of our fabrication and production sites, as well as
in application-specific product developments.
At the production site in Pinghu/China, a new­production line for Transilon belts was commissioned.
The equipment was installed, and the first products
manufactured during the year under review. The
ramp-up of all planned production items will be completed in 2024.
The production site at Fukoroi/Japan is being completely renewed. During the year under review, theconversion of buildings and infrastructure took place,and a new dust-free production hall was built in readiness for the installation of the new production line. The
supply and assembly of the new coating machines willtake place in 2024.
At the fabrication plants in the USA and Slovakia,
new high-frequency welding machines for fabricatingroller shutters were installed. These allow seam-freewelding of overwidth items allied with greatly enhanced productivity. At the US plants, further camera-­
based product inspection systems were introduced toincrease efficiency in the quality assurance process,and the production site in Switzerland invested in­improved efficiency. Additional photovoltaic systems
were fitted at several sites.
The new service centers built during the year underreview have been increasing customer proximity in
Lyon/France for the local industrial production customers, in Vitoria/Spain for the local automotive industry and in Florida/USA for the local food industry.
Good delivery capacity and customer
proximity key for 2024
Economic development in the core markets for­Movement Systems will likely remain volatile for thepresent. The clear slowdown in Germany over the pastmonths and the subdued outlook for China demand
agility and flexibility to respond to local market andcustomer requirements. Service centers to support­local industries, good delivery capability optimallyaligned with sales and production planning, alongwith prudent resource management will, together, be
important success factors.
Key projects in 2024 are the qualification of products on the new production line in China, the assembly of the new coating machines in Japan, and the­addition to the Prolink plastic modular belts portfolioof a new series specifically for the production of­electric vehicles.

36

FORBO ANNUAL REPORT 2023 – ACTIVITY REPORTAPPLICATIONSPECIFIC BELT
­DEVELOPMENTS
Wherever drive forces are being transmitted and automated production
and conveying processes are running smoothly, Movement Systems is
usually not far away. Our solutions for a wide range of configurations anddemands in numerous industries are renowned for innovation, precision,
reliability, and cost-effectiveness. We draw on our know-how to stand out
as a competent partner in developing industry-specific and 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 the year under review.
Hygiene safety for the food industry
A huge variety of food products are carried by conveyor belts during manufacture, processing, and packaging, and the specifications of the conveyor belts andtheir surface coatings have to be just as varied to meetthe particular requirements in terms of quality,­hygiene, efficiency, and careful handling at all stages ofthe production process.
In the reporting year, three new high-quality belt
types were added to the homogenous Fullsan productline launched the previous year. Their properties ensure the highest level of hygiene for the food industry.
They are easy to clean, UVC resistant, and designed foruse at temperatures ranging from – 10 °C to + 70 °C
during all stages of processing.
A new belt with an inverted pyramid surface­structure for processing dough, vegetables, fruit, meat,
poultry, and fish is particularly suitable for carrying­unpackaged foodstuffs. It reduces the product contact
area and improves product release with no sticking. It
is resistant to hot water and therefore particularly­suitable for frequent cleaning.
Two further belt types with smooth surface structures are used especially for processing fruit and­vegetables, as well as in the production of cheese andother dairy products. They are particularly resistant tooils and grease.
A new robust Transtex processing belt was developed specially for application in agricultural harvesting. It is used particularly for handling fruit and vegeta-

bles, as well as in processing meat, fish, and seafood. A
smooth surface structure improves product grip andhas excellent oil and grease resistance.
Sustainable and energy-saving
logistics applications
Two especially sustainable belt types for logistics applications were developed for the Transilon product line.
They are both antistatic, contain a low-noise woven
fabric, and have tension members made of PET recyclate. They are flame retardant and have an AmpMiser
coating, which achieves up to 50% savings in operating energy.
One of the belts has a surface structure with longitudinal grooves. It is suitable for use in high-speed­production lines as an accelerator, cycle or brake belt,
or as a pre-sorting conveyor.
The second belt, with a smooth surface coating,
was developed specially for conveying luggage after
check-in at airports. It is also used in specific applications in parcel transport systems, where it is used bylogistics service providers for horizontal transport or asa collecting or accumulating conveyor.

‘Belt construction contributes
to sustainability’37

Fullsan belt with smooth surface structure forprocessing vegetables and fruit

Fullsan belt with inverted pyramid surface structure for the
dough-processing industry

Transilon belt for logistics applications inhigh-speed lines

Transilon belt for luggage transport after check-in at airports

ORGANIZATION
Executive BoardGroup structure
Board of Directors

40
42
44

40

FORBO ANNUAL REPORT 2023 – ORGANIZATIONEXECUTIVE BOARD

Jean-Michel Wins, Andreas Jaeger, Jens Fankhänel, Marc Deimling

41

Jens
Fankhänel

AndreasJaegerJean-Michel
Wins

Marc
Deimling

Chief Executive Officer

Chief Financial Officer

Executive Vice President
Flooring Systems

Executive Vice President
Movement Systems

Jens Fankhänel was born in1965 and is a German citizen.
He studied at the University ofChemnitz in Germany andgraduated in electronicengineering, specializing in
automation technology andtechnical cybernetics. In 1994,
he entered professional life at
io-Consultants in Germany,first as a Project Manager andlater as Director and Business
Unit Manager Consulting andEngineering. After eight years,
he moved to Swisslog, where
he was Managing Director
ANZAC from 2002 to 2005. He
then worked for DematicGmbH in Germany as CEO of
its ­Central European Hub from2005 to 2008, at which point
he returned to Swisslog
Holding AG for just over three
years, holding the post ofManaging Director WDS
Central Europe. Since 2011, he
has worked at Kardex Holding
AG in Switzerland, until theend of 2018 he was Head
Kardex Remstar Division, andhe has been CEO of Kardex
Holding AG since 2016. Jens
Fankhänel was a member ofthe Board of Directors of Forbo
Holding Ltd from April 2022
until March 2023. He wasappointed CEO of the ForboGroup with effect frombeginning of March 2023, andtherefore retired from theBoard of Directors accordingly
at the Ordinary General
Meeting 2023.

Andreas Jaeger, born in 1972,
is a Swiss citizen. He has adegree in Business Administration from the University ofApplied Sciences in Zurich andan Executive Master’s inEuropean and International
Business Law from the
University of St. Gallen. He is
also a certified public
accountant. He began his
professional career as anaccountant at PricewaterhouseCoopers in 1998 andwas promoted 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 in2008 took on the role of Headof Corporate Reporting. From2012 to 2016, he was Chief
Financial Officer at Holcim in
Ecuador. Back in Switzerland,
he worked as Head ofCorporate Controlling at theGeberit Group from 2016 until
the end of 2020. Andreas
Jaeger joined the Forbo Groupin January 2021 as Chief
Financial Officer and amember of the Executive
Board.

Jean-Michel Wins was born in1967 and is a Belgian as well as
German citizen. He studiedbusiness administration andlanguages at the IPET in
Nivelles, Belgium, and began
his professional career inGermany at Calberson GmbH,
where he held various
specialist functions. He thenmoved to ­Simut Sicherheit
GmbH for two years, where he
was in charge of sales andmarketing. From 1992 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 he switched to Grammer
AG, headquartered inGermany, where he held anumber of international salesand ­se­nior management
positions; in 2009 he wasappoin­ted Vice President
responsible for the Offroad
Seating ­Business Unit. As amember 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 in1970 and is a German citizen.
He holds a degree in economics from the WestphalianWilhelm University in Münster,Germany, and launched his
professional career as assistantto 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 theareas of distribution, projectplanning, project management, production, after-sales,and marketing. He was thenChief Executive Officer at TMS
Turnkey Manufacturing
Solutions GmbH in Austria
until the end of 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 memberof the Executive Board inJanuary 2018.

The auditors reviewed theactivities at other companies.

42

FORBO ANNUAL REPORT 2023 – ORGANIZATIONGROUP STRUCTURE
Forbo Holding Ltd, the parent company of the Forbo Group, is a limited
company under Swiss Law. It is headquartered in Baar and listed on the
SIX Swiss Exchange in Switzerland. It holds investments directly or indirectlyin the companies listed as of page 162.
The top leadership is assumed by the Board of
Directors, which is advised by four standing committees in preparation for decisions. As a basic principle,
decisions are made collectively by the Board as awhole.
The committees deal with clearly defined topics
of overriding importance and have a mainly advisory
and monitoring role.
The CEO is the Chairman of the Executive Board, towhich both Executive Vice Presidents of the twodivisions and the CFO belong. The Group functions
responsible for coordinating and implementing
Group-wide decisions report to the CEO or the CFO.
The two globally operating divisions are structured
according to sales region on the one hand (Europe,
the Americas, and Asia/Pacific) and, on the other,product lines which are responsible for the development, production, and supply of the respective
product portfolios.

43

AFC Audit and Finance Committee

Board of Directors(AFC / HRNC / RC / SSC)

HRNC Human Resources and Nomination Committee

Chairman of the Board of Directors

RC Remuneration Committee
SSC Strategy and Sustainability Committee

Board of Directors OfficeInternal Audit
Compliance

Chief Executive Officer

Strategy / M & A /Sustainability
Corporate Development &Investor Relations
Corporate HR &Communications

Executive Vice President
Flooring Systems

Executive Vice President
Movement Systems

Chief Financial Officer

Northern/Central/Eastern
EuropeEurope/Middle East/Africa

Corporate Controlling
and Reporting

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

Southern Europe/
Middle East/Africa

Building and Construction
Adhesives

MarketingOperational Areas

Finance and IT

Business Development andMarketing

Human Resources

Finance and IT
Human Resources

Member of the
Executive Board

44

FORBO ANNUAL REPORT 2023 – ORGANIZATIONBOARD OF DIRECTORS

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

This
E. Schneider

MichaelPieperDr. Peter
Altorfer

ChairmanVice Chairman andindependent1) member

Vice Chairman andindependent1) member

Owner of Artemis Holding AG, Hergiswil

Legal advisor at the law firm Wenger &Vieli AG, Zurich

Chairman of the Management Board of
Artemis Group, Hergiswil
Board of Directors of Franke Holding AG,
Aarburg
Member of the Board of Directors ofvarious Artemis and Franke subsidiaries
worldwide
Member of the Board of Directors ofArbonia AG, Arbon
Member of the Board of Directors ofAutoneum Holding AG, Winterthur
Member of the Board of Directors ofBergos AG, Zurich
Member of the Supervisory Board ofDuravit AG, Hornberg, Germany
Member of the Board of Directors ofReppisch-Werke AG, Dietikon

Member of the Board of Directors of
Schweizerische Cement-Industrie-­
Aktien­gesellschaft, Rapperswil-JonaVice Chairman of the Board of Directors ofPrivatbank 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

45

Claudia ConinxKaczynski

Dr. Eveline
Saupper

Vincent
StuderIndependent1) member

Independent1) member

Independent1) member

Member of the Board of Directors of
Swisscontent AG, Zurich

Member of the Board of Directors ofClariant AG, Muttenz

Member of the Board of Directors of
TX Group AG, Zurich

Member of the Board of Directors ofGeorg Fischer AG, Schaffhausen

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
20 Minutes AG, Zurich

Member of the Board of Directors of
Staubli Holding AG, Pfaffikon

Member of the Board of Directors of
Awina AG, Zurich

Member of the Board of Directors of
Tourismus Savognin Bivio Albula AG,
Savognin

Member of other Boards of Trustees

Member of the Board of Directors of BankEEK AG, Berne
Member of other Boards of Directors or
Boards of Trustees

Further Foundation Board mandates

The auditors reviewed theactivities at other companies.
Independent as definedin the ‘Swiss Code of Best
Practice for Corporate
Governance’

1)THE FORBO SHARE

48

FORBO ANNUAL REPORT 2023 – THE FORBO SHARE

SHARE
After recording their worst performance since 2008 in
2022, the global stock markets started the 2023 trading year much more positively. The positive beginning
in January fuelled hopes among many investors thatthe worst might be over. However, by February theprevious year’s anxieties about the consequences of
the war in Ukraine and high rates of inflation had­already begun to dominate again. Then, in March,these anxieties were added to by fears of a worldwide
banking crisis. Nevertheless, many international stock
markets finished the first half-year on the plus side. The
second half of the year saw a steady increase in confidence regarding an end to the cycle of interest rate
hikes. However, the economic recovery in China still
failed to materialize. In the fourth quarter, geopoliticaluncertainties increased once again due to the war in
the Middle East.

The Swiss Performance Index (SPI) temporarily
reached a high of around +7% in January 2023 before
performance fell back into negative terrain in midMarch. The renewed rise from the end of March saw
the SPI peak at around +11% in mid-May. This was­followed by a negative trend and before the end of
October the SPI was back below the level seen at thestart of the year. It made up some ground in the final
weeks of 2023, finishing at 14,571 points – a year-onyear increase of 6.1%.
Overall, the Forbo share price followed a similarcourse to the SPI, though the starting point for its performance was higher than that of the SPI. In mid-June,
the Forbo share reached a plus of around +27%. In thesecond half of the year it lost considerable ground,closing at CHF 1,054 at year-end (down – 3.1% on theprevious year).

The Forbo share in comparison with the SPIForbo share
SPI
2,250

600%

1,900
380%

1,550
1,200

160%

850
500

– 60%

150
2006

2023

49

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

2023
number
1,485,000

2022
number
1,485,000

2021
number
1,650,000

2020
number
1,650,000

2019
number
1,650,000

1,407,356
056,225
21,4191,412,760
050,821
21,4191,424,870
150,62553,086
21,4191,579,235
049,346
21,4191,601,315
027,266
21,419CHF
148,500

CHF
148,500

CHF
165,000

CHF
165,000

CHF
165,000

140,736
0
5,623
2,142

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

CHF
393
72,6
254)
1.84) 5)2.64) 5)
34

CHF
389
71.8
23
1.25)
2.35)
32

CHF
339
91.6
25
1.25)
1.75)
27

CHF
429
66.6
20
1.25)
1.95)
30

CHF
422
86.3
23
1.35)
1.75)
27

CHF
1,386
957
1,054
2,058
1,421
1,565

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

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 2023, 2022, 2021, 2020 and 2019: CHF 0.10.
2) Based on the weighted average of the number of shares as set out innote 11 ‘Earnings per share’ on page 142 of the financial report.
3) See note 11 ‘Earnings per share’ on page 142 of the financial report.
4) Proposal of the Board of Directors to the 2024 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.

SUSTAINABILITYREPORT
Introduction52
Foundation55
Description of the business models
58
Environment61
Social68
Governance78

52

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTINTRODUCTION
Consistently sustainable

The sustainable production of environmentallyfriendly products has long been an integral part ofour strategy. In the coming years, we will continue to
implement further optimizations in this regard along
the entire value chain and expand our productportfolio with additional environmentally friendly
products.

‘Committed to sustainability
for almost 100 years’

Sustainability has a long tradition at Forbo. We havebeen producing linoleum, a biodegradable floor covering made almost exclusively from renewable raw­materials, since 1928. Our linoleum has a negative CO2balance (cradle to gate) and is, therefore, climate-positive without purchasing compensation certificates.
Over the past 20 years, we have reduced our CO2
emissions (Scope 1 and 2) per square meter of flooringproduced by 53%. We have continuously increased the
proportion of recycled raw materials in our floor coverings. We are now also developing belts with recycled
PET content. With a specially coated conveyor belt, we
enable our customers to save up to 50% of energy intheir applications.
With our environmentally friendly and durable products, we can offer our customers a wide range of solutions and actively support them in their sustainability
ambitions.
The preservation of the environment and the­generation of ecological added value are essential­decision-making factors in our developments and investments. We continuously optimize our production
processes to reduce emissions, water, and energy­consumption, reuse heat generated in the production
process, and reduce or recycle waste material. In thisway, we actively contribute to minimizing the impactof our business activities on the environment.
Acting in an economically sustainable and responsible manner is of central importance to us. Our fundamental business principles and values, based on the‘Forbo Way to Win’ and the Code of Conduct, support
our ambition to create long-term added value for all
stakeholders.
We will resolutely pursue our efforts and continue
to invest in optimization projects that will enable us
and our society to have a more sustainable future.
The Board of Directors of Forbo Holding Ltd approved the 2023 Sustainability Report.

This E. Schneider
Chairman of theBoard of Directors

Jens Fankhänel
Chief Executive Officer

KEY ACHIEVEMENTS/
HIGHLIGHTS 2023
94%
TÜV Rheinland has certified that
the AmpMiser conveyor belt canachieve energy savings of up to 50%

36%

Flooring Systems has reduced
its Scope 1 and 2 CO₂ emissions
by 36% since 2019

Flooring Systems’ ‘back to the floor
program’ (take-back and recyclingof floor coverings) i­ntroduced in
13 countries

50%

The average proportion of natural,
recycled, or abundant materials in
our floor coverings is 50%

In Flooring Systems, 94%of the electricity used comesfrom sustainable sources

Our linoleum is no longer
just climate-neutral, but now
climate-positive (cradle to gate)

The newly developed Transilon
conveyor belt ‘ecofiber’ uses
a tension member material
made of recycled PET

Movement Systems has­installed numerous photo­voltaic installations at several
plants54

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Environmentally friendly
products

Specialized production
know-how

As a leading producer of floor coverings, building andconstruction adhesives, as well as belts for powertransmission and lightweight conveyor belt technology,
with an international network of 25 production sites
and 6 fabrication centers, we offer exceptionally environmentally friendly and durable products in both divisions. This means we can offer our customers a wide
range of solutions in all regions and actively support
them in their sustainability ambitions:

As a leading manufacturer, we develop and produce alarge part of our entire product portfolio ourselves. We
have an in-depth understanding of a wide range ofcustomer needs. This enables us to continually develop innovations with corresponding added value. We
have highly specific expertise in development andproduction, which enables us to offer environmentallyfriendly products with unique selling propositions. In
our production processes we focus on reducing emissions as well as water and energy consumption,­reusing heat generated, and reducing or recycling
waste material. In this way, we actively contribute to
reducing the impact of our business activities on theenvironment.

Flooring Systems– Forbo has been producing linoleum, a floor
covering that consists of more than 97%
renewable raw materials and is biodegradable,
since 1928. Today, our linoleum not only
combines ecological values with modern
design, but is also carbon negative (cradle togate), without offsetting. With a market share ofaround 70%, Flooring Systems is the global
market leader in linoleum.
– Vinyl floor coverings acquire their elasticity,
pliability, and flexibility from plasticizers. We use
phthalate-free plasticizers of the latest generation. In 2023, the recycled content across ourentire vinyl product portfolio increased to 18%.
The Colorex Plus collection even contains 69%
recycled content. Our homogeneous vinyl floor
coverings are also particularly suitable forrecycling at the end of their life cycle and thus
contribute to the circular economy.
– The fibers used for Tessera Create Space 1 carpet
tiles are produced using ECONYL® yarn, which ismade from 100% recycled materials. In 2023, therecycled content across our entire textile
product portfolio was 45%.
– The raw materials used to produce our floor
coverings consist of 50% natural, recycled, orabundant materials.
Movement Systems– With our Sustainable Performance belts, we
actively support customers in reducing energy
consumption when operating their systems. Thesebelts also allow for reduced-noise operation,
which benefits their employees.
– Our BioBelt is the world’s first conveyor belt thatconsists of at least 20% renewable raw materials
and is comparable to standard belts in terms of its
physical and dynamic properties.
– The AmpMiser conveyor belt significantly reduces
the friction that occurs when operating thesystems, which allows customers to achieve up to
50% savings in operating energy.
– We have developed conveyor and process belts
with tension members made of recycled PET.

>97%

of our linoleum is made fromrenewable raw materials

45%

is the average recycled content
in our textile floor coverings

55

FOUNDATIONGroup Sustainability Report
This is the first Sustainability Report Forbo has publishedthat covers the activities of the Group as a whole. Our two
divisions have been publishing independent Sustainability
Reports for several years, with Flooring Systems doing sosince 2005. The content of the reports has been continually
expanded over time.

The divisions, with their various products and services,
operate in different business areas and their respective
stakeholders have different requirements. Therefore,
they will continue to publish separate, detailed Sustainability Reports in addition to the Group Sustainability Report. In this way, we can address the transparency demands of all stakeholders.
The present sustainability report meets the legal
requirements of general reporting on non-financial
matters (Article 964a-c of the Swiss Code of Obligations) as well as due diligence and reporting (Article
964j-l of the Swiss Code of Obligations). At the sametime, the report reflects our concepts and ambitions inrelation to ESG – Environmental, Social, and Governance. The latter aspect is dealt with in the separate
Corporate Governance report (starting on page 81 of
this Annual Report).
We aim to anticipate new reporting requirements
at an early stage. In addition, we are continually working to expand our reporting to communicate our sustainability efforts, successes, and ambitions to all stakeholders.

Sustainability Reportsof our two divisions
This standalone report does not address all of the sustainability aspects discussed by our two divisions intheir Sustainability Reports. Both reports containing
detailed information can be found on our website at
the following link: www.forbo.com � Sustainability

Sustainability
Reports

Code of Conduct
Likewise, this standalone report does not address all
aspects of our Code of Conduct. The full Code of Conduct can be found on our website at the following link:www.forbo.com � Sustainability
Code of Conduct

56

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Organization

Report scope

The Strategy and Sustainability Committee of theBoard of Directors (SSC) advises and supports theBoard of Directors in the strategic development of thecompany on the one hand and, on the other hand, the
SSC suggests to the Board of Directors priorities for­relevant sustainability issues in the areas of Environmental, Social, and Governance (ESG).
The SSC meets at least twice a year. The Chairmanof the SSC reports at the meetings of the Board of Directors on the activities of the committee and theopinions and recommendations of the SSC.
The Executive Board implements the priorities defined by the Board of Directors. It addresses relevant
sustainability issues at its regular Executive Board
meetings, including the respective sustainability­strategies, ambitions, and activities proposed by thedivisions.
The Corporate Sustainability Officer actively leads
and manages the various sustainability initiatives andactivities of the divisions and the Group. He reports directly to the Chief Executive Officer.
In each of the two divisions, divisional management forms the steering committee for sustainability
issues. Both divisions each have a Sustainability Officer.

Unless otherwise stated, the environmental data published in this report applies to all Flooring Systems’ production sites for floor coverings and building and construction adhesives and the production sites ofMovement Systems, which together account for approximately 95% of the production volume, as well as
the fabrication centers. The sales offices and warehouses of our two divisions were not included. The units included in the scope of the report are considered to be
the most significant in terms of the environmental impact of our business.
Unless otherwise stated, the data published in the Social section of this report covers all our locations, including sales offices and warehouses.
Movement Systems’ joint venture companies in Brazil
and Chile were not included.

Materiality analysis
To align our ambitions in the area of sustainability withthe expectations of our stakeholders, both divisions
regularly conduct materiality analyses.
The key topic areas are identified as part of an evaluation of the significance of individual sustainability
issues from the perspective of various stakeholders
and in the course of an assessment of the impact ofour business activities on the environment and society.
The materiality analyses of the two divisions are assessed and consolidated at Group level. The most important substantive focus topics are:
– Responsible sourcing of sustainable raw
materials for sustainable products and services– Resource and energy efficiency– Quality of products and services– Transparency in environmental matters– Health and safety of employees
This report shows how we address these and othertopic areas.

Standards used and­memberships/partnerships
This report was prepared in reference to the guidelinesof the internationally established standard of the Global Reporting Initiative (GRI).
CO2 emissions are calculated in accordance withthe standards of the Greenhouse Gas Protocol, theglobal standard for calculating greenhouse gas emissions.
The Life Cycle Assessments (LCA) of Flooring Systems were developed in the year 2000 in cooperation
with Leiden University in the Netherlands. Today’s LCA
calculations comply with international standards.
Flooring Systems’ Environmental Product Declarations(EPD) conform to the internationally standardized format and are verified by UL Environment. The EPDs are
based on so-called Product Category Rules (PCR) defined in EN 15804, EN 16810, and ISO 14025 standards.
The LCA calculations and EPDs guarantee full transparency regarding the life cycle of the products.
Our quality management system according to ISO
9001 is certified at all of Flooring Systems’ major production sites. The main production sites of Flooring
Systems and numerous sites of Movement Systems
have ISO 14001 environmental management certification. Several sites of Movement Systems have EN ISO
50001 certification (energy management). Flooring
Systems has implemented SA8000 (Social Responsibility Management System) in its production facilities.
Both divisions maintain various memberships andpartnerships. They each report on this in detail in theirrespective sustainability reports.

