The Group’s provisions mainly relate to dismantling costs, warranties and restructuring programmes.

Composition of provisions

(In € million)

 

Dismantling

 

Product warranty

 

Restructuring

 

Other

 

Total

Carrying amount as of 1 January 2018

 

7.6

 

7.2

 

24.7

 

3.3

 

42.8

Provisions made

 

3.7

 

5.7

 

7.2

 

1.4

 

18.0

Provisions used

 

(0.4)

 

(3.1)

 

(15.7)

 

(1.2)

 

(20.4)

Provisions reversed

 

(0.1)

 

(