57

Flooring Systems and Movement Systems contribute to the following Sustainable Development Goals of
the United Nations (The 17 Global Goals): 3 Good
Health and Well-Being; 5 Gender Equality; 8 Decent
Work and Economic Growth; 9 Industry, Innovation
and Infrastructure; 10 Reduced Inequalities; 11 Sustainable Cities and Communities; 12 Responsible Consumption and Production; 13 Climate Action; 15 Lifeon Land; 17 Partnerships for the Goals.

Data collection
We have been collecting various environmental andsocial data for many years. The collection of relevant
data has been gradually expanded in recent years. For
example, in 2023, Scope 3 emissions data from thebuilding and construction adhesives business and theMovement Systems division were collected for the firsttime.
When preparing this report, we take the greatest
possible care with regard to data quality. Despite all
efforts to ensure accuracy and completeness, inaccuracies cannot be completely ruled out.

58

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTDESCRIPTION OF THE
BUSINESS MODELS
Two well-positioned divisions
Forbo is a leading producer of floor coverings, building andconstruction adhesives, as well as power transmission and conveyor belt solutions. Flooring Systems and Movement Systems
occupy leading market positions. They operate in various business areas with their products and services and serve customers in different segments.

Global reach

Products, markets,
Forbo operates worldwide. The Group’s global reach and sales channels
means that it is close to attractive markets, making Forbo the first choice as a local partner for customers thathave similar global requirements.
Flooring Systems has 15 production facilities in 7
countries and sales companies in 27 countries – withsales organizations in Europe, North, Central, andSouth America, as well as Asia/Pacific.
Movement Systems has 10 production facilities and6 fabrication centers in 9 countries as well as sales organizations in 32 countries – with over 300 sales andservice points worldwide.

Both divisions maintain direct relationships with theircustomers. The relationships are often long term in­nature.
Flooring Systems
In the direct business of Flooring Systems, we can position our range of floor coverings for commercial use
directly to the relevant decision-makers (architects,
project planners, general contractors, builders, etc.).
There is also an international network of specialized
distributors.
The product portfolio includes environmentallyfriendly and natural linoleum, high-quality homogeneous and heterogeneous vinyl floor coverings, ESD
flooring solutions, entrance flooring systems, carpet
tiles, needle felt, and Flotex, the washable high-tech
textile flooring. We offer our floor coverings in different
formats and with a wide range of installation options.
Under the brand name Eurocol we also produce
ready-made adhesives for flooring installations, parquet, and ceramic tiles, as well as leveling compounds
for the construction industry and liquid floors, sold primarily through a network of distributors.

59

Two
divisions

Movement
Systems

Flooring
Systems

Movement Systems
Movement Systems has direct contact with OEMs andend customers around the globe.
Movement Systems holds a leading position worldwide as a provider of high-quality conveyor and processing belts, plastic modular belts, first-class powertransmission belts, as well as timing and flat belts
made from synthetic materials. These products are
known under the brand name Siegling.
They are used in a wide range of applications in industry, trade, and logistics, including conveyor andprocessing belts in the food industry and in various
logistics applications, as treadmill belts in fitness studios, and flat belts in mail distribution centers.

Differentiating factors
Positioning of Flooring Systems
With our distribution model and the associated accessto decision-makers, we can optimally position our offering. We maintain long-term customer relationships.
Our in-depth market knowledge and close customer
relationships mean that we understand the needs ofboth customers and the market. We develop innovative, design-oriented, high-quality, and sustainableproducts with unique selling propositions. We have adiversified customer base in various industries, segments, and regions.

60

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Positioning of Movement Systems
We have distinctive and broad application expertise as
well as an in-depth understanding of a wide range ofcustomer needs. This enables us to regularly develop
innovations with corresponding added value. Our direct access to OEMs and end customers enables us todevelop tailored solutions and promote repeat replacement business. We serve our customers globallyand locally through over 300 sales and service points
around the globe. We have a broadly diversified customer base in all regions, covering a wide variety ofindustries and segments.
Sustainability – a crucial success factor
An ever-increasing number of our customers at Flooring Systems have engaged us in an intensive dialog
about sustainable solutions for many years. In Movement Systems we are also noticing increasing demand
for topics related to sustainability. The dialog with ourcustomers allows us to align our offering not only tocurrent but also to anticipated demand.
We can also rely on our specialized production
know-how.

61

ENVIRONMENT
The responsible use of resources is very important tous. We are committed to protecting the environment
and investing in optimization projects that contributeto a more sustainable future for us and society at large.

Both divisions offer a series of environmentally friendly
products. This enables our customers to operate moresustainably in their activities. Together we are contributing to a more sustainable use of resources.
Protection of the environment and the generationof environmental added value are important factors inour development and investment decisions. We work
constantly on optimizing our production processes toreduce emissions as well as water and energy consumption, reuse heat generated in the production process, and reduce or recycle waste material. In this way,
we actively contribute to reducing the impact of ourbusiness activities on the environment.

Environmental concepts ofour divisions
Raw materials used in production companies have amajor influence on the environmental pollution emitted. We are constantly developing new products andoptimizing existing products to improve properties andminimize the ecological footprint. We also work closelywith our suppliers.

The use of natural resources that are renewable andregenerative is our preferred solution. We also attach
great importance to the use of recycled raw materials,
which means we actively contribute to the circular
economy.
We want to consistently reduce the proportion of
non-renewable raw materials and virgin raw materials.
In addition, we have already set up systems in various countries for taking back end-of-life products.
Where possible, we separate and reuse the materials
we take back.
The development and manufacture of high-quality
products is one of our key success factors. The production technologies deployed at our 25 production sites
have a decisive impact on the environment.
We reuse resources wherever possible, for example
heat generated in the production process, water consumed, and scrap material.
When purchasing energy, we rely largely on renewable resources, but we also produce renewable energy
ourselves at various locations.
We will systematically pursue these efforts and continue to invest in optimization projects that contributeto a more sustainable future for us and for society atlarge.

62

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

We measure and document our progress and act
transparently in publishing the data. Our past progressin the field of sustainability confirms the effectivenessof our concepts and associated actions.

Greenhouse gas emissions
The CO₂ emissions recorded below were calculated in accordance with the criteria of the Greenhouse Gas Protocol, the global standard for calculating greenhouse gas emissions.
Scopes 1, 2, and 3
Scope 1 includes emissions generated directly within the company. Scope 2 records indirectly generated emissions that arise from purchased energy. Scope 3 covers all other indirect emissions in the upstream and downstream value chain (e.g., emissions occurring from the production of raw materials we purchase, from the use of
our products during their service life, from the disposal of our products at the end of their service life, etc.).
Greenhouse gas emissions are expressed in tonnes of carbon dioxide equivalents (CO2e), i.e. the amount in
tonnes of CO2 emissions with the same warming potential as one tonne of another greenhouse gas.
Greenhouse gas emission intensity
Greenhouse gas emission intensity measures Scope 1 and 2 CO2 emissions (in kilograms) per square meter offlooring produced or per square meter of belt produced.
Greenhouse gas emission intensity, Scope 1 and 2
Kilograms
Emissions per square meter of flooring produced
Emissions per square meter of belt produced

2023

2022

0.77
6.91

0.79
not
­comparable

Change overprevious year
– 3%

Flooring Systems was able to further reduce greenhouse gas emission intensity in 2023 (–3%). Over the last
20 years, there has been a 53% decrease. The greenhouse gas emission intensity of the production of building and construction adhesives is not taken into account because it is relatively low, owing to the manufacturing process. In 2023, Movement Systems adapted data collection for Scope 1 and 2 emissions to international standards, which is why no comparison with the previous year is available.

Consolidated greenhouse gas emissions
Scope 1 and 2 emissions
TonnesFlooring Systems
Movement Systems

2023

2022

34,46333,840Total

68,30341,368not­comparable
not­comparable

Flooring Systems further reduced its Scope 1 and 2 emissions (–17%). In 2023, Movement Systems adapted
data collection for Scope 1 and 2 emissions to international standards, which is why no comparison with theprevious year is available.

Change overprevious year
– 17%

63

Scope 3 emissions
TonnesFlooring Systems

2023

2022

388,173

Movement Systems

81,157

not­comparable
not­comparable
not­comparable

Total

469,330

Change overprevious year

The methods for calculating Scope 3 emissions were adjusted by Flooring Systems in 2023. In addition,
Scope 3 emissions resulting from the building and construction adhesives business were recorded for the
first time by Flooring Systems. Movement Systems calculated Scope 3 emissions for the first time in 2023.
Accordingly, no comparison with the previous year is available.

EnergyEnergy intensity
Energy intensity measures the energy required (in megajoules) per square meter of flooring produced or per
square meter of belt produced.
Energy intensity
Megajoules
Energy requirement per square meter of flooring produced
Energy requirement per square meter of belt produced

2023

2022

19.7
75.4

20.0
not
­comparable

Change overprevious year
– 2%

Flooring Systems was able to further reduce energy intensity in 2023 (–2%). The energy intensity of the production of building and construction adhesives is not taken into account because it is relatively low, owing
to the manufacturing process. Movement Systems adjusted the calculation in 2023, which is why no comparison with the previous year is available.

Energy consumption and energy mix
Energy consumption and energy mix
Gigajoules
Flooring Systems
Electricity from renewable sources
Electricity from non-renewable sources
Gas
BiogasDiesel and oil
District heating and self-generated electricity
Total
Movement Systems
Electricity from renewable sources
Electricity from non-renewable sources
Gas
BiogasDiesel and oil
District heating and self-generated electricity
Total

2023

2022

Change overprevious year

303,608
19,044554,375
10,4379,860
5,477
902,801

350,294
19,303
674,456
10,221
11,7934,356
1,070,423

– 13%
– 1%
– 18%
2%
– 16%
26%
– 16%

31,412
107,406
208,139–
23,262–
370,219

26,137
120,978
236,305–
18,541–
401,961

20%
– 11%
– 12%
–
25%
–
– 8%

Around 94% of the electricity used at Flooring Systems production sites comes from renewable sources.
Movement Systems slightly increased the comparatively low share of electricity from renewable sources in
2023.

64

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTWater
The manufacturing processes for our products in bothdivisions are not water-intensive. An exception is thebuilding and construction adhesives business, wherewater is a component of many products. We are continually working to reduce our water consumption.

Many locations have closed-circuit water systems. Individual raw materials that we purchase from our suppliers require water for manufacture, for example during
the growth of natural raw materials.
Movement Systems develops belts that require lesswater to clean during use. In this way, we actively support our customers in their ambitions to use less water.

Scrap material
Scrap material and waste
Scrap material and waste
TonnesFlooring Systems
Recycled
Disposed
Total
Movement Systems
Recycled
Disposed
Total

2023

2022

Change overprevious year

23,3087,215
30,523

23,4106,853
30,263

– 0%
5%
1%

828
3,769
4,597

106
5,201
5,307

> 100%– 28%– 14%

An important goal of all of our production facilities is the reduction of scrap material and waste. We have also
developed processes to reuse such materials to some extent and thus minimize consumption. At Flooring
Systems, around 76% of scrap material and waste is recycled. At Movement Systems the figure is around 18%.
We are also actively committed to the circular economy system. For further information, see the section‘Circular economy’ on page 65 of this report.

Raw materials
Raw materials used in production companies have amajor influence on the environmental pollution emitted. The use of natural resources that are renewable
and can be harvested annually is therefore our pre-ferred solution. The use of recycled raw materials is also
becoming increasingly important, however. We areconstantly developing new products and optimizing
existing products to improve properties and minimize
the environmental footprint. We also work closely with
our suppliers.

65

Circular economy
Product development
and design

Raw materials

Recycling
Production

Consumption,
reuse, repair

A circular economy can be defined as a system that
focuses on the reusability of products and raw materials and the use of renewable resources, thus minimizing the loss of value in the overall system. In order tomake this happen, the circular economy requires focus
on the design of the product to allow better reuse, repair in the reuse phase, and the recycling of installation
waste and end-of-life products. In the circular economy model there are two loops, each operating in its
own area – one with technical materials and the otherwith bio-based materials. Bio-based materials are materials based on renewable raw materials. They often
follow the strategies of the technical material loop,
considering that bio-based products can also be redesigned, reused, and recycled.

Distribution

With the natural raw materials we use and the recycled raw materials we employ, we actively contributeto the circular economy. We want to consistently reduce the proportion of non-renewable raw materials
and virgin raw materials. Also important are homogeneous products (such as our homogeneous flooring,
our plastic modular belts, and our homogeneous
belts) because they are easier to recycle.
In addition, Flooring Systems has already established processes for taking back end-of-life products invarious countries as part of the Back to the Floor recycling program. In 2023, we took back 250 tonnes ofmaterial. Where possible, we separate and reuse thematerials we take back. ‘going round, moving forward’is the guiding principle of Flooring Systems’ sustainability approach. This is linked to the determination toalign our activities even more closely with a circular
economy.

66

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Significant
environmental risks
The most significant environmental risks arise in the
production of our raw materials, to a much lesser degree during the processing of raw materials in the
manufacture of our products, and to a significant degree again when our products reach the end of theirlife cycle.
As detailed in this report, we reduce associated risks
through many initiatives across the value chain.

Ambitions
Our ambitions in the area of sustainability concern improvements in all relevant areas of our company, in the
upstream value chain, during usage, and at the end of
the life cycle of our products. We constantly face up to
the changing challenges in all areas.

67

Goals
We are committed to pursuing our efforts with the same resolve thathas already seen both divisions achieve considerable success. We have set
ourselves the following goals:

To continue building on our track record in
reducing CO2 emissions

Over the last 20 years, we have reduced our CO2
emissions (Scope 1 and 2) per square meter of flooring produced by 53%.

To significantly increase the take-back of
end-of-life products
We have already established processes in a numberof countries for taking back end-of-life products.

To be a promoter of the circular economy
We want to consistently reduce the proportion of
non-renewable and non-recycled raw materials.

To make our contribution to achieving asociety with net-zero greenhouse gas
emissions
We aim to achieve this goal through our own efforts and, as much as possible, avoid purchasing
offset certificates.

To further increase the proportion of recycled materials
The average proportion of natural, recycled, or abundant materials in our floor coverings is already 50%.

68

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTSOCIALAs a global company, social responsibility and acting
morally and within the law are fundamental principles
for Forbo. Our corporate culture with the Code of­Conduct and the Forbo values, together with our commitment to our employees and the community, are­important components of this aspect of sustainability.

Employees
Our employees are Forbo’s most important ambassadors. They represent Forbo in daily contact with customers and many other stakeholders. It is therefore
important at all levels of the organization to understand what the company stands for, what it wants toachieve and how employees can contribute to this in
their respective areas of work. Accordingly, we communicate regularly both globally and locally using different formats, presentations, and meetings. Together
with our employees, we create a working environmentthat motivates, opens up perspectives, and encourages
and challenges employees according to their skills andinterests.

Corporate culture
Forbo’s corporate culture is based on our strategic principles, our Code of Conduct, and our corporate values.
It represents our ambitions, what makes us successful,and how we work together. It promotes a company-wide, success-oriented culture of ideas and solutions that is based on shared values and leads to verifiable success. The Forbo brand stands for our values, ourstandards, and our performance and creates identification among all stakeholders. The quality, longevity, andperformance of our sustainable products and services
reflect the quality and stability of our relationships with
our employees and our business partners.

Our Code of Conduct
Forbo aims to be a role model for ethical, sustainable,
and socially responsible business practices. The Codeof Conduct achieves this goal with specific content
and offers definitive and binding guidance. It contains
our most important business principles and values. It iscentral to how we protect and develop our reputation.
It is based on the principles of integrity, transparency,
and fairness and describes the way we act. It demonstrates our committment to acting ethically and withintegrity in every situation while respecting the rightsof the individual. We expect this from every employee
as well as from our business partners. High standards
in our business relationships are the foundation for­ongoing success.
In order to fully live up to these business principles
and values, Forbo offers the opportunity to report any
compliance issues to the Corporate Compliance Officer via Forbo’s Integrity Line.

69

Corporate values
Forbo maintains a high-performance culture thatmeets the exacting demands of our customers andbusiness partners as well as our own expectations.
We therefore promote appropriate skills and compe-

tencies at all organizational levels. To identify a strong
and comprehensive value culture and to promote a
sense of community across the entire Group, we havedefined three core values under the ‘Forbo Way toWin’ as guiding principles:

Caring

Inspiring

DaringChallenging and encouraging
oneself and others

Developing ideas
and seizing opportunities

Taking bold anddecisive action

Taking responsibility andmaking a difference

Knowing what mattersand focusing on it

Giving our allwith power and passion

Leading by example toshared success

Raising enthusiasm andconvincing others

Achieving goals withdetermination and stamina

These values serve as a reference system for employees, helping them make decisions, guiding their
behavior and actions, and building trust and mutual
appreciation. They foster a sense of community that
promotes loyalty, taking on responsibility, and thus
contributes to long-term cooperation. Our employees
are convincing ambassadors for our company and theForbo brand.
Our values are integrated into the feedback and annual review processes and, in addition to introductory
training, play a significant role in employee and management training.

70

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Attractive employer
Employees with specific know-how, good training,
motivation, and commitment are crucial to our success. Physical and psychological well-being at work is afundamental requirement in this regard. All employees
should feel equally valued and supported in their diversity and be able to develop their potential in thecompany without any discrimination. Forbo offers local and international career opportunities where craft
skills, engineering, design, and sales find common
ground. The company offers hybrid and part-timeworking models, invests in numerous training and education programs, and promotes health in the workplace.
Forbo works closely with local universities in many
countries; at Flooring Systems often with aspiring designers and architects, at Movement Systems with
graduates of technical or chemical faculties or applica-

tion-specific vocational courses. Forbo cares about thetraining of young, motivated school leavers. A basic
principle applying to the recruitment and promotionof trainees is that the apprenticeships offered by Forbo
are open to all applicants, irrespective of gender, andthe same requirements are placed on everybody. We
offer trainees the foundation for a professional careerin mostly commercial, industrial, or technical areas. Another important task is to ensure continuity throughthe transfer of know-how and experience assimilated
over the years by the older generation for the benefitof younger recruits.
Potential employees are primarily addressed
through the various digital channels. It is important to
us to maintain a healthy balance between long-standing, highly experienced, valued, and motivated employees and new team members who inspire otherswith new ideas, challenge existing procedures andprocesses, and thus contribute to the continued development of our company.

Employees

354

4,981
number of full-time employees
number of part-time employees

Continuous developmentof our employees
Sustainable growth is closely linked to highly trained
staff and utilization of employee potential. A cooperative leadership style, targeted development, and individual functional training programs as well as management and leadership programs promote commitment
and support the continued development of the company.

We therefore promote appropriate skills and competencies at all organizational levels and support thisinternally through training and educational activities.
We do this in different ways, through e-learning, internal and external webinars, and face-to-face events. The
divisions provide internal training in a wide range ofareas covering products and applications, sustainability, sales and marketing, finance, operations, software
application programs, project management, strategy
content and implementation, as well as instruction in
Forbo’s values. Continuous, intensive training in healthand safety includes measures relating to accident prevention, risk awareness, and occupational health andsafety.

71

Regular training on the Code of Conduct, competition law, the fight against corruption, respectful behavior, and various topics relating to IT security anddata protection is provided across the entire Group. A
module on respectful behavior addresses and raises
awareness of subjects including discrimination, bullying, and sexual harassment in the workplace.
Alongside these diverse activities, we support andcoordinate regular feedback and development discussions, actively promoting the personal and professional development of employees across all fields of activity, functions, and age groups.
At Group level, Forbo offers 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 further
training program for various management levels andpeople in key positions comprises different weekly
training sessions with modules from the areas of leadership, management, sales and marketing, as well as
operations. They focus on areas of strategy implementation and leadership in combination with appropriate
tools to facilitate communication and collaboration ininternational, culturally diverse teams.
In addition, we offer external training courses tailored to the individual needs of selected employees.
In 2023, we invested CHF 1.5 million in third-party
costs for the training and continuing education of ouremployees.

72

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Number of positions filled internally at senior management level
Number7
Versatile career prospects for Occupational health andspecialists and managers
safety a high priority
Forbo offers new recruits a wide range of career prospects and development opportunities. In addition, we
aim to fill the majority of vacancies requiring specialist
knowledge as well as management positions internally. The basis is provided by well-established succession
planning processes, which we continue to develop,
not only at management level. The continued development of production and manufacturing employees
for a wide range of areas of application and the corresponding know-how is essential for us as a manufacturing company.
At management level, possible development steps
and directions are discussed based on our feedback
and annual reviews, and selective engagement in international, strategic, or larger local projects with specific tasks is facilitated. This supports employees inpursuing a specialist or more management-oriented
career path within the company and at the same time
promotes intercultural exchange and understandingof global aspects.

Forbo has established high standards of occupational
health and safety to offer our employees a safe working environment. The health and safety of our employees in the workplace is also the focus of various local
training programs with the aim of reducing the number of accidents or preventing them altogether. Occupational health and safety is an important management and role model function that requires continuous
teamwork in order to raise lasting awareness. We
therefore encourage all employees to use their knowledge and experience to make a contribution to responsible and preventive action. Ongoing dialog in
relation to best practices and accident analyses contributes to the development of safety standards and atargeted improvement in safety levels.
Forbo regularly engages with authorities, professional associations, and trade unions. Together withthe local works councils, agreements are made in ourcompanies on issues such as personal protective
equipment, conduct, mandatory work processes, reporting processes, regular inspections, as well as training and education.

LTIFR
Number of lost time injuries multipliedby 1,000,000, divided by the total
hours worked. 12-month moving average.

Days lost due to accidents
Absence longer than
one working day

24.9

1,292

LTIFR

Number of days lost due to accidents

73

Developments relating to these issues are regularlypresented at divisional management meetings, where
they are then analyzed, and appropriate measures
drawn up and implemented. In addition, results andtrends are discussed and decisions on further activities
are made at Executive Board level.
Forbo is committed to protecting, preserving, andstrengthening the physical, mental, and social well-being of our employees. We achieve this through measures and activities in areas such as occupational safety
and hygiene, workplace ergonomics, as well as
health-related topics such as exercise, sport, and nutrition to promote well-being.
Throughout the reporting year, a large number ofactivities were carried out with the aim of improving
the health of employees or reducing risks to health.
Regular optimizations are carried out as part of themodernization of work processes and systems, including the reduction of noise emissions and the use ofrobots and lifting aids. Issues relating to workplace ergonomics and fitness were also discussed and related
activities were promoted, as was access to free medical check-ups.

Diversity, inclusion, andequal treatment as part ofsocial responsibility
At Forbo, diversity in the workplace includes a varietyof people with different backgrounds and personalities. Mutual respect is a given in our international andmulticultural environment. In addition, different experiences, training, skills, and beliefs ensure diversity inthe workplace. We want to continually provide a diverse and inclusive working environment that is characterized by appreciative collaboration among motivated employees.
Our products are manufactured and processed using
technically complex production processes and physically demanding fabrication processes. The lived experience of diversity and flexibility in team-based working
models also reinforces the attractiveness of our company, which offers a good work-life balance for employees
and specialists. Forbo ensures fair treatment of all employees and is committed to the highest internationallyrecognized standards of fairness, honesty, and integrity.
As a future-oriented company, Forbo draws on andconsciously leverages the diversity of the population asa resource. This means employees have equal opportunities and feel welcome to get involved and actively participate.
It is also important to us that work of equal value isrewarded with equal pay. The criteria for salaries comprise personal elements such as training, diplomas, language skills, relevant professional experience, as well as
employer-related factors such as requirements profile,level of responsibility, and specific specialized knowhow.
Female employees at Forbo mostly work in the areasof finance, administration, human resources, marketing
as well as manufacturing, supply chain, or purchasing. In
Flooring Systems, positions in design and sales are often
filled by women.
The professional instruction of trainees is important
to us. Especially at larger locations with diverse and demanding work areas, we have motivated teams withappropriate professional experience, qualified trainers,
and suitable workplaces. We use engaging teaching
methods to impart the appropriate skills for professional,
independent, and responsible performance of tasks. We
also offer technical and business students the opportunity to complete an internship with us.
Forbo is committed to the inclusion of people withdisabilities and works with relevant companies and institutions in various countries to promote their integration
into the world of work and business. We therefore fulfill
our social responsibility in a variety of ways.

74

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Percentage of women/men

Age structure
In percent
40

25.7%

30

20

74.3%

10

0
< 30
Men
Women

30–50

> 51

Men
Women

Apprentices and trainees
Number

Persons with disabilities
Number50

84

Respectful behavior

Reporting compliance issues

Mutual respect is a given in our multicultural environment.
Forbo does not tolerate discrimination or bullying
and strives to offer its employees a safe working environment free from all forms of violence, including
threats, threatening gestures, intimidation, attacks, andsimilar conduct, at all times.

We encourage our employees to report incidents that
violate applicable law, ethical standards, or the Code of
Conduct. By raising concerns, they contribute to theirown protection, that of their colleagues, and the protection of Forbo’s rights and interests.
If an incident occurs, employees can speak to theirsupervisor in person. Alternatively, the Forbo Integrity
Line is available in the respective national language. Employees can use this to draw attention to any compliance issues, anonymously if they wish.

75

Human rights

Combatting child labor

We assume responsibility for respecting human rights
as part of our business activities. Respecting and enforcing human rights can only be successful if all stakeholders involved make their contribution. We are therefore
committed to taking appropriate measures to prevent
human rights violations in connection with our business activities.
If, in exceptional cases, we do not meet our own
standards, affected employees and third parties havethe opportunity to report violations. Valid concerns­related to human rights violations within the Group orin the supply chain can be reported via the Forbo­Integrity Line, which can be accessed on the ForboGroup website. Reports can be submitted anonymously. Reports may also be sent to the widely communicated email address compliance@forbo.com,
which is intended specifically for this purpose.

Child labor is harmful to children’s physical and social
development and affects their education. Forbo respects the rights of children and has implemented
processes to combat child labor. As part of these processes, due diligence checks are also carried out and,if necessary, corrective measures are taken. The Codeof Conduct sets out the most important businessprinciples and values of the Forbo Group. It emphasizes that Forbo refrains from any form of child labor.
Forbo also requires its business partners to comply
with our or equivalent standards, including the entire
supply chain.

Forced labor, freedom of
association, and the right tocollective bargaining
Our Code of Conduct expressly states that Forbo rejects any form of forced or compulsory labor. We also
respect our employees’ freedom of association andcollective bargaining rights. They are essential for social dialog on an equal footing. We use internal audits
to ensure compliance with our global labor and social
standards. We also expect fair and ethical employee
management from our business partners.

Responsible sourcing
Our commitment
For Forbo, responsible sourcing not only means complying with the legal framework, but also setting standards together and overcoming challenges within the
supply chain. We are convinced that by implementing
the principles of responsible sourcing, we not only
have a positive impact on society and the environment, but also contribute significantly to the resilienceand reliability of our own supply chain.
Fair and ethical supplier management is the basis ofcooperation with our suppliers. Our supplier requirements are part of our contracts. They include requirements relating to quality, environmental impact, anti-corruption, human rights, health and safety, social
responsibility, and financial risks.
We expect our partners in the supply chain, their upstream suppliers, subcontractors, and service providers
to comply with the minimum social standards applicable in their country and also have a valid sustainability
strategy. Because only together can we achieve the goalof a completely sustainable supply chain. Compliancewith these principles is checked through regular risk assessments and, if necessary, through on-site supplieraudits.

76

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORT

Report on child labor in the
supply chain in accordancewith Article 964j CO
According to Article 964j CO, Forbo is obliged to reportannually on compliance with due diligence obligations in the supply chain with regard to child labor. The
supply chain audit initially involves categorizing thecountries in which Forbo operates, with reference tothe UNICEF Children’s Rights in the Workplace Index,
which establishes a child labor risk assessment foreach country. The categories of the index are ‘basic’,‘enhanced’, and ‘heightened’. Forbo sometimes also
operates in countries whose ‘due diligence response’ isnot classified as ‘basic’ by UNICEF. For these countries,
further checks are carried out for all suppliers u­ sing adetailed, risk-based approach. Our buyers a­ ssess therisk of child labor associated with each procurement
category in the respective supply chain. These checks
have shown that there is no reasonable suspicion of
the use of child labor. Forbo is therefore exempt fromdue diligence and reporting obligations in accordancewith Article 5 Paragraph 2 of the Ordinance on Due
Diligence and Transparency in relation to Minerals andMetals from Conflict-Affected Areas and Child Labor(DDTrO). This assessment is continually reviewed.
In order to keep the risk of child labor in our supply
chain low in the future, we have taken preventive measures. As part of the supply chain policy, the issue of childlabor has been integrated into the current supplier andprocurement guidelines of the divisions as well as into
the contracts and agreements with suppliers. The regulations are based on the ILO Convention No. 138 on theminimum age and No. 182 on the worst forms of childlabor, the ILO-IOE Child Labor Guidance Tool for Businessand the OECD Guidelines for Multinational Enterprises,
respectively the UN Guiding Principles for Business andHuman Rights. If we deem it appropriate based on therisk assessment, we also require self-disclosures and certifications from our suppliers and carry out on-site supplier audits. The results and respectively effectiveness ofthese measures are regularly analyzed in order to identify
potential for improvement.

Report on conflict minerals
in accordance with Article
964j COForbo does not exceed the quantities of minerals andmetals specified in Annex 1 DDTrO and is therefore exempt from the due diligence and reporting obligations with regard to conflict minerals and metals. The
evaluation took place involving all Group companies
and is continually reviewed.

Prevention of corruption
Our commitment
Corruption distorts competition, leads to higher costs,
destroys the trust of customers and suppliers, and ultimately endangers jobs. For these reasons, Forbo rejects any impairment or distortion of competition
through corruption in the spirit of zero tolerance.

Concepts andprocesses
In our Code of Conduct, the chapter ‘Business integrity:
no tolerance of any form of corruption’ forms the basis forour efforts in the field of combating corruption. Forboprohibits the offering, giving, or taking of bribes in whatever form. This includes improper commission payments
or other means of providing improper benefits to customers, agents, suppliers, officials, or business partners.
Gifts received by Forbo employees must be brought tothe attention of their superiors. Donations to politicalparties, political organizations, or holders of political­office are strictly prohibited at Forbo.
The careful review of business partners is part of thestandard process, which includes desktop analyses aswell as consultation of global databases, risk analysis using sources such as Transparency International’s ‘Corruption Perceptions Index’, and self-declarations by business
partners.
Furthermore, Forbo strives to ensure that the applicability of the Code of Conduct or an equivalent code of
conduct of the business partner is contractually secured.
As part of the internal compliance reviews regularly
carried out under the leadership of the Corporate Compliance Officer, the adherence to and effectiveness ofthese processes are checked on a sample basis.

Risk management
From both a geographical and industry-specific perspective, Forbo operates in markets where corruption
risks exist. We therefore take our responsibility to prevent corruption seriously wherever we operate.
Forbo’s compliance management system in the areaof anti-corruption includes regular online training specifically on anti-corruption and annual online training
on the Code of Conduct in general. All employees inareas susceptible to corruption receive specific training.

77

Socialcommitment
Commitment to thecommunity
For almost 100 years, Forbo, as an employer, has beencommitted to creating attractive workplaces and,thanks to profitable growth, continually provides added
value for regional economies, suppliers, and business
partners. In doing so, Forbo assumes social responsibility in a comprehensive sense.
Forbo attaches particular importance to soundtraining and education as well as equal opportunities
for all employees. We employ trainees in a variety ofdemanding roles with the aim of imparting all the relevant skills that are required for the professional andresponsible practice of their chosen profession.
We conserve resources through our sustainableproducts and the partial use of green energy.
We work with external institutions to outsource
simple work to workshops for disadvantaged people
and thus also promote external, inclusive jobs.
Forbo strives to make a positive contribution to thewell-being of society and the local communities inwhich we are active. Forbo is aware of its social responsibility and takes it seriously. Communication and cooperation with local authorities, institutions, interest
groups, and educational institutions, especially in thevicinity of larger manufacturing companies, is basedon proactive dialog. This creates trustful ways of working together on creative, social, and sustainability­topics.

Social commitment/charitable activities
Forbo also contributes to the common good by making individual contributions to support social and environmental projects at both Group and local level.
With product donations and support for flooring installations, we enable institutions in need to gain additional benefit for their commitment.
Social commitment is based on long-term partnerships with social institutions and programs with partners. At global level, selectively targeted funds are directed to social and charitable institutions or to relief
organizations to alleviate acute suffering or local disasters. Local companies and employees around theworld do charitable work and support social andhealth promotion projects through team events.

Ambitions
Our ambition when it comes to social responsibility is
to be a role model for ethical, environmentally friendly,and socially responsible conduct. We achieve this byencouraging and challenging our employees, offering
an appreciative, safe, and progressive working environment, and promoting innovation and a high level ofservice orientation for our stakeholders. We engage
actively for the common good by making individual
contributions globally to support social and environmental projects.

78

FORBO ANNUAL REPORT 2023 – SUSTAINABILITY REPORTGOVERNANCE
The separate Corporate Governance report starting on
page 81 of this Annual Report deals with the topic of­governance in detail.

79

CORPORATE
GOVERNANCEREPORT

82

FORBO ANNUAL REPORT 2023 – 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 publications of SIX Swiss Exchange.

Group structure and shareholders
Group structure
Forbo Holding Ltd, domiciled at Lindenstrasse 8, 6340 Baar, is a limited company under Swiss law. The holding
company holds all subsidiaries, directly or indirectly, that belong to the Forbo Group. The shares of Forbo Holding
Ltd (security number 000354151/ISIN CH0003541510) are listed on SIX Swiss Exchange. A financial overview of
the Forbo Group (including market capitalization) can be found on page 19. The operational structure of theGroup is shown in the organizational chart on page 43. 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 162 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, 2023, 4,286 shareholders were listed in the share register of Forbo Holding Ltd, 41 (0.9%) fewer
than in the previous year. As of December 31, 2023, Forbo Holding Ltd knew of the following significant share­
holders with a holding of more than 3%:
		
31.12.2023
as a percentage
Michael Pieper1)
Forbo Holding Ltd2)This E. Schneider
UBS Fund Management (Switzerland) AG
Credit Suisse Funds AG
J. Safra Sarasin Investment Funds AG
1)
2)

27.88
5.23
3.06
3–5
3–5
3–5

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

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

83

Below is a summary of the current notified shareholdings published in the year under review:
On March 3, 2023, Swisscanto Fondsleitung AG reported that it had fallen below the 3% threshold.
This E. Schneider reported on June 27, 2023, that he had exceeded the 3% threshold and held 44,898 shares,
corresponding to 3.02% of the voting rights.
Forbo Holding Ltd reported on June 27, 2023, that it had exceeded the threshold of 5% and held 83,030 of its
own shares directly or indirectly through Forbo Management SA, Baar, corresponding to 5.59% of the voting
rights.
On December 7, 2023, J. Safra Sarasin Investment Funds AG reported that it had exceeded the 3% threshold andheld 44,627 shares, corresponding to 3.01% 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, 2023, 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:– 72.4% were registered in the name of 4,263 shareholders with voting rights– 22.5% were shares held by banks or SIX SIS AG pending registration of transfer– 5.1% 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 48 and 49. Further information on the rights of participation associated with
the Forbo share can be found on pages 94 and 95 of this Annual Report.
By resolution of the Ordinary General Meeting of Forbo Holding Ltd on March 30, 2023, 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 lineon the SIX Swiss Exchange or by another means. These shares will be definitively canceled. Up to December 31,
2023, the Board of Directors had made no use of this authorization.

84

FORBO ANNUAL REPORT 2023 – 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, the sharecapital would increase by CHF 16,645, or 11.21%, from the current level of CHF 148,500 to CHF 165,145. The­capital increase takes place in accordance with the Articles of Association through the exercise of option andconvertible 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 haveno right of subscription. Holders of option or convertible rights are entitled to subscribe to new share issues. 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 are entered in
the share register with voting rights only if they declare expressly that they have acquired the shares in their own
name and for their own account.
There is no authorized capital.
Changes in capital
No changes to the capital of Forbo Holding Ltd were made in 2023.
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.
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 share ­capitalentered in the Commercial Register. Over and above this limit, nominees are only entered provided the name,address, and shareholding of those persons are disclosed for whose account the nominee holds a total of 0.3%
or more of the registered share capital entered in the Commercial Register.
No statutory privileges exist, and there is no restriction on the transferability of the shares of Forbo Holding Ltd.
Convertible bonds and warrants/options
Forbo Holding Ltd has no outstanding convertible bonds nor has it issued any marketable warrants/options.
­Details on the long-term incentive plan for the Executive Board, under which future subscription rights are outstanding, can be found on pages 109 to 114 as well as on pages 152, 153, and 161 of this Annual Report.

85

Board of Directors
Members of the Board of Directors
The cut-off date for the following information is December 31, 2023.
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, who held the post of Executive Chairman of the Board of Directors up
to the Ordinary General Meeting of March 30, 2023, 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. With
the exception of This E. Schneider, who assumed the role of Chief Executive Officer and Chairman of the ­Executive
Board of the Forbo Group on an interim basis from the end of November 2022 until the beginning of March 2023
and who sits on the Executive Board of selected Group companies, in the three business years preceding thereporting period, no member of the Board of Directors was a member of the Executive Board of Forbo Holding
Ltd and 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 Chairman of the Board are described on page 91 of the Annual Report.
This E. Schneider, 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 was­responsible 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 and­Vice-President of the Board of Directors of Selecta Group. From March 2004 to December 2013, This E. Schneider
was Delegate of the Board of Directors and CEO, and from January to April 2014 Delegate of the Board of D
­ irectorsof 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 the end of November 2022 until the beginning of March 2023. Since the Ordinary General Meeting 2023 heis not in an active executive role anymore.

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 various­subsidiaries 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 amember of the Supervisory Board of Duravit AG in Hornberg, Germany. He was first elected to the Board of­Directors of Forbo Holding Ltd in 2000.
1)

Independent as defined in the ‘Swiss code of best practice for corporate governance’86

FORBO ANNUAL REPORT 2023 – CORPORATE GOVERNANCE REPORT

Dr. Peter Altorfer, Vice-Chairman
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. Peter Altorfer sitson 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 foundations in­Switzerland. He has been a member of the Board of Directors of Forbo Holding Ltd since March 2005.
Serving on the Board of Directors for many years, Dr. Peter Altorfer will no longer stand for re-election at the­upcoming ­Ordinary General Meeting on April 5, 2024.
Claudia Coninx-Kaczynski
Claudia Coninx-Kaczynski, born in 1973, is a Swiss citizen. She took a degree in law at the University of Zurich(lic. iur.) and earned her Master of Law (LL. M.) at the London School of Economics and Political Sciences (LSE).
From 2006 to 2011, she managed the business of Faerbi Immobilien AG (subsequently Rietpark Immobilien AG)
in Zurich as a member of the Board of Directors. Subsequently, until 2014, she implemented various projects for
P. A. Media AG and Swisscontent AG in Zurich (M & A among others). Between 2013 and 2016, she was a memberof the Board of Directors of TX Group AG (formerly Tamedia AG), where from 2017 to 2023 she was appointed­Chairwoman of the Pool of Majority Shareholders. Since April 2023, she has again been a member of the Board of­Directors of TX Group AG and the Remunration Committee as well as the media company 20 Minutes. She is alsoa member of the Board of Directors of Swisscontent AG and Awina AG in Zurich as well as other Boards of Trustees.
She has been a member of the Board of Directors of Forbo Holding Ltd since April 2014.
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 Z
­ urich.
From 1985 to 2017, she worked for Homburger AG in Zurich as an attorney and tax advisor, serving for aroundtwenty years of that period as a partner and for over two years as Of Counsel. In 1990 she was in Chicago as alawyer with Baker & McKenzie. Since 2017, she has been running her own legal practice. Dr. Eveline Saupper sitson the Boards of Directors of a number of companies, including Clariant AG in Muttenz, Georg Fischer AG in
Schaffhausen, Stäubli Holding AG in Pfäffikon, and Tourismus Savognin Bivio Albula AG. She is also a memberof several Boards of Trustees. She has been a member of the Board of Directors of Forbo Holding AG sinceApril 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.

87

Board of Directors of Forbo Holding Ltd
as per December 31, 2023
First elected
at OGM
Chairman
THIS E. SCHNEIDER
Non-executive director

AFC

HRNC

RC

2004

Vice-Chairmen
MICHAEL PIEPER
Independent1) non-executive director
DR. PETER ALTORFER
Independent1) non-executive director
Members
CLAUDIA CONINX-KACZYNSKI
Independent1) non-executive director
DR. EVELINE SAUPPER
Independent1) non-executive director
VINCENT STUDER
Independent1) non-executive director

C

2000
2005

SSC

M

2014
2022

M

2009

C

M

M

C

C

M

M
M

Secretary of the Board of Directors
NICOLE GRAF
Non-member

OGM:
AFC:
HRNC:
RC:		
SSC:
C: 		
M: 		
1)
: 		

Ordinary General Meeting
Audit and Finance Committee
Human Resources and Nomination Committee
Remuneration Committee
Strategy and Sustainability Committee
Chair
MemberIndependent as defined by the ‘Swiss codeof best practice for corporate governance’

Changes to the Board of Directors
Jens Fankhänel succeeded Michael Schumacher as Chief Executive Officer and Chairman of the Executive Boardof the Forbo Group at the beginning of March 2023. Accordingly, he did not stand for re-election to the Board of
Directors at the Ordinary General Meeting of March 30, 2023.

88

FORBO ANNUAL REPORT 2023 – CORPORATE GOVERNANCE REPORT

Statutory regulations governing the number of permissible activities
pursuant to Article 626 Paragraph 2 Clause 1 CO
In accordance with Clause 22 of the Articles of Association (www.forbo.com � Investors � Ordinary General
Meeting), members of the Board of Directors may hold no more than five mandates in listed and twenty mandates in non-listed legal entities. A mandate is defined as any activity on the senior managerial or supervisory
bodies of legal entities that are entered in the Swiss Commercial Register or comparable foreign registers anddo not belong to the Forbo Group. Mandates with associated companies outside the Forbo Group are deemed
to be a single mandate.
Election and term of office
The members of the Board of Directors are elected in individual votes for a one-year term of office, in accordancewith the statutory provisions. A year is defined as the period between two Ordinary General Meetings. In­accordance with the Organizational Regulations of Forbo Holding Ltd, members who have reached their 70thbirthday resign from the Board of Directors at the following Ordinary General Meeting. The Board of Directors
may, however, approve exceptions. In determining the composition of the Board of Directors, importance is­attached to the election of independent individuals with international experience in industrial companies aswell 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 the­independent proxy.
Internal organizational structure
The allocation of tasks within the Board of Directors and the composition of the Board committees are shown in
the table on page 87.
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 and Sustainability Committee (SSC), and the Remuneration Committee (RC) – to deal withclearly defined subject areas of overriding importance. These four committees have mainly advisory and control
functions. The members of the AFC, SSC, and HRNC are elected by the Board of Directors on an annual basis andcan be dismissed at any time. The members of the RC are elected annually by the General Meeting.
As a rule, the 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 the­relevant items on the agenda are prepared by the 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 and supervisory function. In addition, the Chairman represents the Board and the Forbo Group vis-à-vis the public, the­authorities, and the shareholders. The tasks of the Chairman of the Board are set out in the section ‘Areas of­responsibility’ on pages 90 and 91.
The Vice-Chairmen are tasked with deputizing for the Chairman should the latter be prevented from attending
for any reason. In accordance with the Organizational Regulations and actual practice, the Vice-Chairmen haveno further duties.
The Vice-Chairmen are elected by the Board of Directors.

89

The Board of Directors meets on being convened by the Chairman as often as business requires but at least fourtimes a year. The items on the agenda must be announced at least five working days before the day of the­meeting. This notification period may be shortened in urgent cases. In 2023, the Board of Directors held eight
meetings with members physically in attendance, as well as one telephone conference call. The meetings eachlasted a whole day, while the conference call took around one hour. Every Board member participated in all the­meetings.
The Chairman may invite members of the Executive Board and other senior employees to attend Board meetings
for individual items. In the 2023 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 membersof 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, SSC, HRNC, or RC only in
exceptional circumstances to deal with particular items. In the 2023 business year, no external consultants participated in the meetings of the Board of Directors. Participation by external consultants in m
­ eetings of the AFC,
SSC, HRNC, and RC are listed in the chapters on the AFC, SSC, HRNC, and RC on pages 89, 90, and 102 to 104.
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 2023 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 85 and 86 of this Annual Report.

90

FORBO ANNUAL REPORT 2023 – CORPORATE GOVERNANCE REPORT

Strategy and Sustainability Committee
The SSC 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 the management’s preparation with­regard to the acquisition and disposal of companies and shareholdings for decision-making by the Board of­Directors and helps the Board of Directors to fulfil its responsibilities with regard to monitoring the implementation of ­strategy. The SSC then engages with topics relating to the environment, social issues, and corporate­governance, it supports and assists the management with the analysis of relevant aspects of sustainability, risk
assessment, the development of ­sustainability plans, and with appropriate reporting. It also regularly monitors
the progress made.
The SSC convenes at least twice a year. In the 2023 business year, two one-day meetings were held. All membersof the SSC 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 SSC. No external consultants participated in any SSC meetings.
The SSC 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 85 and 86 of this Annual Report.
Human Resources and Nomination Committee
We refer to the explanations in the remuneration report on pages 102 and 103.
Remuneration Committee
We refer to the explanations in the remuneration report on pages 103 and 104.
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– filing an application for a debt restructuring moratorium and notification of the court in the event ofover-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, SSC, 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.

91

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 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– preparation and submission of strategy-, personnel-, and finance-relevant business matters to the Board of
Directors for consultation and decision-making– regular communication with the CEO and Executive Board, exercising an advisory and supervisory role
– chairing of the Internal Audit and the Compliance Committee
Tasks of the Chief Executive Officer:– operational management of the Group– chairing of the Executive Board– development and operational implementation of strategies– development and implementation of multi-year planning and budgets– supporting the Chairman of the Board of Directors in preparing important business matters relating tostrategic, personnel, and finance topics
The CEO reports to the 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 Chairman of the Board andthat 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 the provisions of the law, the Articles
of Association, and regulations throughout the Forbo Group.
In carrying out his tasks, the CEO is supported by the members of the Executive Board, who report to him. The
Executive Board comprises the CEO, CFO, and the Executive Vice-Presidents of both divisions; it is responsible forthe long-term success and market-driven management of the Forbo Group.
The members of the Executive Board are responsible for their particular area of activity and also bear joint responsibility for safeguarding the interests of the Group and achieving the financial Group result.
Information and control instruments vis-à-vis the Executive Board
At the meetings of the Board of Directors, any member may request information about any matter concerning
the Forbo Group. Outside the meetings, such requests for information are to be addressed to the 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, SSC, and RC report at the Board of Directors meetings on the activities of theircommittees and express the opinions and recommendations of the AFC, SSC, 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 minutesof the AFC, SSC, HRNC, and RC meetings. The Executive Board reports to the AFC through the CFO in consultation with the CEO; it reports to the HRNC, SSC, and RC through the CEO.

92

FORBO ANNUAL REPORT 2023 – CORPORATE GOVERNANCE REPORTThe Board is also regularly briefed outside meetings about events and challenges the Group is facing and thegeneral performance of the divisions. In addition, the Chairman and the two Vice-Chairmen are in regular contact
when essential policy issues are involved. For important, particularly urgent events, the CEO informs the ­Chairmanof the Board of Directors immediately.
The Executive Board meets as often as business requires, normally once a month. In the 2023 business year,­eleven meetings 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 2023 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, SSC, HRNC, and RC on pages 89 and 90, and 102 to 104.
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 2023, 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, closely involved in the company’s planning cycle. As a rule, the existing­strategy is subjected to a thorough review by the Board of Directors in the first half of the year. The revised­strategy is quantified in the three-year medium-term plan, which is normally approved at mid-year by the Boardof Directors. Based on the medium-term plan, the Board of Directors sets the budget objectives for the coming
business year. These budget 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 madein mid-October. On completion of the business year, the extent to which the budget has been met is checkedand deviations are analyzed. This analysis is used to derive appropriate measures, which are then implemented
in the next planning cycle.
Internal audit is effected by Ernst & Young, which has been commissioned for this purpose. Internal audit is administratively subordinated to the Chairman of the Board of Directors, is functionally independent, and reports
directly to the AFC.
The audits are conducted in accordance with an annual plan approved by the AFC. A distinction is made b­ etween
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 areminimized or eliminated by measures adopted by management and are constantly monitored.
In 2023, seven Group companies were audited by Ernst & Young on the occasion of seven internal audits. Theinternal 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 businessprocesses. 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.

93

By means of self-assessments and management controls by division management, the implementation and­reliability of the controls introduced with the ICS were examined to ensure that deviations were identified andthat appropriate 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 Group.
The Board of Directors ensures that it identifies risks and is able to determine suitable measures and according
implementation of them. It has a Group-wide risk assessment carried out annually. As regards business risks, F­ orbo
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 monitoredcentrally.
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.
For further details of risk assessment, refer to the relevant explanations on pages 156 to 160 (note 23 ‘Risk assessmentand financial risk management’) of the Financial Report section of the Annual Report.
Compliance
Under the guidance of the Corporate Compliance Officer, Forbo maintains a Compliance Management Systemdeveloped in line with internationally recognized standards. The Corporate Compliance Officer is an independentrole, reporting directly to the Chairman of the Board of Directors of the Forbo Group and forming part of the­Compliance Committee along with the CEO of the Forbo Group and the Chairman of the Board of Directors.
The role of Corporate Compliance is to secure and consolidate a culture of ethical conduct throughout the ForboGroup. The Corporate Compliance Officer coordinates various initiatives within the Compliance Management
System, supporting the organization’s conformity with internal and external rules and regulations. The responsibilities of the role include regularly monitoring the Compliance Management System for effectiveness and­compliance with internationally recognized standards and recommending improvements to the Compliance
Committee, developing, implementing, and improving specific compliance standards and guidelines in line with
the Forbo Code of Conduct and Compliance Strategy, the maintenance of the Forbo Integrity Line, and the­assessment of compliance risks as part of the Forbo Group’s risk management process.
In consultation with the Compliance Committee, the Corporate Compliance Officer reports on a regular basis to
the Audit and Finance Committee of the Board of Directors. He also attends Executive Board meetings wherecompliance-related matters are on the agenda, taking part in those agenda items.

94

FORBO ANNUAL REPORT 2023 – 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 41 of this Annual Report.
Statutory regulations governing the number of permissible activities
pursuant to Article 626 Paragraph 2 Clause 1 CO
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
Jens Fankhänel took over as Chief Executive Officer of the Forbo Group at the beginning of March 2023, replacing
This E. Schneider, who had occupied the role on an interim basis since the end of November 2022.
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 101.

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 ­capitalentered in the Commercial Register. The restriction also applies to shares that are subscribed or acquired throughthe exercise of a subscription, option, or convertible right. Resolutions on the amendment or abrogation of theclause on the registration of registered shares require a majority of two-thirds of the votes represented at the­General 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.

95Electronic 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 defined by
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 the­Chairman 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 neither contain an ‘opting-up’ clause nor an ‘opting-out’ ­clausepursuant to Articles 135 and 125 (respectively) of the Financial Market Infrastructure Act.
Clause on changes of control
As per year-end 2023, 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. 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.

96

FORBO ANNUAL REPORT 2023 – CORPORATE GOVERNANCE REPORT

Additional fees
The additional consultancy fees that were invoiced by the auditing company amounted to CHF 0.1 million in 2023.
These fees were charged for the provision of support services in connection with the statutory reporting.
Information instruments of the external auditors
Where required, the external auditors prepare for the Chairman of the Board of Directors, the CEO, and the CFO
an annual management letter reporting on their work and the results of their audit at Group level in the year u­ nderreview. The key points are submitted to the Board of Directors in the form of a comprehensive report. The external
auditors also prepare management letters on the subsidiaries they have audited. The AFC assesses and evaluates
the proposals and statements thus received and appraises the corrective measures taken by management. At the
AFC’s invitation, representatives of the external auditors attend the AFC meetings in an advisory capacity. The
Chairman of the AFC reports on the activities of the AFC and its assessment of the external auditors at the­meetings 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.

97Blackout periods
Forbo has specified general blackout periods associated with the publication of the Annual and Half-Year R­ eports.
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 p­ eriodcovers all Forbo securities and applies regardless of whether or not 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 Boardof ­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. The­Securities 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 the­general blackout period prior notification by email. During the reporting year, there were no exceptions to theabove rules in connection with the general blackout periods.
In addition to the general blackout periods, special blackout periods can be imposed at any time, with the­duration, 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 aplan 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 approvalbeing given outside the blackout period only.

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. The­Chairman 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 media andanalysts’ conference on the publication of the Annual Report and Half-Year Report, and road shows are further
information tools for the media and the capital market.

98

FORBO ANNUAL REPORT 2023 – 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 noother form of information is stipulated by law. Written notification to shareholders takes place through a simple
letter to the addresses listed in the share register.
A financial calendar with the key dates can be found on page 11 of this Annual Report. Further information on
the Forbo share is printed on pages 48 and 49 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 media 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

99

REMUNERATIONREPORT102 FORBO ANNUAL REPORT 2023 – REMUNERATION REPORTREMUNERATIONREPORT
Introduction
This report complies with the SIX guidance on the Corporate Governance Directive, which came into effect onJanuary 1, 2023, replacing the previously applicable provisions of the Ordinance against Excessive Remunerationin Listed Public Companies (OaER). The report consequently meets the requirements of the Swiss Code of­Obligations.
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-term incentive 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 to­shareholders’ interests. Details on the long-term incentive can be found in the chapter ‘Elements of remunerationof the Executive Board’ on pages 109 to 111. An amendment to the Articles of Association concerning this m­ atter
was approved 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 2024 Ordinary ­General
Meeting:– Maximum total remuneration for the Board of Directors for 2025
– Maximum fixed remuneration for the Executive Board for 2025
– Short-term variable remuneration of the Executive Board for 2023 (bonus/short-term incentive)– Maximum total amount of the long-term participation for the Executive Board for 2024
(Long-Term Incentive Plan 2024 – 2026)
The total remuneration was approved by a large majority in a consultative vote on the 2022 remuneration reportat the Ordinary General Meeting of March 30, 2023 (agenda item 5.1). Participants in the 2024 Ordinary General
Meeting will also be invited to vote in a consultative ballot on the entire 2023 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 Chairman of
the Board and the CEO regarding Executive Board appointments and employment contracts. It also approves theacceptance of mandates by members of the Executive Board in companies that are not part of the Forbo Group.

103

The Human Resources and Nomination Committee meets as often as business requires, but at least twice a year.
In the 2023 business year, the HRNC held four 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 March 30, 2023, elected Dr. Peter Altorfer (Chair), Claudia Coninx-Kaczynski, andMichael Pieper to the HRNC for the 2023 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 85 and 86 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 Chairman of the Board of 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 Chairman of the Board of 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 2023 business
year, the Remuneration Committee held three 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 March 30, 2023, elected Dr. Peter Altorfer (Chair), Claudia Coninx-Kaczynski, and Michael Pieper to theRemuneration Committee for the 2023 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 of­executive functions in other companies, current directorships in other firms, and previous responsibilities/mandates. The relevant information can be found on pages 85 and 86 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 fixed­remuneration paid to the Executive Board are usually determined by the Remuneration Committee once a year
in the spring for the following business year and are submitted to the Board of Directors for acceptance at its­February meeting. The amount of the short-term variable remuneration (bonus/short-term incentive) and thedefinition and 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.

104 FORBO ANNUAL REPORT 2023 – REMUNERATION REPORTThe Chairman of the Board of Directors is regularly invited to the meetings of the Remuneration Committee in anadvisory capacity, as is the CEO in certain circumstances. Agenda items and matters directly affecting the functionor the person of the Chairman of the Board of Directors or the CEO are deliberated in their absence. The othermembers of the Executive Board are not entitled to attend or participate in these meetings.
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)
Performance targets – Executive Board regarding
long-term participation (long-term incentive)
Performance targets – CEO

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

RC

BoD

RC

BoD

Important changes in 2023
No important changes to the remuneration system were made in 2023. For the Board of Directors, the compensation structure of the Chairman of the Board of Directors was adjusted. To involve him to an even greater
extent in the e­ ntrepreneurial risk, he is solely compensated in Forbo Holding Ltd shares, with the former cash
component being completely omitted. The shares are locked up for a period of three years.

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 to­remunerate employees appropriately for their achievements, commitment, and performance, and thereby­encourage their long-term loyalty to the company. The purpose of paying part of the remuneration in the formof shares is to link the interests of the managers to those of the shareholders. The portion of the remuneration
paid in 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 Board­committees. The remuneration is paid out to members of the Board of Directors partly in the form of locked-up
shares in 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 a fixed
remuneration amount. The variable remuneration consists of a short-term remuneration (bonus/short-term incentive) and a long-term participation (long-term incentive).

105

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 109 and 110 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 184% 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 to one
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 the Group’s
performance objectives are achieved. At the end of the performance period, the company will determine w­ hetherthe 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, a given percentageof the PSUs will be converted into shares, which are subject to a three-year vesting period up until and including
the Long-Term Incentive Plan 2022 – 2024. 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 Remuneration Committee 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 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, orif they are globally active, publicly listed corporations operating in the same business areas as Forbo. The remuneration for the Chairman of the Board of Directors takes into account that the remuneration is ­predominantly
in restricted shares (solely as of the year under review) with a vesting period for three years to ensure a long-termorientation for the company. As a general rule, no external consultants are co-opted for determining the­remuneration.
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106 FORBO ANNUAL REPORT 2023 – 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), the Human Resources and Nomination
Committee (HRNC), and the SCC (Strategy and Sustainability Committee). Of the remuneration, 40% is paid to theBoard 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 period of three years. The number of shares issued is determined on the basisof the average price in the ten stock market days after distribution of a dividend or repayment of par value. If nodividend is distributed or no par value repayment made, the average price during the first ten stock market days
starting on June 1 of the relevant business year applies. The settlement or payment of the shares usually takes placein 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 for­expenses plus employer contributions to the usual social insurances.
The non-executive Board members do not participate in the management investment plan (MIP).
Chairman of the Board of Directors
The compensation for the Chairman of the Board of Directors is disclosed separately and included under total
remuneration to the Board of Directors. Up until the Ordinary General Meeting of March 30, 2023, the Chairmanof the Board of Directors operated as Executive Chairman, performing the additional role of CEO on an interim
basis up to the beginning of March 2023. Since April 2023, the Chairman of the Board of Directors has had no­executive role. To involve him to an even greater extent in the entrepreneurial risk, he has been solely compensated in shares since the year under review, with the former cash component of the base remuneration being
completely ­omitted. The allocated shares are locked up for a period of three years.
With this share package, 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 be sold in three years at the e­ arliest.
This compensation model is thus also geared to long-term and ­sustainable corporate development and is fully
consistent with the interests of the company and its shareholders.
The underlying share price used to calculate the number of shares is the weighted average price of the first tendays on which Forbo Holding Ltd shares were traded on the stock market in the calander year. In 2023, the corresponding market value was CHF 1,150.20 (previous year: CHF 1,876.00). The share package corresponds to ­annualcompensation at market value of CHF 3,401,141 (2,957 shares); previous year: CHF 2,264,336 (1,207 shares). In theyear under review, the cash remuneration was CHF 0 (previous year: CHF 918,983).
The total compensation for the Chairman of the Board of Directors came to CHF 3,538,614 for the year under­review (previous year: CHF 3,621,910). Contained in this amount and reported in the column ‘Other payments’ areemployer contributions to the usual social insurances (which in the previous year also included employer contributions to the pension fund), private use of a company car, contributions for accident and health insurance, andlocation expenses.
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 112 to 114 of this remuneration report.

107

Determining the remuneration of the Executive Board
Basic principles
In order to determine the remuneration of the Executive Board, criteria such as function, responsibility, and­experience are taken into account, and the remuneration paid to Forbo Executive Board members is comparedwith that paid to Executive Board members in comparable industrial companies. This is based on information thatis available from publicly accessible sources and from respected market data providers or is known to the members of 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
are globally 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 corporate­strategy is subjected to an in-depth review by the Board in the first half of the year. Once it has been confirmedor revised, 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 corporate­targets and the remuneration.

108 FORBO ANNUAL REPORT 2023 – REMUNERATION REPORT

Planning cycle
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

1st quarter2nd quarter3rd quarter

4th quarter

109

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 component: 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 (30%
to 40% of the variable remuneration), as well as EBIT of the Group and/or a division (50% to 60% of the variable
remuneration).
Whereas achievement of the financial (quantitative) objectives (90%) can be objectively measured, assessing
whether 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 127% of the fixed remuneration if targets are fully met. If the targets are exceeded, the variable remuneration may be as much as 184%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 derived
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.

110 FORBO ANNUAL REPORT 2023 – 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; the percentage mayvary from 46% to 92%. 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 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 arereached, a given percentage of the PSUs will be converted into shares after the three-year vesting period. Converted shares are locked up for a period of three years up until and including the Long-Term Incentive Plan 2022 – 2024.
As from the Long-Term Incentive Plan 2023 – 2025, they are subject to a vesting period of one year. They cannot

111

be sold or pledged during this time. Immediately on termination of the plan participant’s employment contract,­regardless of whether the plan participant has terminated the contract or the company has terminated the­contract 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 based on
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 developmentof the company and consist of three evenly weighted objectives. These are organic growth, the return on net a­ ssets(RONA), and growth in earnings per share (EPS) adjusted for the share buybacks. The target achievement is in eachcase 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 up until and including the Long-Term Incentive Plan 2022 –2024. 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 112 to 114 of this remuneration report for the amount of the actual short-term­variable 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 be revoked wholly or in part upon the o­ ccurrenceof 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.

112 FORBO ANNUAL REPORT 2023 – 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 918,325 in theyear under review (previous year: CHF 918,633). This sum consists of the base salary in cash (60% of the remuneration), amounting to CHF 494,195 (previous year: CHF 465,327) and the base remuneration in shares (40% of the
remuneration) of CHF 355,287 (previous year: CHF 380,746). This corresponds to 272 shares (previous year: 261
shares) at a market value of CHF 1,306.20 each (previous year: CHF 1,458.80). 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 Chairman of the Board of Directors is explained in detail on page 106 of this remuneration report.
Remuneration of the Executive Board
The total remuneration paid to the members of the Executive Board came to CHF 3,991,264 in the year underreview (previous year: CHF 2,964,710), subject to approval of the variable portion by the 2024 Ordinary General
Meeting. This sum includes a fixed base salary of CHF 2,116,614 (previous year: CHF 1,526,623) and short-term
variable bonus remuneration (short-term incentive) of CHF 364,636 (previous year: CHF 657,970), a long-term
participation (long-term incentive) of CHF 911,153 (previous year: CHF 360,460) plus the private use of a ­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 85,914 (previous
year: CHF 80,762). 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 100,614 (previous year: CHF 498,714), which is subject to approval by the 2024 Ordinary
General Meeting. The portion paid in shares is derived from a fixed remuneration amount.
For the three actual long-term incentive plans, a total of 1,213 future subscription rights in the form of per­formance share units were issued.

Plan2021 – 2023
2022 – 2024
2023 – 2025

Allocationof subscription rights
April 2021
April 2022
April 2023

Performance
period2021 – 2023
2022 – 2024
2023 – 2025

Vesting
date (PSUs)
April 2024
April 2025
April 2026

Unlockingof shares
April 2027
April 2028
April 2029

Numberof PSUs
allocated
222
198
793

Value of PSUs
in CHF(allocation)
343,921360,460
911,153

113

Disclosure of remuneration of the Board of Directors and Executive Board
Remuneration
For the year 20231)(audited)

Variable
remunerations

Base salary
Bonus/short-term incentive2)

Cash
CHF Number
02,957

Name and function

This E. Schneider,
Chairman55)

SharesCHF
3,401,141

Cash
CHF Number

Other
remuneration4)

Total

CHF
137,473

CHF
3,538,614

Long-term incentive3)

Allocation PerforShares mance Share Units
CHF Number
CHF

Michael Pieper,
Vice Chairman

86,87453

69,22912,927

169,030

Dr. Peter Altorfer,
Vice Chairman

130,42468

88,822

17,106236,352

Claudia Coninx-Kaczynski,
member

74,551

46

60,085

14,096

148,732

Jens Fankhänel, member6)
Dr. Eveline Saupper
member31,25081,415050

065,3103,524
12,31834,774
159,043

89,681
494,195
2,030,700
541,667

55
3,229
82
0

71,841
3,756,428
85,914
0

8,872
206,316
598,861
199,333

170,394
4,456,939
3,991,264
1,295,332

Vincent Studer, member
Board of Directors total7)
Executive Board8)9)10) total
Of which highest-paid
member of Executive Board(Jens Fankhänel)11)

264,0220100
54100,61454,332

793
433

911,153
500,000

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 t­ argets
were reached in 2023 and will be submitted to the April 2024 Ordinary General Meeting for approval. The criterion for determining the­number of shares issued for the variable remuneration is the unweighted average of the closing prices of the Forbo share in the first 14 trading days in January of the allocation year in connection with the MIP. The allocation takes place in April (subject to approval by the Ordinary
General Meeting) for the period from January to December of the previous year. The value at allocation was CHF 1,006.14. 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 2023 (Long-Term Incentive Plan 2023 –2025) and to the number of future subscription rights allocated to the plan in the form of performance share units (PSUs). One PSU corresponds
to a future subscription right to one share and is subject to a three-year vesting period.
4) ‘Other remuneration’ includes in particular employer contributions to the usual social insurances, private use of a company car, and lump sum
or on-site expenses.
5) Please refer to page 106 of this remuneration report for details on the structure of the remuneration of the 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 2023 remuneration for Jens Fankhänel was paid pro rata temporis (3 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 1,306.20. The allocation is made at the discounted tax
value of CHF 1,096.71. 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 1,154.34 for 2023
and for 2024 CHF 1,006.14.
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 2023 business year will be allocatedin April 2024, subject to approval by the 2024 Ordinary General Meeting. The shares are locked up for a period of three years. The value atallocation was CHF 1,006.14. Foreign members of the Executive Board may acquire stock awards instead of shares. The stock in question willbe transferred after three years.
10) The remuneration of the Executive Board for 2023 includes the pro rata remuneration relating to the change of CEO.
11) The remuneration was paid pro rata temporis (10 months).

114 FORBO ANNUAL REPORT 2023 – REMUNERATION REPORT

Remuneration
For the year 20221)(audited)

Variable
remunerations

Base salary
Bonus/short-term incentive2)

Name and function

This E. Schneider,
Chairman5)

Cash
CHF Number
918,983
1,207

SharesCHF
2,264,336

Cash
CHF Number

Other
remune­ration4)

Total

CHF
438,591

CHF
3,621,910

Long-term incentive3)

Allocation PerforShares mance Share Units
CHF Number
CHF

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

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

159,256
71,250432
220498,714
253,975198
0360,46001) 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 t­ argets
were reached in 2022 and will be submitted to the April 2023 Ordinary General Meeting for approval. The criterion for determining the­number of shares issued for the variable remuneration is the unweighted average of the closing prices of the Forbo share in the first 14 trading days in January of the allocation year in connection with the MIP. The allocation takes place in April (subject to approval by the Ordinary
General Meeting) for the period from January to December of the previous year. The value at allocation was CHF 1,154.34. 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 corresponds
to a future subscription right to one share and is subject to a three-year vesting period.
4) ‘Other remuneration’ includes in particular employer contributions to the usual social insurances, private use of a company car, and lump sum
or on-site expenses.
5) Please refer to page 106 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.

115

Advances and loans (audited)
As of December 31, 2023, 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 734d CO
2023 business year
As at December 31, 2023, 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 2023
(audited)
Name and function
This E. Schneider, Chairman
Michael Pieper, Vice-Chairman and independent1) member
Dr. Peter Altorfer, Vice-Chairman, independent1) member
Claudia Coninx-Kaczynski, independent1) member
Dr. Eveline Saupper, independent1) member
Vincent Studer, independent1) member
Total Board of Directors
Jens Fankhänel, 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

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

Numberof shares
45,513414,985
1,579
412
1,330
1,161
464,980
1,380
219
185
723
2,507

116 FORBO ANNUAL REPORT 2023 – REMUNERATION REPORTAs 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
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

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

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

117

Report of the statutory auditor

118 FORBO ANNUAL REPORT 2023 – REMUNERATION REPORT

Report of the statutory auditor119

Report on Other Legal and Regulatory Requirements
In accordance with Art. 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 the consolidated financial statements according to the instructionsof 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, 4 March 2024

KPMG AG, Badenerstrasse 172, CH-8036 Zurich© 2024 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.

FINANCIAL REPORT
Consolidated financial statements
for Forbo Holding Ltd
Consolidated balance sheetConsolidated income statement
Consolidated comprehensive income statement
Consolidated statement of changes in equity
Consolidated cash flow statementNotes – accounting principles
Notes
Group companies
Report of the statutory auditor
Consolidated balance sheets 2019 – 2023
Consolidated income statements 2019 – 2023
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

121
122
123
124
125
126
127
135
162
166
170
171
173
174
175
176
179
180

122 FORBO ANNUAL REPORT 2023 – 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.

31.12.2023

31.12.2022

523.2
69.1
138.9
35.9
15.1
264.2
378.2
1.9
30.7
266.6
79.0
901.4

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

219.3
13.2
86.9
22.4
16.2
73.1
7.5
128.4
26.9
7.4
44.9
49.2
347.7
553.7
0.1
– 0.0
553.6
901.4

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

Note

22
12

13
22
10
14/21
15

Note

22
22

16
17
22
10
17
18

20
20

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 123

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.

2023

2022

1,175.2– 773.5
401.7– 15.7– 168.5– 80.1– 17.2
9.7
129.9
5.7
– 3.8
131.8
– 29.5102.3
102.3

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
– 29.6
101.4
101.4

72.55
72.55

71.76
71.76

Note

5

6

7
8

10

Note

11
11

124 FORBO ANNUAL REPORT 2023 – 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.

2023

2022

102.3

101.4

– 11.119.2– 47.3– 58.443.9
43.9– 36.3– 17.1
84.3
84.3

Note

10

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 125

Consolidated statementof changes in equity
2023

CHF m
January 1, 2023
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, 2023

Note

Share
capitalTreasuryshares0.1– 0.0

Reserves

0.1

– 0.0

947.3
102.3
– 11.1
91.2
4.0– 11.7– 32.6998.2

Share
capitalTreasurysharesReserves

0.2

– 0.1

19
20

Translationdifferences– 397.3– 47.3– 47.3– 444.6

Translationdifferences

Total

550.1
102.3
– 58.443.9
4.0– 11.7– 32.6
553.7

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

Note

19
20

– 0.1

0.1

0.1

– 0.0

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

882.7
101.4
19.2
120.6
4.7
– 25.4– 35.3947.3– 361.0– 36.3– 36.3– 397.3

Total

521.8
101.4
– 17.1
84.3
4.7– 25.4– 35.3550.1

126 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Consolidated cash flow statement

1.1. – 31.12.
Cash flow from operating activities
CHF mGroup profit for the year
Income taxes
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 in provisions and employee benefit obligations
Decrease/Increase (–) in trade receivables
Decrease/Increase (–) in inventories
Decrease in trade payables
Increase 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 of current financial liabilities
Interest paid
Purchase of treasury shares
Proceeds from sale 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
Increase/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.

2023

2022

102.3
29.5
– 1.9
46.4

101.4
29.6
1.6
55.7

3.7
4.0
– 33.0
0.9
5.2
29.7
– 9.4
– 17.4
160.0

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

– 45.3
1.2– 44.1– 30.90.8– 30.1– 16.7– 24.6– 2.4– 18.1
6.5– 32.6– 87.9– 18.4– 11.7– 1.0– 27.50.0– 35.3– 93.928.0– 43.4

46.7
28.0
– 5.6
69.1

93.3
– 43.4
– 3.2
46.7

Note

10
14
15
9

Note

Note

21
22
21

Note

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 127

Notes –
accounting principles
1 General information
Forbo Holding Ltd and its subsidiaries (together constituting the ‘Group’) manufacture floorings, construction adhesives, and belts for 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 4, 2024, and released for
publication on March 5, 2024. This financial report issubject to approval by the Ordinary General Meetingof April 5, 2024.

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 Forbo­Holding Ltd were prepared in accordance with the
IFRS ­Accounting Standards and in compliance with
Swiss law.
The consolidated financial statements are prepared in
Swiss francs. The Swiss franc is both the functional­currency 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 prepared­according to uniform corporate accounting policies.
The reporting date for all Group companies is­December 31.

The consolidated financial statements were preparedin accordance with the principle of historical costs,
with the 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 involvementin the company or possesses rights to the returns andis able 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 purchase considerationof the business combination and the amount of thenon-­controlling interest over the identifiable net­assets ­assessed at fair value.
Inter-company transactions, balances, and unrealized
gains or losses on transactions between Group companies are eliminated.

128 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Changes in the scope of consolidation
In the prior-year 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 Forbo­Siegling GmbH for the purpose of simplifying theGroup structure.
The subsidiaries included in the group of consolidated
companies are listed under ‘Group companies’ (frompage 162 of this report).

Foreign currency translation
Transactions in foreign currencies
The individual companies prepare their financial­statements in their functional currency. The functional
currency is the currency of the primary economic­environment in which the company operates andgenerally corresponds to the local currency. Foreign
currency transactions are translated into the functional
currency using the exchange rates prevailing at thedates of transaction. Foreign exchange gains and­losses resulting from the settlement of such trans­
actions and from the translation at year-end exchange
rates of monetary assets and liabilities denominated inforeign currencies are recognized in the income statement.
Foreign operations
The annual financial 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 translationof items at average and year-end exchange rates andfrom 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 foreign business
operations are recognized in other comprehensive­income.

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 129

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

Exchange rates
Euro zone
USA
Great Britain
Japan
China
Sweden

EUR
USD
GBP
JPY
CNY
SEK

1
1
1
100
100
100

Balance sheet(year-end exchange rates)

2023

2022

2023

2022

0.97150.89801.11700.638712.7406
8.46411.00400.9543
1.17720.726714.1860
9.4366

0.93350.8433
1.07490.596111.96118.4011

0.9841
0.9234
1.11230.696013.2600
8.8186

Net sales and revenue recognition
Revenue from contracts with customers is recognizedwhen the control of the goods or services is transferred to the customer. The revenue is based on thecontractually agreed transaction price, i.e. the amountto which the Group can be expected to be entitled inreturn for the transfer of the goods or services to a­customer.
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 rebates 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.

130 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

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 weighted­average number of treasury shares held. To calculate
diluted earnings per share, an adjusted number ofshares is determined from the total number of sharesused 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 determinedthat could have been purchased at the market price on
the basis of the cumulative difference between themarket price and the strike price of the future subscription rights. The market price used for this purpose­corresponds to the average price of the shares in thebusiness year under review.
Income taxes
Income taxes constitute the total of current and­deferred 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 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 to the relevant category of tangible asset.
Depreciation is calculated according to the straightline 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.
Leasing
The Group is the lessee for various items of property,
plant, and equipment; buildings and vehicles constitute the vast majority of leasing agreements.
Exceptions are made for short-term leases and for­leases for low-value assets used by the company.
These lease payments are recognized as expenditure
over the lease 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’.

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 131

Intangible assets and goodwill
The goodwill generated in connection with businesscombinations is measured at the cost of acquisition
less cumulative impairment losses.
The acquisition costs of trademarks, licenses, customer
relationships, and technologies acquired in a businesscombination correspond to the fair value at the dateof acquisition.
Intangible assets with an indefinite useful life (goodwill and trademarks) are not subject to amortization
but are tested for impairment annually at cash-generating unit level. This is carried out using a standardized
method with discounted cash flow for calculating thevalue in use. Cash flow for the first three years is­estimated on the basis of the plan approved by management (detailed planning period). Cash inflows after
the detailed planning period are extrapolated to thevalue of a going concern by means of recoverable
earnings. The intangible assets with an indefinite­useful life are also subject to impairment testing in theform of sensitivity analyses.
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

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) andf­inancial liabilities are initially recognized at fair value.
Transaction costs, which are directly attributable to­acquisition or issuance, are added in addition for financial instruments that are not measured at fair value
through profit or loss. 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 profit or loss’
Essentially, the financial assets in the Group consist of
cash and cash equivalents and trade receivables thatare reported at amortized cost using the effective interest method less valuation allowances for expectedcredit losses. Cash and cash equivalents are stated atnominal value. This 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 through profit
or loss. 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 liabilities’.

132 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

The Group recognizes allowances for expected credit Shareholders’ equity
losses on financial instruments that are reported at Registered shares are classified as share capital at theiramortized costs. The Group applies a permissible, par value. Payments by shareholders above the par­simplified model of valuation allowances (‘provision value are credited to reserves.
matrix’) for trade receivables. In this valuation allowance table, expected losses on receivables are deter- Treasury shares are deducted at their par value frommined on the balance sheet date on the basis of past share capital. The acquisition costs in excess of par
experience of default probability, and of future-­ ­value arising on the acquisition of treasury shares areoriented expectations based on experience with the debited to reserves. On the sale of treasury shares,­customers and market conditions.
gains or losses compared with the par value are­credited or debited to reserves.
The Group considers a financial asset to be in default
if it is unlikely that the borrower can pay his obligation Dividends are debited to equity in the period in whichto the Group in full without the Group having to the resolution on their distribution is adopted.
take recourse to measures such as the realization ofcollateral.
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 are­liabilities from leasing contracts. These are measured
at amortized costs using the effective interest method.
A financial liability is measured at fair value trough theincome statement 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 inbringing the inventories to their present location andcondition. The net realizable value constitutes the­estimated sales price less all estimated costs up tocompletion, as well as the costs of marketing, sales,and distribution.
Inventories are generally measured at average cost.

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 as­relevant, including expectations of future events thatappear reasonable in the given circumstances. The­actual results may, of course, deviate from the estimates and 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 regarding a significant adjustment of the carrying
value of assets and liabilities.

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 133

Impairment tests
Along with the regular periodic review of goodwill
and intangible assets with an indefinite useful life, thecarrying 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 impaired in the event of a change in the use of buildings,
machinery and facilities, change or abandonment oflocations, or lower-than-expected revenues over the
medium term. Further information on this topic canbe found in note 14 ‘Property, plant, and equipment’and note 15 ‘Intangible assets and goodwill’.

Valuation of pension plan liabilities
Various employee pension plans exist for employeesof 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 wellas assumptions for future wage trends. In their actuarial calculations for determining employee benefit obligations, the actuaries also use statistical informationsuch as mortality tables and staff turnover rates. If
these parameters change owing to a change in theeconomic 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 andon the comprehensive income statement. Further­information on this topic can be found in note 18 ‘Employee benefit obligations’.

134 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

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 in­order 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 tothe interpretation 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 materialchanges to income tax expenses. Where the definitive
taxation of these business events deviates from theprevious assumptions, this will have an impact on thecurrent and deferred taxes in the period in which thetaxation is definitively determined. Furthermore,­determining whether tax losses carried forward can becapitalized 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 can be found in note 10­‘Income taxes’.

4 Application of new or amended
accounting standards
As of January 1, 2023, the Group adopted the amendments to IAS1 and IFRS Practice Statement 2 ‘Disclosureof Accounting Policies’. Although these amendments
had no effect on the accounting principles themselves, they did affect the information on the accounting principles disclosed in the consolidated financial
statements. The changes require the dis­closure of ‘material’ accounting principles, rather than ‘significant’­accounting principles, as previously. Group management has reviewed these and updated the information given.
The Group has also adopted the amendments to IAS
12 ‘International Tax Reform – Pillar Two Model Rules’.
These amendments introduce a mandatory temporary exception to deferred tax accounting for top-up
tax, effective immediately. However, the retrospective
application of this exception has no effect on the consolidated financial statements as the top-up tax had
not yet been imposed or was immediately pending to
be imposed as per December 31, 2022, in any country
in which the Group is active and thus no related­deferred taxes were booked.
The Group also adopted several other more minor
amendments made by the International AccountingStandards Board (IASB) to existing standards and interpretations, which came into effect on January 1, 2023.
The first-time adoption of these revised standards andinterpretations had no significant impact on the­consolidated financial statements presented here.
Accounting standards which had been published by
the IASB but only come into effect after January 1,
2024, were not adopted early in the consolidated­financial statements. No significant impact on the consolidated financial statements presented here is expected from the first-time adoption of these standards
and interpretations.

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 135

Notes

5 Segment reporting
The Group operates globally in the segments Flooring
Systems and Movement Systems. The divisions correspond to the internal management structure and arerun separately because the products they manu­
facture, distribute, and sell differ fundamentally interms of production, distribution, and marketing.
In the Flooring Systems division, the Group develops,
produces, and sells linoleum, vinyl floorings, entrance
flooring systems, carpet tiles, needle felt floor coverings, Flotex, the washable textile flooring, and building
and construction adhesives as well as various accessory
products required for the laying, processing, cleaning,and care of flooring. In the Movement Systems
division, the Group 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 thecosts of the Group headquarters and certain items ofincome and expenses that are not directly attributable
to a specific segment.

The Flooring Systems and the Movement Systems­divisions are reportable segments. The identification of
the reportable segments is based on internal management reporting to the Chairman of the Board of Directors and to the Chief Executive Officer of the Groupand hence on the financial information used to review
the performance of the operational units in order toreach a decision on the allocation of resources.
The internal management reporting is based on thesame accounting principles as the external reporting.
The Chairman of the Board of Directors and the Chief
Executive Officer assess the performance of the reportable segments based on their operating result(EBIT). The financial result is not allocated to the­segments since it is Corporate Treasury that mainly­exercises central control over it. Inter-segment sales
are transacted at arm’s length. The segments apply thesame accounting principles as the Group. Sales tothird parties, as they are reported to the Chairman of
the Board of Directors and the Chief Executive Officer,
are identical with the sales reported in the income
statement.

Segment information on the reportable segments forthe reporting year:
2023
CHF m
Total net sales
Inter-segment net 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
796.5
0.0
796.5
94.9
123.2
457.8
26.8
2,741

Movement
Systems
378.9
– 0.2
378.7
44.3
65.5
311.8
17.8
2,408

Corporate/
Elimination
– 0.2
0.2
0.0
– 9.3
– 8.8
31.9
0.7
41

Total
1,175.2
0.0
1,175.2
129.9
179.9
801.5
45.3
5,190

136 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Segment information on the reportable segments forthe prior year:
2022
CHF m
Total net sales
Inter-segment net 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 in
the prior year for impairments in Russia, above all on
goodwill and property, plant and equipment, costs forstructural adjustments, and for other costs, including
those from provisions for various legal claims, weremainly incurred by Flooring Systems.

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

CHF mTotal segment result (EBIT)
Financial result
Group profit before taxes

CHF m
Total operating assets
Non-operating assets
Total assets

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

2023

2022

129.9
1.9
131.8

132.6
– 1.6
131.0

31.12.2023

31.12.2022

801.5
99.9
901.4

879.2
81.0
960.2

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 137

The following table shows revenue broken down bygeographic region and by the two divisions that are
identical with the reportable segments.
Flooring Systems

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

Movement Systems

2023
Third-party
sales

2022
Third-party
sales

2023
Third-party
sales

2022
Third-party
sales

598.0
122.3
76.2
796.5

657.5
140.6
79.9
878.0

155.5
123.1
100.1
378.7

166.6
142.4
106.2
415.2

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

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

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

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

2023
Third-party sales

2022
Third-party sales

28.6
137.9
130.1
118.1
83.3
75.6
179.9
753.5
190.7
54.7
245.4
176.3
1,175.2

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

Operating assets are distributed over the following­regions:
31.12.2023
Operating assets

31.12.2022
Operating assets

39.5
89.1
67.2
193.2
33.6
80.0
53.3
555.9
110.1
23.5
133.6
112.0
801.5

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

138 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

6 Development costs‘Development costs’ mainly comprise costs for productdevelopment.

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

7 Other operating expenses

8 Other operating income‘Other operating expenses’ comprise expenses of different kinds in connection with legal costs, allowanceson inventories, taxes on capital, levies based on local
legislation, and allowances for doubtful trade receivables. In the prior year ‘Other operating expenses’ also
included impairments on goodwill and property,
plant, and equipment in Russia.

‘Other operating income’ comprises a range of income, such as the release of provisions for site remediation and the release of provisions for personnel
costs (in the prior year from release of provisions forlegal proceedings), income from associated companies, and income from sales of material for recycling
purposes.

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

Personnel expense decreased year-on-year due tolower average headcount and due to lower exchange
rates.
Salaries and wages include share-based payment­expenses of CHF 4.0 million (2022: CHF 4.7 million). A
bonus program is available for around 150 managers,which is linked to achieving financial targets set for
the Group, the divisions, and individual objectives(see also note 19 ‘Employee participation plan’).

2023

2022

275.7
61.1
12.3
2.2
351.3

306.9
64.1
12.5
5.1
388.6

As at December 31, 2023, the headcount was 5,190(2022: 5,390). The weighted average headcount over
the year was 5,357 (2022: 5,637).

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 139

10 Income taxes

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

2023

2022

26.9
2.6
29.5

33.2
– 3.6
29.6

2023

2022

131.8
– 30.323.0

131.0– 31.0
23.7

– 2.1
0.3
0.0
1.1
1.5
– 29.5
22.4

– 1.0
0.4
0.1
0.8
1.1
– 29.6
22.6

Analysis of tax expense
The following reconciliation explains the difference
between the expected and the effective income tax
expense:CHF mGroup profit before taxes
Tax expense at the applicable tax rate
Applicable 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
income tax expense depends every year on the originof the profits or losses in each country. The expected
income tax expense is the sum of the expected indi-vidual tax expense of all subsidiaries. The expected individual income tax expense in a country is calculated
by multiplying the individual profit/loss by the tax rateapplicable in the country concerned.

140 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Capitalized and non-capitalized tax loss carry-forwards
all expire in more than five years.:

CHF m
Non capitalized
Capitalized
Total tax loss carry-forwards

2023

2022

30.0
20.2
50.2

20.7
32.8
53.5

31.12.2023

31.12.2022

30.7
– 7.4
23.3

34.3
– 8.2
26.1

The following amounts are shown in the balance sheet:

CHF mDeferred tax assets
Deferred tax liabilities
Deferred taxes, net

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 141

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

CHF mJanuary 1, 2022
Changes recognized in income statement
Changes recognized in other comprehensive income
Translation differences
As at December 31, 2022
Changes recognized in income statement
Changes recognized in other comprehensive income
Translation differences
As at December 31, 2023
Netting with deferred tax liabilities
As at December 31, 2023

Inventories
7.2
1.0

Property,plant, andequipment
2.2
2.3

Provisions
8.5
2.4

Loss carryforwards
12.3
– 1.1

0.1
8.3
– 2.0

0.0
4.5
1.7

– 0.5
10.4
0.5

– 1.0
10.2
– 3.6

– 0.8
5.5

– 0.8
5.4

– 0.2
10.7

– 0.5
6.1

Employeebenefit obligations
13.5
0.0
– 5.7
– 0.8
7.0
– 0.5
1.3
– 0.1
7.7

5.5

5.4

10.7

6.1

7.7

Inventories
3.4
0.1
– 0.3
3.2
– 0.3
– 0.1
2.8

Property,plant, andequipment
6.8
– 0.1
– 0.7
6.0
0.5
– 0.3
6.2

2.8

6.2

Other
6.2
– 0.1
0.1
6.2
0.7
– 0.2
6.7
6.7

Total
49.9
4.5
– 5.7
– 2.1
46.6
– 3.2
1.3
– 2.6
42.1
– 11.4
30.7

Deferred tax liabilities

CHF mJanuary 1, 2022
Changes recognized in income statement
Translation differences
As at December 31, 2022
Changes recognized in income statement
Translation differences
As at December 31, 2023
Netting with deferred tax assets
As at December 31, 2023

0.0
0.1

Intangible
assets
8.7
– 1.4
– 1.3
6.0
– 1.7
– 0.5
3.8

0.1

3.8

Provisions
0.1

Decrease in net deferred tax assets 2022
Decrease in net deferred tax assets 2023

As at December 31, 2023, no deferred income tax­liabilities on undistributed profits from consolidated
companies have been recognized, since this income
is deemed to have been reinvested for an indefinite­period.

0.0
0.1

Employeebenefit obligations
0.0

0.0

Other
3.3
2.3
– 0.4
5.2
0.9
– 0.2
5.9

0.0

5.9

0.0

Total
22.3
0.9
– 2.7
20.5
– 0.6
– 1.1
18.8
– 11.4
7.4
– 1.5
– 2.8

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

142 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Income tax expense and income recognized in the­other comprehensive income statement:
2023
CHF m
Actuarial losses (–)/gains on employee benefit obligations
Translation differences
Other comprehensive income

Global minimum taxation
The Group anticipates that it will be subject to the­top-up tax in relation to its business activities in Switzerland. However, as the new law was only effective as
per January 1, 2024, it has no consequences for theyear under review. The Group applies the mandatory

2022

Before tax

Tax expense

After tax

Before tax

Tax expense

After tax

– 12.4– 47.3– 59.7

1.3– 11.1– 47.3– 58.424.9– 36.3– 11.4– 5.7

19.2– 36.3– 17.1

1.3– 5.7

exception for deferred tax accounting for global topup tax and will record it as current income tax at thetime it is incurred. Had the top-up tax been applied in
2023, the Group’s effective tax rate would have risen
by less than one percentage point.

11 Earnings per share
Earnings per share are calculated as follows:

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

2023
102.3
1,409,775
0
1,409,775
72.55
72.55

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

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 143

12 Trade receivables

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

Information with regards to the Group’s credit andmarket risks and allowances for doubtful trade receiv-

31.12.2023

31.12.2022

133.4
10.2
– 4.7
138.9

146.8
13.3
– 4.9
155.2

ables 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

As a result of optimizations in production and sales
planning, inventories could be reduced significantly
compared to the prior year.
Cost of materials recognized in the reporting year
came to CHF 433.7 million (2022: CHF 492.4 million).

31.12.2023

31.12.2022

60.7
86.0
146.4
– 28.9
264.2

74.3
93.7
182.0
– 33.8316.2

144 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

14 Property, plant, and equipment

Cost on acquisition
CHF m
As at January 1, 2022
Additions
Disposals
Transfers
Translation differences
As at December 31, 2022
Additions
Disposals
Transfers
Translation differences
As at December 31, 2023

Land andbuildings

Machineryandequipment

Vehicles andotherproperty,plant, andequipment

187.6
8.5
– 1.9
1.0
– 18.1
177.1
13.5
– 4.0
1.4
– 21.8
166.2

732.0
9.8
– 10.324.2– 40.0715.7
6.9– 27.911.3– 38.6
667.4

135.9
7.6
– 8.0
2.0
– 6.8
130.7
7.8
– 22.1
1.5
– 6.7
111.2

Land andbuildings

Machineryandequipment

Vehicles andotherproperty,plant, andequipment

51.5
15.9
2.2
– 1.8
– 11.0
56.8
16.3
– 3.9
– 14.2
55.0

614.1
26.4
2.0
– 10.2– 33.6598.7
22.8– 27.9– 32.1
561.5

119.6
8.9
0.3
– 8.0
– 5.9
114.9
7.3
– 22.1
– 5.6
94.5

0.0

0.0

785.2
51.2
4.5
– 20.0– 50.5770.4
46.4– 53.9– 51.9
711.0

120.3
111.2

117.0
105.9

15.8
16.7

14.5
32.8

267.6
266.6

Accumulated depreciation and impairments
CHF m
As at January 1, 2022
Depreciation
Impairments
Disposals
Translation differences
As at December 31, 2022
Depreciation
Disposals
Translation differences
As at December 31, 2023
Net carrying amountAs at December 31, 2022
As at December 31, 2023

Included under property, plant, and equipment areright-of-use assets amounting to CHF 41.7 million(2022: CHF 42.5 million). Further information can befound in note 21 ‘Leasing’.
Maintenance and repair costs amounted to CHF 23.6
million (2022: CHF 24.8 million). The depreciation­expense of CHF 46.4 million (2022: CHF 51.2 million) is
included in the items ‘Cost of goods sold’, ‘Development costs’, ‘Marketing and distribution costs’, and­‘Administrative costs’.

As at December 31, 2023, there was no property, plantand equipment for which interest on borrowed capital
was capitalized during the preparation phase.
As at December 31, 2023, the Group had outstanding
purchase orders for capital goods amounting to CHF
4.6 million (2022: CHF 5.3 million).
In the prior-year period, allowances of CHF 4.5 million
were set aside for impairments relating to property,
plant, and equipment in Russia.

Assetsunderconstruction

24.5
18.3
– 27.2
– 1.1
14.5
35.4

Total
property,plant, andequipment

1,080.0
44.2– 20.2– 14.9– 2.2
32.8– 66.01,038.0
63.6– 54.0– 0.7– 69.3
977.6

Assetsunderconstruction

Total
property,plant, andequipment

0.0

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 145

15 Intangible assets and goodwill

Cost on acquisition
CHF m
As at January 1, 2022
Additions
Disposals
Translation differences
As at December 31, 2022
Additions
Disposals
Transfers
Translation differences
As at December 31, 2023

Accumulated amortization and impairments
CHF m
As at January 1, 2022
Amortization
Impairments
Disposals
Translation differences
As at December 31, 2022
Amortization
Disposals
Translation differences
As at December 31, 2023
Net carrying amountAs at December 31, 2022
As at December 31, 2023

Other
intangible assets

Total

– 0.3
31.6

79.5
0.2
– 0.6
– 6.3
72.8
0.3
– 0.5
0.7
– 2.7
70.6

193.5
0.2
– 0.6
– 10.2
182.9
0.3
– 0.5
0.7
– 6.3
177.1

Goodwill

Trademarks

Otherintangible assets

8.5

26.3

Goodwill

Trademarks

81.4

32.6

– 3.2
78.2

– 0.7
31.9

– 3.3
74.9

63.1
4.0

– 0.1
26.2

– 0.6
– 4.0
62.5
3.7
– 0.4
– 2.1
63.7

5.6
5.4

10.3
6.9

84.9
79.0

1.1
– 0.4
9.2

– 0.0
26.3

– 1.0
8.2

69.0
66.7

The position ‘Trademarks’ consists of the trademarks
acquired in connection with the acquisition of Bonar
Floors in 2008. ‘Other intangible assets’ consists primar-

Total

97.9
4.0
1.1
– 0.6
– 4.4
98.0
3.7
– 0.4
– 3.2
98.1

ily of the customer relations and technologies a­ cquired
as part of the acquisition of Bonar Floors.

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

Flooring Systems
Movement Systems
Total Goodwill

31.12.2023
63.3
3.4
66.7

31.12.2022
65.3
3.7
69.0

146 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

The annual impairment test of the goodwill resulted in
the reporting year in a value in use that was greaterthan the carrying amount. In the calculation of the­value in use for the detailed planning period, constant
EBITDA margins are assumed, which are around 17%
for ­Flooring Systems (2022: 19%) and around 19% forMovement Systems (2022: 19%). The growth rate uponwhich the final value is based corresponds to the­expected level of inflation (1%). The discount rate corresponds to the total weighted cost of capital before
taxes and is 9.6% (previous year: 9.4%).

In the prior year, goodwill of CHF 1.1 million arisingfrom the acquisition of the Russian vinyl plant for the
production of vinyl flooring was written off in full­because of the negative business outlook resulting
from the political and economic situation in Russia.

16 Accrued expenses anddeferred income
31.12.2023

31.12.2022

35.3
37.8
73.1

38.6
37.6
76.2

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

Accrued expenses for compensation and employee
benefits mainly comprise overtime accruals and­commissions. Other accrued expenses include accrued

volume rebates, commissions, premiums, interest andgoods and services received but not yet invoiced.

17 Provisions
Provisions
CHF m
As at January 1, 2023
Additions
Used during the year
Released during the year
Translation differences
As at December 31, 2023
Of which current provisions
Of which non-current provisions

Warranty
provisions

Environmental
provisions

3.8
2.0
– 0.6
– 0.1
– 0.2
4.9

3.5

2.7
2.2

– 3.5
0.0
0.0

Provisions
for legal
claims

Personnel
provisions

Other
provisions

37.7
6.3
– 0.6
– 1.0
– 0.1
42.3

19.6
0.8
– 9.3
– 6.0
– 0.1
5.0

0.9
– 0.5
– 0.2
0.2

65.5
9.1
– 11.0– 10.8
– 0.4
52.4

0.7
41.6

4.0
1.0

0.1
0.1

7.5
44.9

Total

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

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. Mostof 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 defined­benefit plans are assessed annually by independentactuaries 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 52%of the Group’s total pension liabilities. The FSF is a­pension plan whose benefits are based on the final
salary and which pays out a guaranteed pension forlife to its members. The composition of the pension
liabilities is as follows: 2% to active employees, 33% todeferred members and 65% 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 of ­trustees
must be composed of representatives of the company
and plan participants in accordance with the FSF’s­regulations and British pension law.
The pension plan follows an investment strategy thatis geared 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 incorporationand can be used freely by the Group. These surpluses
are therefore recognized in the balance sheet as assets
in accordance with IAS 19 revised.
The FSF is closed to new entrants for years. Employees
in the United Kingdom who meet certain criteria areoffered a defined contribution plan.

147

Pension plan in Switzerland
The Group pays contributions to an independent­pension fund as part of the occupational pension provision (known in Switzerland as the ‘second pillar’). As
a minimum benefit, this independent pension fundmust provide the beneficiary with an old-age pension
at the time of retirement. This pension is paid out of
the retirement savings capital at the start of the­pension. The Group meets these liabilities throughagreements with pension funds that cover the p­ ension
liabilities in full.
The pension liabilities of the Swiss Group companies
account for about 25% of the Group’s entire pension
liabilities. 96% of the liabilities are to employees and
4% to beneficiaries.
The Swiss pension system includes guarantees that
expose the company to the risk that it may have toprovide additional financing, for instance, if the pension fund is unable to meet its obligations or decides
to end the insurance relationship. The pension fundguarantees a minimum return and is responsible forthe payment of a pension for life once the insurance
benefits fall due. As a result of these guarantees, Swisspension plans are treated as defined benefit plans under IAS 19 revised, even though they contain essential
elements of defined contribution plans.
The company cannot participate in any surplus of thepension plan. According to Swiss pension law (BVG),
all surpluses belong to the pension plan and hence toits members.

148 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

In 2023, the pension fund announced a change to theplan rules according to which a comprehensive conversion rate will be applied from January 1, 2025. Thisadjustment to the plan resulted in a one-off profit of
CHF 2.4 million, which was posted in the income statement.
Other pension plans
Other notable defined benefit plans exist in France,
Germany, Japan, Sweden, and the USA. In the Netherlands, Forbo has also offered an early retirement plansince 2021. Access to this plan is available only up to­December 31, 2025. The commitment from this planincreased in 2023 due to revisions to the actuarial­assumptions. This led to a one-off charge of CHF 2.4
million, which was recorded in the Comprehensive­Income Statement.

The latest actuarial valuations of the present values ofdefined benefit liabilities and of service costs were
performed as at December 31, 2023, by independentactuaries using the projected unit credit method. The
fair value of the plan assets was determined as at­December 31, 2023, based on the information available when the annual financial statements were­prepared. The weighted average duration of the pension plans (‘plan duration’) is 10.4 years for the United
Kingdom, 15.6 years for Switzerland, and 12.5 years forthe other countries.
The principal assumptions underlying the actuarial
calculations are summarized as follows.

2023

2022

Actuarial assumptions
Switzerland

UK

Other

Weighted

Switzerland

UK

Other

Weighted

1.3
1.9
1.3

4.5
3.8
3.1

3.1
2.9
2.2

3.5
2.3
2.6

2.2
1.9
1.3

4.8
4.0
3.3

3.4
2.9
2.2

4.0
2.4
2.8

22
24

21
23

21
24

21
24

22
24

21
24

21
24

21
24

23
25

21
24

23
26

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 1958
Men
Women
Year of birth 1973
Men
Women

The pension costs for defined benefit plans recognized in the consolidated income statement can besummarized as follows:
2023

2022

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

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

– 0.9
1.1
– 1.0
– 0.8

0.5
6.2
– 6.2
0.5

1.5
1.3
– 0.3
2.5

1.1
8.6
– 7.5
2.2

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

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

149

Changes in pension liabilities under the defined benefit plans:
2023

2022

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

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

50.7
– 0.9
1.0
1.1
– 0.5
5.9

132.1
0.5
0.0
6.2
– 9.4
0.2
– 4.4
125.2

41.3
1.5
0.0
1.3
– 2.5
3.3
– 1.6
43.3

224.1
1.1
1.0
8.6
– 12.4
9.4
– 6.0
225.8

62.6
2.0
1.0
0.2
– 0.6
– 14.5

217.6
0.5

56.5
2.0
0.0
0.7
– 2.2
– 12.1
– 3.6
41.3

336.7
4.5
1.0
4.5
– 12.1– 89.2– 21.3
224.1

57.3

50.7

3.6
– 9.3
– 62.6– 17.7132.1

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

2023

2022

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
Translation differences
As at December 31

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

44.2
1.0
1.9
1.0
0.5

133.8
6.2
0.3

5.1
0.3
2.5
– 0.2

46.8
0.1
1.7
1.0
– 4.8

215.9
3.6
0.3

– 3.3

183.1
7.5
4.7
1.0
– 3.0

– 59.0

5.6
0.2
2.1
0.0
– 0.5

268.3
3.9
4.1
1.0
– 64.3

– 0.5

– 9.4
– 4.3
123.3

– 2.5
0.0
5.2

– 12.4
– 4.3
176.6

– 0.6

– 9.3
– 17.7
133.8

– 2.2
– 0.1
5.1

– 12.1– 17.8183.1

48.1

Actuarial gains and losses are recognized in the­balance sheet under ‘Pension liabilities’ and accounted
for directly in the Comprehensive Income Statement.

44.2

Most of the pension plans are financed in full or in partvia outsourced funds. Pension liabilities amounting to
CHF 25.3 million (2022: CHF 28.3 million) out of a totalof CHF 225.8 million (2022: CHF 224.1 million) are unfunded.

150 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Changes in the net liabilities of defined benefit plans
recognized in the balance sheet:
2023

2022

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

Switzerland

UK

Other

Total

Switzerland

UK

Other

Total

6.5
– 0.8
– 1.9
5.4
0.0
9.2

– 1.7
0.5
– 0.3
3.5
– 0.1
1.9

36.2
2.5
– 2.5
3.5
– 1.6
38.1

41.0
2.2
– 4.7
12.4
– 1.7
49.2

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

6.5

Gains and losses of defined benefit pension plans­offset in the comprehensive income statement for all
segments:
2023

2022

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

UK

Other

Total

Switzerland

UK

Other

Total

– 5.9

– 0.2

– 3.3

– 9.4

14.5

62.6

12.1

89.2

Based on adjustment of demographic assumptions

0.0

2.3

– 0.1

2.2

0.0

0.3

0.0

0.3

Based on adjustment of financial
assumptions

– 5.8

– 2.4

– 1.1

– 9.3

15.2

59.8

12.4

87.4

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

– 0.1
0.5

– 0.1
– 3.3

– 2.1
– 0.2

– 2.3
– 3.0

– 0.7
– 4.8

2.5
– 59.0

– 0.3
– 0.5

1.5
– 64.3

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

– 5.4

– 3.5

– 3.5

– 12.4

9.7

3.6

11.6

24.9

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

151

Change in the present value of defined benefit­liabilities:

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

2023

2022

+50bp

+50bp

Switzerland

UK

Other

Switzerland

UK

Other

– 4.2
1.2
0.9
1.1

– 6.1
0.0
2.9

– 2.4
1.3
2.3

– 3.6
1.1
0.8
1.1

– 6.6
0.0
2.6

– 2.4
1.4
2.2

Sensitivities –50bp

–50bp

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

Switzerland

UK

Other

Switzerland

UK

Other

4.6
– 1.2
– 0.9
– 1.1

6.6
0.0
– 3.6

2.6
– 1.1
– 2.1

4.0
– 1.0
– 0.8
– 1.0

7.2
0.0
– 3.8

2.7
– 1.2
– 2.0

The above table describes the effect of the principal
actuarial assumptions on pension liabilities. The tableshows the effect of an isolated change of a single­parameter, 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 anti­
cipated future changes in pension liabilities.

152 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Weighted average asset allocation of the defined­benefit 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 ForboGroup.
Contributions to defined benefit plans in the following
year are estimated at at the same level as in the current
year.
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, 2023, there existed the following
share-based remuneration elements:
Remuneration of the Board of Directors
Since the reporting year, the remuneration of the
Chairman of the Board of Directors is provided inlocked-up shares. The details and figures for this remuneration model are to be found on page 161 of this­Financial Report and on pages 106 as well as 112 to
114 of the Remuneration Report.
The number of shares with a three-year vesting period
allocated to the non-exe­cutive members of the Boardof Directors came to 272 in the reporting year (2022:
261)
Remuneration of the Executive Board
Long-term incentive plan
The Long-Term Incentive Plan 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 theform of performance 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

2023

2022

14.4
32.8
21.7
28.9
2.2
100.0

12.4
32.2
23.4
23.3
8.7
100.0

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 are reached,a given percentage of the PSUs will be converted intoshares after the three-year vesting period. Until andupon completion of the Long-Term Incentive Plan
2022 – 2024, converted shares are locked up for a­period of three years. As from the Long-Term Incentive
Plan 2023 – 2025, they are locked up for one year. The
relevant share price for the allocation of PSUs at thestart of the performance period is calculated from theunweighted average of the closing prices of the Forboshare 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,
90 shares (2022: 73) were allocated in the year underreview. The share price at measurement date was
CHF 1,154.34 (2022: CHF 1,861.14).
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. This part is settled inshares. As for the remaining 50% of the annual­short-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 the allocation of thisremaining 50% every year. The shares are locked up fora 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 2023 – CONSOLIDATED FINANCIAL STATEMENTS

The number of shares of Forbo Holding Ltd issued in
the year under review under the MIP was 631 (2022:
682). A further 72 shares (2022: 42) were allocated to
Executive Board members in the reporting year as partof the fixed base salary.
The amount charged to the income statement in­application of IFRS 2 for shares issued to the Board of
Directors and the Executive Board came to CHF 4.0
million in the year under review (2022: CHF 4.7 million).

153

20 Share capital andcapital management
Share capital
As at December 31, 2023, the share capital of Forbo
Holding Ltd stood at CHF 148,500 (2022: CHF 148,500),
divided into 1,485,000 registered shares with a par­value of CHF 0.10 each. Of this amount 21,419 registered shares without voting or dividend rights continued to be at the disposal of the Board of Directors.
­Consequently, 1,463,581 (2022: 1,463,581) registeredshares were eligible for dividends as at December 31,
2023.
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 theentry in the Commercial Register of the Canton of Zug
on June 16, 2022, and was published in the SHAB on
June 21, 2022.

Change of shares issued and outstanding:

Total shares outstanding
less:
Treasury shares
Treasury shares
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

31.12.2023
Number
1,485,000

ChangeNumber031.12.2022
Number
1,485,000– 56,225– 21,419– 77,644
1,407,356– 5,4040– 5,404– 5,404– 50,821– 21,419– 72,240
1,412,760i­ncludes the fully paid-up share capital, the positions‘Treasury shares’, ‘Reserves’, and ‘Translation differences’
and, as per December 31, 2023, amounted to
CHF 553.7 million (2022: CHF 550.1 million).

154 FORBO ANNUAL REPORT 2023 – 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, in­particular buildings and vehicles.

Right-of-use assets

Vehicles and otherproperty, plant, andequipment

Total property, plant, andequipment

10.4
5.9
0.0
– 5.9
– 0.5
9.9
6.3
0.0
– 5.6
– 0.7
9.9

47.3
13.5
0.0
– 15.9
– 2.4
42.5
18.7
0.0
– 16.7
– 2.8
41.7

CHF m
As at January 1, 2022
Additions
Derecognition
Depreciation
Translation differences
As at December 31, 2022
Additions
Derecognition
Depreciation
Translation differences
As at December 31, 2023

Land and buildings

Machinery and equipment

35.8
6.9
0.0
– 9.4
– 1.8
31.5
11.8
0.0
– 10.4
– 2.1
30.8

1.1
0.7
0.0
– 0.6
– 0.1
1.1
0.6
0.0
– 0.7
0.0
1.0

Interest from lease liabilities amounted to CHF 0.9 million in the year under review (2022: CHF 0.7 million).
The recognized lease liabilities came to CHF 40.0 million at year-end (2022: CHF 40.4 million), stated in thecurrent and non-current financial liabilities (see note
22 ‘Financial instruments’). The lease payments for­recognized lease liabilities, including interest, came to
CHF 17.6 million in the reporting year (2022: CHF 19.1
million).

Expenditure and payments for short-term leases cameto CHF 3.2 million (2022: CHF 4.3 million) and for leasesof low-value assets to CHF 1.1 million (2022: CHF 1.3
million).
The maturity analysis of the leasing liabilities is­reported in note 23 ‘Risk assessment and financial risk
management’.

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

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
31.12.2023
Financial assets:
Cash and cash equivalents
Trade receivables
Other receivables
Non-current financial assets
Financial liabilities:
Derivative financial instruments
Current financial liabilities
Trade payables
Other current liabilities
Non-current financial liabilities

The item ‘Derivative financial instruments’ contains
open foreign exchange hedging and swap transactions with a contract value at December 31, 2023,­totaling CHF 32.0 million (2022: CHF 80.8 million). The
foreign exchange rates can be directly observed or­determined. The derivatives are therefore assigned tohierarchy 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.
‘Current financial liabilities’ and ‘Non-current financial
liabilities’ generally correspond to the liabilities fromleasing. As at December 31, 2023, ‘Current financial

155

Carrying amount

Fair value throughprofit or loss

Amortized cost

Total

69.1
138.9
5.9
1.9

69.1
138.9
5.9
1.9

13.1
86.9
11.7
26.9

0.1
13.1
86.9
11.7
26.9

0.1

liabilities’ included current account liabilities of CHF 0
million (2022: CHF 4.9 million) and money market­financing of CHF 0 (2022: CHF 19.7 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 regrouping­between the levels of the fair value hierarchy.

156 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Classification of financial instruments

CHF m
31.12.2022
Financial assets:
Cash and cash equivalents
Trade receivables
Other receivables
Non-current financial assets
Financial liabilities:
Derivative financial instruments
Current financial liabilities
Trade payables
Other current liabilities
Non-current financial liabilities

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. The
Board of Directors in consultation with the Executive
Board ensures that risks are dealt with appropriately
and that they are duly reported. This approach gives
the Board a complete overview of the key risks andmeasures. 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

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

Market riskThis refers to the risk that market prices, above all­exchange rates and interest rates, will change. In its
day-to-day operations, the Group uses derivative andnon-derivative financial instruments to manage therisks and opportunities arising from fluctuations in­exchange rates and interest rates. The various risks­associated 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 2023 – CONSOLIDATED FINANCIAL STATEMENTS

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, forward­currency contracts, and currency swap transactions. In
order to manage counterparty risk, derivative financialtransactions are concluded only with first-class banks.
The creditworthiness of these institutions is assessedon the basis of evaluations by leading rating agencies.
As in the previous year, no hedge accounting wasused in this context in the year under review.
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 ongoingassessment 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 anappropriate 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.

157

Interest rate risks
Interest rate risks arise from changes in the fair value ofinterest-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 themon a case-by-case basis. A realistic assessment ofchanges in interest rates for the US dollar, the euro, thepound sterling, and the Swiss franc has no significant
impact on the result and the equity of the Group fromthe valuation 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 inorder to meet their commitments. Corporate Treasuryis responsible for managing liquidity. The share of theaggregate cash and cash equivalents managed by
Corporate Treasury was around 50% on December 31,
2023. At present, the Group regards a cash level ofroughly CHF 60 million as sufficient to meet its­payment obligations at all times.

158 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

The maturity structure of the existing financial liabilities is shown in the following table. These liabilities
correspond to contractually agreed maturities andrepresent nominal payment outflows. Inflows andoutflows of funds from derivative financial instruments are shown separately.

As at December 31, 2023

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

Total Cashoutflow
98.6
44.3
0.1

Remaining term
to maturity
up to
1 year
98.6
14.6
0.1

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

11.9

13.2

4.6

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

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

Default risk
Default risk is the risk of financial losses in the eventthat a customer or the counterparty in a financial­instrument fails to meet his or its obligations. The risk
consists mainly of trade receivables and bank accounts or short-term deposits with banks. The maximum amount of the default risk is the book value ofthe 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 for­further impairment of a financial asset and whether
the allowances 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 totake recourse to measures such as the realization of­collateral.
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 2023 – CONSOLIDATED FINANCIAL STATEMENTS

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 thecustomers operate, since these factors may also affectthe default risk.

159

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 industries 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

31.12.2023

31.12.2022

1.4
66.3
22.0
10.8
8.2
5.6
3.4
25.9
143.6

1.8
72.6
27.1
11.7
9.0
6.4
3.8
27.7
160.1

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

As at December 31, 2023
CHF m
Not due
Overdue ≤ 30 days
Overdue 31 – 90 days
Overdue 91 – 180 days
Overdue > 180 days
Total

Gross carrying
amount
123.0
10.5
5.5
2.6
2.0
143.6

Loss allowance
1.6
0.1
0.5
0.7
1.0
3.9

Weighted averageloss rate
1.3%
1.0%
9.1%
26.9%
50.0%
2.7%

Credit impaired
0.0
0.0
0.0
0.0
0.8
0.8

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

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

160 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Changes in valuation allowances for doubtful trade­receivables 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 operating­expenses and income’ in the income statement.

2023

2022

– 4.9
– 1.3
0.8
0.3
0.4
– 4.7

– 4.8
– 1.1
0.4
0.3
0.3
– 4.9

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

161

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

2023
2.57
0.32
0.19
3.08

2022
1.81
0.21
0.68
2.70

The compensation paid to the Executive Board consists of a fixed gross base salary in cash, short-term
variable remuneration in cash, private use of the­company 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 a­following elements: a fixed base salary portion, whichis paid in shares; short-term variable remuneration­under the Management Investment Plan (MIP) for thereporting year; and the future subscription rights,
awarded pro rata for the reporting year and weighted
in accordance with target achievement in the reporting year in the form of performance share units for the
long-term incentive plans 2021 – 2023, 2022 – 2024
and 2023 – 2025 (see note 19 ‘Employee participation
plan’).

25 Events after the balance sheet date
Between the balance sheet date and the date of­publication of this annual report no event occurredthat could have a significant effect on the 2023 ­annual
financial statements.

Board of Directors
2023
0.70
0.00
3.76
4.46

2022
1.72
0.18
2.64
4.54

Total
2023
3.27
0.32
3.95
7.54

2022
3.53
0.39
3.32
7.24

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 a company
car (only for the 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 Board members and,on the other hand, of the share-based portion of the
remuneration for the Chairman.
As at December 31, 2023 and 2022, the Group had no
significant receivables due from or liabilities to relatedparties.

162 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Group companies(as at December 31, 2023)

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 2023 – CONSOLIDATED FINANCIAL STATEMENTS 163

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

164 FORBO ANNUAL REPORT 2023 – 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 2023 – CONSOLIDATED FINANCIAL STATEMENTS 165

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

166 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Report of the statutory auditor

Statutory
Statutory Auditor's
Auditor's Report
ReportTo
To thethe General
General Meeting
Meeting ofof Forbo
Forbo Holding
Holding Ltd.,
Ltd., Baar
Baar
To the General Meeting of Forbo Holding Ltd., Baar

ReportReport on
on thethe Audit
Audit ofof thethe Consolidated
Consolidated Financial
Financial Statements
Statements
Report on the Audit of the Consolidated Financial Statements
OpinionOpinionOpinionWe
We havehave audited
audited thethe consolidated
consolidated financial
financial statements
statements ofof Forbo
Forbo Holding
Holding Ltd.
Ltd. andand its
its subsidiaries
subsidiaries (the(the Group),Group),
which
comprise
sheet
as
2023,
the
consolidated
incomestatement,which
comprisetheconsolidatedbalance
sheet
as at
at 31
31ofDecember
December
2023,Ltd.
theandconsolidated
incomestatement,
We have
auditedthe
theconsolidated
consolidatedbalance
financialstatements
Forbo Holding
its subsidiaries(theGroup),
statementofincome,
the
of
in
and
consolidated
statestatementof comprehensive
comprehensive
income,the consolidated
consolidated
statementof changes
changesin equity
equityand thetheincomeconsolidated
statewhich comprisethe consolidatedbalancesheet as at statement
31
December
2023, theconsolidated
statement,
ment
of
flows
then
and
the
financialstatements,
includingment
of cashcash
flowsforforthethe year
year
then ended,
ended,and notes
notes totothe consolidated
consolidated
financialstatements,
including materialmaterialstatementof comprehensive
income,the consolidated
statementof changes
in equityand the consolidated
stateaccounting
policyaccounting
policyinformation.
mentof cashflowsinformation.
for the year then ended, and notes to the consolidated financial statements, including material
accounting policy information.
In
In ourour opinion,
opinion, thethe consolidated
consolidated financial
financial statements
statements (pages(pages 122
122 toto 165)165) give
give aa true
true andand fairfair view
view ofof thethe consoliconsolidated
of
as
2023,
and
its
financialperformance
and
dated
financial
positionof thethe Group
Group
as at
at 31
31 December
December
2023,122
andtoofof165)
its consolidated
consolidated
financialperformanceandIn ourfinancial
opinion, position
theconsolidated
financialstatements(pagesgive a true andfair viewof the consoliits
consolidated
cash
for
the
then
in
AccountingStandards
and
its
consolidated
cash flows
flows
forGroup
the year
year
then
ended
in accordance
accordance
with
IFRS
AccountingStandards
and comply
complydated
financial positionof theas at
31 ended
December
2023, and withof
itsIFRS
consolidated
financialperformance
and
with
Swiss
with
Swiss law.
law. cash flows for the year then ended in accordance with IFRS Accounting Standards and comply
its consolidatedwith Swiss law.
Basis
Basis forfor Opinion
OpinionBasis for OpinionWe
We conductedconducted ourour audit
audit inin accordance
accordance with
with Swiss
Swiss law,
law, International
International Standards
Standards on
on Auditing
Auditing (ISA)(ISA) andand Swiss
Swiss
Standardson(SA-CH).
Our
under
those
and
standards
further
described
Standards
on Auditing
Auditing(SA-CH).
Our responsibilities
responsibilities
under
those provisions
provisions
andon
standards
arefurther
described
We
conducted
our auditin accordancewith Swiss law,International
Standards
Auditing are(ISA)
and Swissinthe
Responsibilities
Audit
sectionofWeWe
inthe “Auditor’s“Auditor’s
Responsibilities
forthe
Audit ofof thethe Consolidated
Consolidated
Financial
Statements”
sectionof ourour report.
report.
Standards
on Auditing(SA-CH). for
Ourtheresponsibilities
under thoseFinancial
provisionsStatements”
and standards
are further
described
provisions
Swiss
together
theofare
independentofaccordancewithareindependentof thethe GroupGroup inin foraccordancewiththeprovisions ofof
Swiss law,
law,
together withwiththe requirements
requirementsofsectionof
our report. We
in the“Auditor’s Responsibilities
the Audit ofthetheConsolidated
Financial
Statements”
the
audit
as
as
the
Standards
Board
forInternathe
Swissauditprofession,
profession,aswellwell
as thosethose ofofwiththe International
International
EthicsStandards
Board withfor Accountants’
Accountants’
Internaare Swiss
independentof the Groupin accordancetheprovisionsEthics
of Swiss
law, together
the requirementsoftionalCodeoffor
Accountants(including
Independence(IESBAtionalCodeof Ethics
Ethicsfor Professional
Professional
Accountants(including International
International
IndependenceStandards)(IESBAthe Swiss
audit
profession,as well as thoseof the International
Ethics Standards
Board forStandards)
Accountants’
InternaCode),
and
have
our
ethicalwithCode),Codeand wewehave fulfilledfulfilled
our otherotherAccountants
ethical responsibilities
responsibilities
in accordance
accordanceIndependencewith these
these requirements.
requirements.
tionalof Ethics
for Professional(including inInternational
Standards) (IESBA
Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements.
We
We believe
believe thatthat thethe audit
auditevidence
evidence we
we havehave obtained
obtained is
issufficientsufficient andand appropriate
appropriate toto provide
provide aa basis
basis forfor our
our opinopinion.
ion.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Key
Key Audit
Audit Matters
Matters
Key Audit Matters
VALUATIONVALUATION OF
OF INVENTORIESINVENTORIESVALUATION
OF
Key
audit
mattersareKey audit mattersINVENTORIES
are those
those mattersmatters that,
that, inin ourour professional
professional judgment,
judgment, were
were ofof mostmost significancesignificance inin ourour audit
audit ofof

thestatementsofcurrent
period.
matters
wereaddressed
inof
the consolidated
consolidated
financialstatementsof thethecurrent
period. These
These
matters
wereaddressedin thethe context
contextof ourourKeyaudit mattersfinancial
are thosematters that,in ourprofessional
judgment,
wereof mostsignificancein our audit
of
audit
of
financialstatements
as
and
in
our
opinion
thereon,audit
of thethe consolidated
consolidated
financialstatements
asaa whole,
whole,
andThese
in forming
forming
ourwereopinion
thereon,andwe do
do notnotprothe consolidated
financialstatementsof the current
period.
matters
addressed
inand
the wecontext
of proourvide
opinionthesevide aaofseparate
separate
opinion ononthese matters.
matters.
audit
the consolidated
financialstatements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
VALUATIONVALUATION OF
OF INVENTORIESINVENTORIESVALUATION OF INVENTORIESKeyKey Audit
Audit Matter
MatterKey
Audit
MatterInventoryat
Inventory as
as
at 31
31 December
December 2023
2023 amounted
amounted toto CHFCHF

Our
Our response
response
Our
responseWe
performed
We mainly
mainlyperformed thethe following
following audit
audit procedures:procedures:

264.2
million(31
316.2
million)
264.2
million(31
December
2022:
CHF
316.2 tomillion)Inventory
as at
31December
December2022:
2023 CHF
amounted
CHF
We mainly performed the following audit procedures:
and
one
of
the
most
material
asset
positions.
obtainedanofDierepresents
VorräteAnschaffungsHerstelUnter
Berücksichtigung
der unterschiedlichen
Ausandrepresents
one
ofzu
the
most
material
asset
positions.
We
obtained
an understanding
understandingof thethe processprocess rere264.2
millionwerden(31
December2022:
CHFbzw.
316.2
million) ‒-- We
lungskosten
angesetzt
undperiodischauf
Werthal- - lated
gestaltungendesinternen
Kontrollsystems
in einValuation
allowance
inventories
as31
Decembertoandvaluation
obsolete
inlatedto thethe identification
identification
andvaluation
obsolete
inValuation
allowanceforinventories
as atatasset31ihreDecemberandrepresents
one offorthemostmaterial
positions.
We
obtainedanunderstandingof the processre2023
toCHF
million(31
ventories.
onzelnenhabenassessedwir
die Wirktigkeitamountedüberprüft.
bestehtbei
denas
Produkten
in Arbeit
2023
amounted
toEs
CHF
-28.4
million(31
Decemberventories.
Basedon this,this, we
we criticallycriticallyassessed
Valuation
allowancefor -28.4
inventories
atDecember
31 December
lated
to Tochtergesellschaften,
theBased
identification
andvaluation
obsolete
in2022:
CHF
million).
Valuationofinventories
iswhetherareaccurately
samkeittransactionsvonSchlüsselkontrollen
im andZusammenund Fertigprodukten
das-28.4
Risiko,dass
die
Herstellungs2022:
CHF -33.8-33.8tomillion).
Valuationof(31inventories
iswhethertransactions
are completely
completely
andaccurately
2023
amounted
CHF
millionDecemberventories.
Basedon this,we criticallyassessedkostenCHF
über-33.8
demVerkaufspreis
der nochanhang mittransactions
derBewertungvon Vorräten
geprüft.
Insconsequentlyoftounderstandingofrecordedintheaccounts.
consequentlyof significancesignificanceto ananabzüglich
understandingof
therecordedintheaccounts.
2022:
million).
Valuationof inventories
isthe
whetherare completely
andaccurately
fallenden
Fertigstellungs-,
und Verwaltungsbesondere
wir an der Bestandesinventur
financialstatements.
financialstatements.
consequentlyof significanceVertriebsto an understandingof therecordedin haben
the accounts.
kosten liegen(verlustfreie Bewertung).
teilgenommen und Testzählungen durchgeführt.
financialstatements.
Die Bestimmung der Wertberichtigung beinhaltet entsprechend gewisse Ermessenselemente.

‒

Wir haben die Angemessenheit der Prozesse zur
Identifikation von obsoleten Vorräten beurteilt sowie die Grundlage und die Methode zur Bewertungdieser Vorräte kritisch gewürdigt. Die Berechnung
der Wertberichtigung für obsolete Waren haben wir
rechnerisch nachvollzogen und die zugrunde liegenden Inputparameter geprüft.

‒

Des Weiteren haben wir die verlustfreie BewertungFORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 167

Die Vorräte
werden zu AnschaffungsHerstel‒Inventory
is recognizedat acquisition orbzw.
manufacturing
lungskosten
angesetztassessed
und periodischWerthalcosts
and periodicallyin termsaufof ihrerecoverabilInventory
is recognizedatworkacquisitionor manufacturing
tigkeitüberprüft.
bestehtbeiinden
Produkten
in Arbeit ity.
There
a riskEs
thatforprogress
and finished
costs
and
assessedindassterms
ofHerstellungsrecoverabilund Fertigprodukten
dasRisiko,die
goods
the periodicallymanufacturingcosts exceed
theactual sales
ity.
There
is
adem
risk distribution
thatfor workand
in abzüglichprogressandfinished
kostenüber
Verkaufspreis
der nochanpricelessselling,administrative
costs
goods
the manufacturing
costs
exceedtheVerwaltungsactual sales
fallenden
Fertigstellungs-,
Vertriebsund(netrealizablevalue).
pricelessselling,
distribution
and administrative
costs
kostenliegen(verlustfreie
Bewertung).
Die
Vorrätewerdenzu Anschaffungsbzw. Herstel‒lungskosten
angesetzt
periodischauf ihre Werthal(netrealizablevalue). undvaluation
Furthermore,determining
allowances
thereDie involves
Bestimmung
derbesteht
Wertberichtigung
beinhaltet
ent- ‒tigkeitüberprüft.
Esbeiofden
Produkten
in Arbeitfore
a certain
degreejudgment.
Furthermore,determining
valuation
allowances
theresprechend
gewisseErmessenselemente.
undFertigprodukten
das Risiko,dassdie Herstellungskostenüber dem
Verkaufspreis
fore
involves
a certain
degree of abzüglich
judgment.der noch anfallenden Fertigstellungs-, Vertriebs- und Verwaltungskosten liegen (verlustfreie Bewertung).
Die Vorräte werden zu Anschaffungs- bzw. Herstel‒lungskosten
angesetzt
und periodisch auf
ihre WerthalDie Bestimmung
der Wertberichtigung
beinhaltet
ent- ‒
tigkeitüberprüft.
Es besteht
bei den Produkten in Arbeit
sprechend
gewisseErmessenselemente.
und Fertigprodukten das Risiko, dass die Herstellungs- ‒kosten über dem Verkaufspreis abzüglich der noch anfallenden Fertigstellungs-, Vertriebs- und Verwaltungskosten liegen (verlustfreie Bewertung).
For further information on inventories refer to the following:

Unter Berücksichtigung
der unterschiedlichen
AusConsidering
the diverse designof internal control
ofgestaltungendes internen
Kontrollsystems
in ofeinindividual
subsidiaries,
we tested
the efficacy
Considering
theconnection
diverse designinternalzelnenTochtergesellschaften,haben
wir control
dieof
Wirkkey
controls
inwith ofthevaluation
in-ofindividual
subsidiaries,
we participatedtested im
theZusammenefficacy
ofsamkeit von
Schlüsselkontrollen
ventories.
In particular,
wein the inkey
controls
connection
withthe valuationof Insinhangmitderincounts
Bewertung
Vorrätengeprüft.
ventorystock
and vonperformed
test
counts.
ventories.
particular,
weder
participatedin the inbesondereInhaben
wir anBestandesinventur
ventorystock counts
andderperformed
test counts.
teilgenommen
undTestzählungendurchgeführt.
We
assessedtheadequacyof the processes
toAusUnter
Berücksichtigung
unterschiedlichen
gestaltungendesinventories
internen Kontrollsystems
in einidentify
obsoleteand critically evaluat
eddWe
assessedadequacy usedof theto
Wirbasishaben
dietheAngemessenheit
derProzesse
zur
the
and
methodology
toprocesses
value
these
inzelnen
Tochtergesellschaften,haben
wir die
Wirkidentify
obsoleteinventories
andcriticallyevaluated
Identifikationvonobsoleten
Vorrätenbeurteilt
soventories.
WeSchlüsselkontrollen
verifiedthe calculationoftheallowsamkeitvonim Zusammenthe
andmethodology
used
to
value
these
inGrundlage
und die
Methodezurgeprüft.
Bewertungwiebasis
die
hang
mit
der Bewertungvon
Vorräten
Insanceforobsoleteinventories
andtestedtheunderventories.
We
verifiedcalculation
the allowdieser
Vorrätekritischgewürdigt.
Die of
Berechnung
besonderehaben
wir theanderBestandesinventur
lying
input
parameters.
ancefor obsolete
inventories
and tested
theunderder Wertberichtigung
für obsolete
Waren
haben
wir
teilgenommen
undTestzählungendurchgeführt.
rechnerischnachvollzogen
unddie zugrunde
Unter
Berücksichtigung
der valuation
unterschiedlichen
AusFurthermore,in testing theof inven-lielying
input
parameters.
gestaltungeninternen
Kontrollsystems
in eingenden
geprüft.
Wir
haben
diedesAngemessenheit
der Prozesse
zur
toriesat Inputparameter
lower
of
cost
or netrealizablevalue,
zelnenTochtergesellschaften,
haben ofwirinvendie
WirkFurthermore,intestingvaluationwecomparedcosts
and thesales
prices.
This
wasIdentifikationvonobsoleten
Vorrätenbeurteilt
soverlustfreie
DesdieWeiteren
haben
wir
die
samkeitvonSchlüsselkontrollen
im zurZusammenund
MethodeBewertungwie
toriesatGrundlage
lowerof costordie
netrealizablevalue,
doneona case-by-case
basis
based
on
a
hang
mit
Bewertungvon Vorräten
geprüft.
we
costs
and
sales
prices.
This
wasInsdercompared
Vorrätedurch
Gegenüberstellen
Kostendieser
Vorrätekritischgewürdigt.
DievonBerechnung
sample
order
mass
data
analysis.
besonderehaben wirfür
anobsolete
der Bestandesinventur
done
on a case-by-case
basis
based
on a
undWertberichtigung
Verkaufspreisenüberprüft.
Dieserfolgte
fallder
Waren
haben
wir
weise imorRahmenvonStichproben
oder
unterlieBeteilgenommen
undTestzählungensamplemass
data
analysis.
rechnerischnachvollzogen
und diedurchgeführt.
zugrunderücksichtigung
von Massendatenanalysen.
gendenInputparameter
geprüft.
Die Bestimmung der Wertberichtigung beinhaltet ent- ‒ Wir haben die Angemessenheit der Prozesse zur
For further
inventoriesaccounting
refer to thepolicies:
following:—
Note 2 information– Summaryon
of significant
Inventories page 132
obsoleten
Vorräten beurteilt
sosprechend gewisse Ermessenselemente.
Bewertung‒ Identifikation
Des Weiterenvon
haben
wir die verlustfreie
wie
die
und
die Methode zur
BewertungWeiterezu densind an folgenden Stellen
im Grundlage
AnhangKonzernrechnung
enthalten:
der Vorräte
durchderGegenüberstellenvonKosten—NoteInformationen
13 – Inventories,
pageVorräten
143— Note 2 – Summary of significant accounting policies: Inventories page 132
dieser
Vorräte kritischüberprüft.
gewürdigt.Dies
Die erfolgte
Berechnung
und Verkaufspreisen
fall—
13 – Inventories,
page 143derWertberichtigung
obsolete Waren
wir
weise
imund
RahmenvonfürStichprobenoder haben
unter— NoteErläuterung
2 – Zusammenfassung
wesentlicher BilanzierungsBewertungsmethoden:
Vorräte,S. Be132
rechnerischnachvollzogen
und die zugrunde lierücksichtigung
von Massendatenanalysen.
— Erläuterung 13 – Vorräte, S. 143
genden Inputparameter geprüft.
Other Information
Bewertung‒ Stellen
Des Weiterenhaben
wir die verlustfreieenthalten:
Weitere Informationen zu den Vorräten sind an folgenden
im Anhang
der Konzernrechnung
Other
Information
The Boardof Directors is responsible for the other information.derTheother information
comprises thevon
information
Vorrätedurch Gegenüberstellen
Kostenincludedin the annual
report, but does notwesentlicher
include the consolidated
financialstatements,
the stand-alone
financial
und Verkaufspreisenüberprüft.
DiesVorräte,erfolgte—
Erläuterung2–
Zusammenfassung
Bilanzierungsund
Bewertungsmethoden:
S.fall132
Sonstige Informationen
The Board ofis responsible
other information.
The other
information
comprises
theinformation
weise
imvon Stichproben
oder
unterandBestatementsof Directors
the company,
the tablesfor
andthesections
marked “audited”
in Rahmen
theremuneration
and annual
report—Erläuterung
13–
Vorräte,S.
143
includedin theannualreport, but does not include the consolidated
financial statements,
the stand-alone financial
ourauditor’sreports
thereon.
rücksichtigung
von Massendatenanalysen.
Der Verwaltungsrat ist für die sonstigen Informationen verantwortlich. Die sonstigen Informationen umfassen die
statements of the company, the tables and sections marked “audited” in the remuneration and annual report andim Geschäftsbericht enthaltenen Informationen, aber nicht die Konzernrechnung, die Jahresrechnung, die als „geour auditor’sreports
thereon. financial statements does not cover the other information and we do not express
Our
opinion on
the consolidated
prüft“ gekennzeichneten Tabellen und Stellen im Vergütungs- und Geschäftsbericht und unsere dazugehörigen
anyformInformationenof assurance conclusion
thereon.
Weiterezu den Vorräten
sind an folgenden Stellen im Anhang der Konzernrechnung enthalten:
Berichte.
Our opinion on the consolidated financial statements does not cover the other information and we do not express
Sonstigeanyform
ofInformationen
assurance
conclusion
thereon.
In
with2 ourauditof the consolidated
financialstatements, ouris to read theother S.
infor—connection
Erläuterung– Zusammenfassung
wesentlicher
Bilanzierungsundresponsibility
Bewertungsmethoden:
Vorräte,132
Unser Prüfungsurteil zur Konzernrechnung erstreckt sich nicht auf die sonstigen Informationen, und wir bringenmation and, in doing so, consider whether the other information is materially inconsistent with the consolidated
Der
Verwaltungsrat
ist
für die sonstigen
Informationen
verantwortlich.
keinerlei
Form vonPrüfungsschlussfolgerunghierzu zum
Ausdruck. Die sonstigen Informationen umfassen die—connection
Erläuterung– Vorräte,
S. 143In
with13ourof theconsolidated
statements,
our appears
responsibility
to read theother inforfinancial
statements
orauditour knowledge
obtained financial
in the audit
or otherwise
to be ismaterially
misstated.
im Geschäftsbericht
aberinformation
nicht die Konzernrechnung,die Jahresrechnung,die als „gemation
and, in doing enthaltenenso, considerInformationen,
whether the otheris materially inconsistent
with the consolidated
Im
Zusammenhang
mit
unsererAbschlussprüfung
haben
wir
die
Verantwortlichkeit,
diesonstigen
Informationen
prüft“ gekennzeichneten
Tabellenund obtained
Stellen iminVergütungsund Geschäftsbericht
undunsere dazugehörigen
financialstatementsorourknowledge
the
audit
or
otherwise
appearstobematerially
misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other inforzu lesen und dabei zu würdigen, ob die sonstigen Informationen wesentliche Unstimmigkeiten zur KonzernrechBerichte.
mation, we are required to report that fact. We have nothing to report in this regard.
nung oder unseren bei der Abschlussprüfung erlangten Kenntnissen aufweisen oder anderweitig wesentlich
If, based on the work we have performed, we conclude that there is a material misstatement of this other inforSonstige
Informationen
falschdargestellterscheinen.
Unser
Prüfungsurteil
zurtoKonzernrechnung
erstreckt
sich nicht
auf die
Informationen, und wir bringenmation,
we are required
report that fact. We
have nothing
to report
in sonstigen
this regard.
keinerlei Form von Prüfungsschlussfolgerung hierzu zum Ausdruck.
Boardof
Directors’
Responsibilities
fortheConsolidated
Financial
Statements
Der Verwaltungsrat
ist für
sonstigen
Informationen
verantwortlich.
Die sonstigen
Informationen
umfassendieFalls
wir auf Grundlage
derdievonuns durchgeführten
Arbeitenden Schluss
ziehen, dasseine wesentliche
falscheim Geschäftsbericht
enthaltenen
Informationen,
aber
nicht
diedieKonzernrechnung,die die
Jahresrechnung,die als Wir„geDarstellung
dieser sonstigen
Informationen
vorliegt,
sind wir
verpflichtet,über dieseTatsachezu berichten.
Im
Zusammenhang
mit
unsererAbschlussprüfung
haben
Verantwortlichkeit,
sonstigen
Informationen
consolidated
financial statements that give a true
The Boardof Directors
is responsible forof theBoardof Directors’
Responsibilities
forthethepreparation
Consolidated
Financial
Statements
prüft“gekennzeichneten
Tabellenim Informationen
Vergütungs- undGeschäftsbericht
und unsere
zu
lesen
dabei
zu würdigen,obund
die Stellensonstigenwesentliche
Unstimmigkeiten
zurdazugehörigen
Konzernrechhaben
inund
diesemZusammenhang
nichtszu berichten.
and fair view in accordance with IFRS Accounting Standards and the provisions of Swiss law, and for such interBerichte.
nung
oder
unserenbeiderAbschlussprüfung
erlangten
Kenntnissen
aufweisenoderanderweitig
wesentlichfinancial statementsthat givea trueThecontrol
Board asof Directors
for the preparationof thetoconsolidatednal
the Boardisofresponsible
Directors determines
is necessary
enable the preparationof consolidated
financial
falscherscheinen. IFRS Accounting Standards and the provisions of Swiss law, and for such interand
fairdargestellt
viewthatin accordancestatements
are free fromwith
material misstatement, whether due to fraud or error.
Unser Prüfungsurteil zur
Konzernrechnung
erstreckt
nicht auf die sonstigen Informationen, und wir bringen
Verantwortlichkeiten
desVerwaltungsrates
für diesich
Konzernrechnung
nal control as the Board of Directors determines is necessary to enable the preparation of consolidated financial
keinerleiForm
von Prüfungsschlussfolgerunghierzuzum Ausdruck.
Falls
wir aufGrundlage
der von uns durchgeführten
Arbeitenden Schluss ziehen, dass eine wesentliche falsche
statements
free from financial
material statements,
misstatement,
to fraud
or error.
In preparingthat
the areconsolidated
the whether
Board ofdue
Directors
is responsible
for assessing the Group’s
Der Verwaltungsrat
ist verantwortlichfür die Aufstellung
einer
Konzernrechnung,die inTatsacheÜbereinstimmung
mit Wirden
Darstellung
dieser sonstigen
Informationen
vorliegt, sind
wir verpflichtet,über diesezu berichten.
ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the
IFRS
AccountingStandards
unddengesetzlichen
Vorschrifteneindentatsächlichen
Verhältnissen
entsprechenIm
Zusammenhang
mit
unsererAbschlussprüfung
haben
wir
die
Verantwortlichkeit,
diesonstigen Informationen
haben
indiesemZusammenhang
nichtszu
berichten.
In preparing
thebasisconsolidated
financialstatements,
theof Directors
is responsible
for assessing
Group’s
going
concernof accounting
unlessthe BoardofBoardDirectors
either intends
to liquidate
the Group the
or to
cease
zu lesenund dabeiundzu würdigen,ob dieKontrollen,
sonstigen Informationen
wesentliche
Unstimmigkeiten
zurum
Konzernrechdes
Bild vermittelt,
für die internen
die der Verwaltungsrat
als notwendig
feststellt,
die Aufstelability to continue
going concern,
disclosing,operations,or hasasnoarealistic
alternative
but to doas
so.applicable, matters related to going concern and using thenungeiner
oderKonzernrechnung
unseren bei der Abschlussprüfung
erlangtenoder anderweitig
wesentlichlungzu ermöglichen, diefrei von Kenntnissen
wesentlichenaufweisenfalschen Darstellungenaufgrundvon dologoing concern basis of accounting unless the Board of Directors either intends to liquidate the Group or to cease
falschdargestellt odererscheinen.
sen Handlungen
Irrtümern
ist.
Verantwortlichkeiten
des Verwaltungsrates
die Konzernrechnung
operations,or has no realistic
alternative but to für
do so.
Falls
wirAufstellung
auf Grundlage
der von uns durchgeführten
Arbeiten
Schlussziehen,dasseinewesentliche
falscheBei derderKonzernrechnung
istAufstellung
der Verwaltungsrat
dafürverantwortlich,
Fähigkeit
des Konzerns
Der
Verwaltungsrat
ist verantwortlichfür dieeinerdenKonzernrechnung,
die
indie
Übereinstimmungmit
den
zur FortführungderGeschäftstätigkeit
zu beurteilen,
Sachverhalte
im Zusammenhang
mit der zu
FortführungderDarstellung
diesersonstigen
Informationen
vorliegt,
sind wir verpflichtet,über diese Verhältnissen
Tatsacheberichten.
Wir
IFRS
AccountingStandards
undden gesetzlichen
Vorschriftenein dentatsächlichen
entsprechenhaben
diesem Zusammenhang
nichtszu berichten.
des Bildinvermittelt,
und für die internen
Kontrollen,
die der Verwaltungsrat als notwendig feststellt, um die Aufstellung einer Konzernrechnung zu ermöglichen, die frei von wesentlichen falschen Darstellungen aufgrund von dolosen Handlungen oder Irrtümern ist.
Verantwortlichkeiten des Verwaltungsrates für die Konzernrechnung
Bei der Aufstellung der Konzernrechnung ist der Verwaltungsrat dafür verantwortlich, die Fähigkeit des Konzerns
Der
Verwaltungsrat
verantwortlich fürAufstellung
einer Konzernrechnung,die in Übereinstimmung
mitderden
zur Fortführung
der istGeschäftstätigkeit
zudie
beurteilen,
Sachverhalte
im Zusammenhang
mit der Fortführung
IFRS Accounting Standards und den gesetzlichen Vorschriften ein den tatsächlichen Verhältnissen entsprechendes Bild vermittelt, und für die internen Kontrollen, die der Verwaltungsrat als notwendig feststellt, um die Aufstel-168 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Report of the statutory auditor

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, ISA 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, ISA and SA-CH, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:— Identify and assess the risks of material misstatement of the consolidated financial statements, whether due
to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence
that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
— Obtain an understanding of internal control relevant to the audit in order to design audit procedures that areappropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of theGroup’s internal control.
— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimatesand related disclosures made.
— Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions
that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that amaterial uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosuresin the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future
events or conditions may cause the Group to cease to continue as a going concern.
— 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 business activities within the Group to express an opinion on the consolidated financial statements. We are responsible
for the direction, supervision and performance of the Group audit. We remain solely responsible for our audit
opinion.
We communicate with the Board of Directors or its relevant committee regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with the Board of Directors or its relevant committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period andare therefore the key audit matters. We describe these matters in our auditor’s report, unless law or regulationprecludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably
be expected to outweigh the public interest benefits of such communication.

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 169

Report on Other Legal and Regulatory Requirements
Report on Other Legal and Regulatory Requirements

In accordance with Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists,
which
hason
been
designed
forpara.
thepreparationof andthe Requirements
consolidated
financialstatements
accordingto theinstructions
Inaccordance
with
Art.Legal
728a
1Regulatory
item 3 CO
PS-CH 890, we
confirmthat an internal
controlsystemexists,ReportOther
andofthe Boardof Directors.
which
has been
designed for the preparation of the consolidated financial statements according to the instructionsofthe Board ofwith
Directors.
In accordanceArt. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists,
Report
Other
Legal
and
Regulatory
Requirements
We
recommend
that theconsolidated
financialstatements
submitted
to yoube approved.
which
hason
been
designedfor thepreparationof theconsolidated
financialstatements
according to the instructions
Wethe
recommend
that the consolidated financial statements submitted to you be approved.
of
Board of Directors.
In accordancewith Art. 728a para. 1 item 3 CO and PS-CH 890, we confirm that an internal control system exists,
KPMG
AG
which
has
for the preparationof theconsolidated
financialstatements
according to the instructions
We
recommend
that the consolidated
financialstatements
submitted
to yoube approved.
KPMG
AG been designedof the Board of Directors.
KPMG AG
We
recommend that the consolidated financial statements
submitted to you be approved.
{{Signatureleft}}{{Signatureright}}{{Signatureleft}}{{Signatureright}}
KPMG
RegulaAG
ToblerAndré Stampfli
Licensed
Audit Expert
Licensed
Audit Expert
RegulaTobler
AndréStampfli{{Signatureleft}}{{Signatureright}}
Auditor in Audit
ChargeLicensedExpertLicensed Audit Expert
Regula Tobler
André Stampfli
Auditorin Charge{{Signatureleft}}{{Signatureright}}
Licensed Audit Expert
Licensed Audit Expert
AuditorChargeZurich, 4inMarch
2024
Regula Tobler
André Stampfli
Zurich, 4 March 2024
Licensed Audit Expert
Licensed Audit Expert
Auditor in Charge
Zurich, 4 March 2024
Zurich, 4 March 2024

KPMG AG, Badenerstrasse 172, CH-8036 Zurich
KPMG AG, Badenerstrasse 172, CH-8036 Zurich© 2024 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.
© 2024 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliated
KPMG AG, Badenerstrasse 172, CH-8036 Zurichwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.
© 2024 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.
KPMG AG, Badenerstrasse 172, CH-8036 Zurich© 2024 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.

170 FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS

Consolidated balance sheets
2019 – 2023
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

31.12.2023

31.12.2022

31.12.2021

31.12.2020

31.12.2019

523.2
69.1
0.0
138.9
35.9
15.1
264.2
378.2
1.9
30.7
266.6
79.0
901.4

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

31.12.2023

31.12.2022

31.12.2021

31.12.2020

31.12.2019

219.3
13.2
86.9
22.4
16.2
80.6
128.4
26.9
7.4
44.9
49.2
347.7
553.7
0.1
– 0.0
553.6
901.4

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

FORBO ANNUAL REPORT 2023 – CONSOLIDATED FINANCIAL STATEMENTS 171

Consolidated income statements
2019 – 2023
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

2023

2022

2021

2020

2019

1,175.2– 773.5
401.7– 15.7– 168.5– 80.1– 17.2
9.7
129.9
5.7
– 3.8
131.8
– 29.5102.3

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

172

FINANCIAL REPORT
Financial statements for Forbo Holding Ltd173
Balance sheet
174
Income statement
175
Notes to the financial statements
176
Proposal for appropriation of available earnings
179
Report of the statutory auditor
180

174 FORBO ANNUAL REPORT 2023 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Balance sheet for Forbo Holding Ltd

AssetsCHF mCurrent 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 mCurrent 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

31.12.2023

31.12.2022

102.3
0.1
101.9
0.3
312.5
23.2
289.3
414.8

0.5
0.1
0.1
0.3
385.6
96.3
289.3
386.1

31.12.2023

31.12.2022

6

0.8
0.1
0.5
0.2
414.0
0.1

17.2
0.1
16.8
0.3
368.9
0.1

8

15.6
0.0
1.2

15.6
0.0
2.5

387.5
87.2
– 77.6
414.8

283.8
139.0
– 72.1
386.1

Note

2

3
4

Note

2

8

FORBO ANNUAL REPORT 2023 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 175

Income statement for Forbo Holding Ltd

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

2022

94.8
1.7
96.5

149.6
0.5
150.1

2023

2022

5.5
3.8
0.0
9.3
87.2

5.4
5.7
0.0
11.1
139.0

Note

1.1. – 31.12.
Expenses
CHF mAdministrative expenses
Financial expenses
Direct taxes
Total expenses
Net profit for the year

2023

Note

9
10
5

176 FORBO ANNUAL REPORT 2023 – 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 in­accordance with the provisions on accounting and­financial reporting of the Swiss Code of Obligations(32nd title 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 the­provisions on accounting and financial reporting, thefinancial 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; unrealizedexchange losses were booked, while unrealized­exchange gains were not recognized. The item­
­contained loans at a level of EUR 24.8 million (2022:
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, 2023, 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 credit­balances on cash pool accounts.

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 2023 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 177

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,
2023, remained unchanged against the previous year
at CHF 16,645.

6 Share capital
As at December 31, 2023, the share capital of Forbo
Holding Ltd totaled CHF 148,500 (2022: CHF 148,500),
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, Forbo­Holding Ltd bought back a total of 165,000 Forbo registered shares 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 at a 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 with the corresponding amendment
to the Articles of Association. The capital reduction wascompleted with the entry in the Commercial Registerof the Canton of Zug on June 16, 2022, and was­published in the SHAB on June 21, 2022. The exchange
adjustment took place on the same day.

Treasury shares
As at January 1, 2023
Additions
Disposals
As at December 31, 2023

8 Treasury shares
The treasury shares directly held in Forbo Holding Ltd
amounting to CHF 77.6 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 Forbo­Holding Ltd, amounting to CHF 1.2 million. Overall, thetreasury shares held directly and indirectly developed asfollows over the period under review:

Cost
CHF
74.5
18.1
– 13.878.8

Number ofregistered shares
72,24015,072– 9,668
77,644

178 FORBO ANNUAL REPORT 2023 – 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 D
­ irectors,
the auditor’s fees, and usual administrative costs,
mainly for the Ordinary General Meeting, the shareregister, insurance, and legally required announcements. Forbo Holding Ltd does not employ any­personnel.

Guarantees and letters of support to third parties infavor of Group companies amounted to CHF 8.3 million
at year-end 2023 (2022: CHF 5.9 million), of which
none were utilized.

10 Financial expenses
The financial expenses reflect primarily foreign­currency losses on loans to Group companies.

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 of­publication of this annual report no event occurredthat could have a significant effect on the 2023 ­annual
financial statements.

FORBO ANNUAL REPORT 2023 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 179

Proposal for appropriation of available
earnings of Forbo Holding Ltd
The Board of Directors proposes to the Ordinary­General Meeting that the available retained earnings,
consisting of:
2023
CHF m
Net profit
Retained earnings
Treasury shares
Total at the shareholders’ meeting’s disposal

87.2
387.5
– 77.6397.1

be appropriated as follows:
2023
CHF m
Distribution ordinary dividend
To be carried forward
Total at the shareholders’ meeting’s disposal

At the Ordinary General Meeting of April 5, 2024, theBoard of Directors will propose an ordinary gross­dividend of CHF 25.00 per registered share (2022: CHF
23.00). 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.

35.2
361.9
397.1

180 FORBO ANNUAL REPORT 2023 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Report of the statutory auditor

Statutory
Statutory Auditor's
Auditor's Report
ReportTo
To thethe General
General Meeting
Meeting ofof Forbo
Forbo Holding
Holding Ltd.,
Ltd., Baar
Baar
To the General Meeting of Forbo Holding Ltd., Baar

ReportReport on
on thethe Audit
Audit ofof thethe Consolidated
Financial Statements
Financial Statements
Report on the Audit of the Financial Statements
OpinionOpinionOpinionWe
We havehave audited
audited thethe consolidated
financial statements
financialofstatements
Forbo Holdingof Forbo
Ltd. (theHoldingCompany),Ltd. andwhich
its subsidiaries
comprise the(thebalanceGroup),
which
sheet
as
compriseat
31 December
the
2023,
and
balancethe income
sheetasstatementat
31 December
for
the
year
2023,
then
the
ended,
consolidated
andcomprisenotes
incometo thestatement,
financial
We have
auditedtheconsolidated
financialstatementsof Forbo
HoldingLtd.
(theCompany),whichbalancestatement
statements,
includingcomprehensive
a summaryincome,of thesignificant
the income
consolidated
accounting
statement
policies.
of yearchanges
equityandandnotes
the consolidated
statesheet as atof31
December2023,
andstatement
forthethen inended,
to the financial
ment
of cashincluding
flows for theyear thenofended,and notes
to the policies.
consolidated financial statements, including material
statements,
a summarysignificant
accounting
accounting
In our opinion,
policytheinformation.
financial statements (pages 174 to 178) comply with Swiss law and the Company’s articles
ofincorporation.
In ouropinion, the financial statements (pages 174 to 178) comply with Swiss law and the Company’s articles
In
opinion, the consolidated financial statements (pages 122 to 165) give a true and fair view of the consoliof ourincorporation.
dated financial position of the Group as at 31 December 2023, and of its consolidated financial performance and
its
Basis
consolidated
for Opinion
cash flows for the year then ended in accordance with IFRS Accounting Standards and comply
with
Swiss
law.
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
forresponsithe Audit
We conducted
our auditin accordancewith Swisslaw and
Swiss Standards
on Auditing(SA-CH). Ourofthe Financial
Statements”
of our report.
We aredescribedindependentof“Auditor’s
the Company
in accordance
the
Basis
for
Opinionbilities
under
those
provisionssection
and standards
are further
in theResponsibilities
for with
the Audit
provisionsof Swiss
law, together
withoftheof independent
the Swiss audit
profession
andhave fulfilledof the Financial
Statements”
sectionourrequirements
report. We areof theCompany
inweaccordancewith our
the
We
other
conducted
ethicalour audit
accordancein accordancewithrequirements
with
Swiss
these
law, requirements.
Internationalon Auditing(ISA)
andfulfilled
Swiss ourprovisionsof responsibilities
Swiss
law,intogetherwith theof the SwissStandards
audit profession
and wehaveStandards
onresponsibilities
Auditing (SA-CH).
Our responsibilities
under
those provisions and standards are further describedother ethicalin accordancewith theserequirements.
in
We
the
believe“Auditor’sthat Responsibilities
the audit evidence
forwe
thehave
Auditobtainedof the Consolidated
is sufficient Financial
and appropriateStatements”
to provide
sectiona basisof ourfor
report.
our opinWe
provisions
Swisslaw, together
with therequirements
of
are
ion.
of theGroupin accordancewith the is
We independent
believe that theauditevidence
we have obtained
sufficientof
andappropriate
to provide
a basisfor our opinthe
ion.Swiss audit profession, as well as those of the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA
Code),
andMatters
we have fulfilled our other ethical responsibilities in accordance with these requirements.
Key Audit
Key Audit Matters
We
that theare
audit
evidence
wethat,have
is sufficientand appropriate
to provide
a basisinfor
opinKeybelieve
audit mattersthosematters
in obtained
our professional
judgment,
were of mostsignificanceourour
audit
of
ion.
the
statementsof thecurrent
period.
have determined
thatwere
thereofare
no keyaudit matters
com-ofKeyfinancial
audit matters
are thosemattersthat,in ourWe
professional
judgment,
most
significancein ourtoaudit
municatein ourreport. of the current period. We have determined that there are no key audit matters to comthe financial
statements
municate in our report.
Key Audit Matters
Other Information
Other Information
VALUATION
OF INVENTORIESThe Board of Directors is responsible for the other information. The other information comprises the information
includedintheDirectors
annualreport,but doesnotin
includethe
consolidated
statements,
the stand-alone
financialKeymatters
are thosemattersthat,
ourprofessional
judgment,
wereof most significancein ouraudit of
The audit
Boardofis responsible
for
the
other
information.
Thefinancial
otherinformation
comprises
theinformation
statementsof theCompany,
theandsections
marked
“audited”
in thewere
remuneration
andannualreportandtheconsolidated
financialstatements
thecurrent
period.
Thesematters
addressedinthecontextof ourincludedin theannualreport,buttables
doesofnotincludethe
consolidated
financialstatements,
thestand-alone
financialauditof the consolidated
financialstatements
as a whole,
and“audited”
in forming
our remuneration
opinion thereon,
we do
not proour auditor’s
thereon.
statements
ofreports
the Company,
the tables
and sections
markedin theandandannualreportandvide
a separate
opinionon these matters.
our auditor’sreports
thereon.
Our opinion on the financial statements does not cover the other information and we do not express any form ofassurance
thereon.
Our opinionconclusionon the financial
statements does not cover the other information and we do not express any form ofassurance conclusion thereon.
VALUATIONOFINVENTORIESIn connection with our audit of the financial statements, our responsibility is to read the other information and, in
doing
so, consider
whetherotherinformation
is materiallyinconsistentiswith
the financial
our inIn connection
with ouraudit theof thefinancialstatements,
our responsibility
to readthe otherstatements
informationorand,
Key
Audit Matter
responsemisstated.
knowledge
obtainedin the audit
or otherwise
appears
to Ourbe materiallydoing so, consider
whetherthe other
information
is materiallyinconsistent with the financial statements or our
knowledgein the audit
or amounted
otherwise appears
be materially
misstated.
Inventory
asobtained
at 31 December
2023
to CHF to We
mainly performed
the following audit procedures:If, basedon thewe haveperformed,
we conclude
264.2
million(31work
December2022:
CHF 316.2
million) that there is a material misstatement of this other information,
werequiredreportthat fact.
Wepositions.
have nothing
toWereportthisanregard.
If, based
onare
theonework
have
performed,
weconcludethat
is ainmaterial
misstatement of thethisprocess
other inforand
represents
of we
theto
most
material
asset- thereobtainedunderstanding
remation, weare required
to report thathave nothing tolated
reportregard. and valuation obsolete inValuation
allowance
for inventories
asfact.
at 31We
December
to inthethisidentification
2023 amounted to CHF -28.4 million (31 December
ventories. Based on this, we critically assessed
2022: CHF -33.8 million). Valuation of inventories iswhether transactions are completely and accurately
consequently of significance to an understanding of therecorded in the accounts.
financial statements.

FORBO ANNUAL REPORT 2023 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY 181

Board of Directors’ Responsibilities for the Financial Statements
The Board of Directors is responsible for the preparation of the financial statements 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 financial statements that are free from material misstatement, whether due to fraud or error.
In
preparing
the financial
statements, theof Directors
is responsible for assessing the Company’s ability to
Board
of Directors’
Responsibilities
forBoard
the Financial
Statements
continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern
basis of accounting
the Boardof preparation
Directors either
intends
to liquidate
the inCompanyor towithcease
The Board
Directors isunlessresponsible
for theof thefinancialstatements
accordancetheoperaprovitions,nolaw
realistic
alternative
but todo so.of incorporation, and for such internal control as the Board of Disions orof hasSwissand theCompany’s
articlesrectors determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibilities for the Audit of the Financial Statements
In preparing the financial statements, the Board of Directors is responsible for assessing the Company’s ability toOurobjectives
are toconcern,
obtain reasonable
about
whether
the tofinancialstatements
a wholeare freecontinue
as a goingdisclosing, assurance
as applicable,
matters
relatedgoing concern
andas
using
the going
confrommaterial
misstatement,
whetherdue tooffraud
or error,andto issuean auditor’sthat orincludesouroperaopincern basisof accounting
unlessthe Board
Directors
eitherintends
to liquidate
the reportCompany
to ceaseion.
Reasonableassurance
is a highbut
levelof assurance,
but is not a guarantee that an audit conducted in accordtions,or has no realistic
alternative
to do
so.
ance with Swiss law and SA-CH will always detect a material misstatement when it exists. Misstatements canarise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be
expected
influence the economic
decisionsofFinancial
users takenon the basis of these financial statements.
Auditor’s toResponsibilities
for the Auditof theStatementsAsof an audit
with Swisslaw and
SA-CH,
we exercise
professional
judgment
and maintainOurpartobjectives
are into accordance
obtain reasonableassurance
about
whetherthe financial
statements
as a whole
are freeprofessional
throughout
We or
also:
from materialskepticism
misstatement,
whetherthe
dueaudit.
to fraud
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 accord—
and assess
risks ofof thefinancial statements,
whetherdue to fraudcan
or eranceIdentify
with Swisslaw andthe
SA-CHwillmaterial
always misstatement
detect a material
misstatement
when it exists.
Misstatements
designperform
audit
procedures
responsive
to those risks,
andaggregate,
obtain audit
evidencethat is suffi-beariseror,fromfraudandor errorand areconsideredmaterial
if, individuallyor in thethey
could reasonably
cient andappropriate
to provide adecisions
basis forof
ourusers
opinion.
The
not ofdetectinga material
misstatement reexpected
to influence
the economic
taken
onriskthe ofbasis
these financial
statements.
sulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentionalomissions,misrepresentations,or law
the overrideof internal
control.
As partof anaudit in accordancewith Swiss
and SA-CH,
we exercise
professional judgment and maintainprofessional skepticism throughout the audit. We also:— 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 the— Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or erCompany’s internal control.
ror, design and perform audit procedures responsive to those risks, and obtain audit evidence that is suffi— cient
Evaluateappropriatenessofaaccounting
policies
usedreasonablenessof accounting
estimates
and theappropriate
to provide
basis for our
opinion.
Theandrisktheof notdetecting a material
misstatement
reand related
made.
sultingfrom disclosures
fraud is higher
than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
— Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,based onaudit evidence
obtained,
whethera material
uncertainty
existsrelatedto events
or conditions— Obtainan theunderstandingof internal
control
relevant
to the audit
in orderto design
audit
proceduresthat arethat may cast
doubt on but
the not
Company’s
ability toofcontinue
as aangoing
concern.
we conclude ofthataappropriate
insignificant
the circumstances,
for the purpose
expressing
opinionon theIfeffectivenessthematerial
uncertainty
Company’s
internal exists,
control.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— Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates
based on the audit evidence obtained up to the date of our auditor’s report. However, future events or condiand related disclosures made.
tions may cause the Company to cease to continue as a going concern.
— Conclude on the appropriateness of the Board of Directors’ use of the going concern basis of accounting and,We communicate
with theBoard ofDirectors
or its relevant
committee
regarding,amongtoothermatters,
thebased on the audit
evidenceobtained,
whethera material
uncertainty
exists related
eventsor conditions
plannedscope
andsignificant
timing of theaudit
significant audit
findings,
includingany significant
in thatinterthat may
cast
doubt
onand
the Company’s
ability
to continue
as a going
concern. Ifdeficiencies
we concludeanal control
that
we identify
duringmaterial
uncertainty
exists,weour
areaudit.
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
We alsoprovideBoard
of Directors
or itscommittee
with a statementthat we havecompliedrelbasedon thetheaudit
evidenceobtained
uprelevantto the dateof our auditor’sreport. However,
futureevents orwith
condievant
ethicalregardingtoindependence,
and ascommunicate
with them all relationships and other mattions
mayrequirements
cause the Company
cease to continue
a going concern.
ters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminatecommunicate
threats or safeguards
applied.
We
with the Boardof Directors or its relevant committee regarding, among other matters, theplanned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide the Board of Directors or its relevant committee with a statement that we have complied with relevant ethical requirements regarding independence, and communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.

182 FORBO ANNUAL REPORT 2023 – ANNUAL STATEMENTS FOR THE HOLDING COMPANY

Report of the statutory auditor

From the matters communicated with the Board of Directors or its relevant committee, we determine those mattersof mostsignificancewith
in theof oftheDirectors
financialorstatements
the currentwe
periodand arethose
therefore
Fromthatthewerematters
communicatedtheauditBoard
its relevantofcommittee,
determinematthedescribe inthesematters
in ourauditor’sreport, unlessor regulationprecludes
publicterskey
thataudit
werematters.
of most We
significancethe auditof thefinancialstatementsof thelaw
current
period andare therefore
disclosure
about
the matter
orand
when,
in extremely
determinethat a mattershould not
bethe
key audit
matters.
We describe
thesematters inrare
our circumstances,auditor’s report,weunlesslaw or regulationprecludes
publicReport
on
Other
Legal
Regulatory
Requirements
communicatedourmatterreportor
becausetheadverse consequencesof doing
so would reasonably
beshould
expected
disclosure aboutinthe
when, inextremelyrare circumstances,
we determinethat a matter
not tobeoutweigh
the public
interest
ofthe
such
communication.
communicatedin ourreportbecausedoing sowould
reasonably
besystem
expectedtoIn
accordance
with
Art.
728abenefits
para. 1 item
3adverseCO
andconsequences
PS-CH 890, weofconfirm
that
an internal
control
exists,outweighpublicinterestof such ofcommunication.
which
hasthebeen
designed
forbenefits
the preparation
the consolidated financial statements according to the instructions
ReportonofOther
Legal and Regulatory Requirementsofthe Board
Directors.

Report on Other Legal and Regulatory Requirements

In accordancewitharticle728a para. 1financial
item 3 CO
and PS-CH
890, we to
confirm
an internal control system exWe
recommendthat
the consolidated
statements
submitted
you bethat
approved.
ists,
which haswith
beendesigned
the1preparationof financial
statements
accordingthe instructionsof the exIn
accordance
article728a forpara.
item 3 CO and
PS-CH 890,
we confirm
that antointernal
control system
Boardof
Directors.
ists, which
has been designed for the preparation of financial statements according to the instructions of the
KPMGAGBoard of Directors.
We further confirm that the proposed appropriation of available earnings complies with Swiss law and the Company’s
articlesof incorporation.
We recommend
thatfinancialstatements
submitted
to youlaw
be andapproved.
We further
confirmthat the proposed
appropriation
ofthe
available
earnings
complieswith Swiss
the Company’s articles of incorporation. We recommend that the{{Signatureright}}
financial statements submitted to you be approved.
{{Signatureleft}}
KPMG AGKPMG AG
RegulaTobler
Licensed Audit Expert
Auditor in Charge

André Stampfli
Licensed Audit Expert{{Signatureleft}}{{Signatureright}}{{Signatureleft}}
Zurich,March 2024
Regula 4Tobler
Licensed
Audit Expert
Regula Tobler
Auditor in Audit
ChargeLicensedExpert{{Signatureright}}
André Stampfli
Licensed
Audit Expert
André Stampfli

Auditor in Charge

Licensed Audit Expert

Zurich, 4 March 2024
Zurich, 4 March 2024

KPMG AG, Badenerstrasse 172, CH-8036 Zurich© 2024 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.
KPMG AG, Badenerstrasse 172, CH-8036 Zurich
KPMG AG, Badenerstrasse 172, CH-8036 Zurich© 2024 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.
© 2024 KPMG AG, a Swiss corporation, is a subsidiary of KPMG Holding AG, which is a member of the KPMG global organization of independent member firms affiliatedwith KPMG International Limited, a private English company limited by guarantee. All rights reserved.

Publisher: Forbo Holding Ltd, Baar/Concept and design: Hotz Brand Consultants, Steinhausen/Linkgroup, Zurich/Photos: Luxwerk, Zurich/Forbo companies/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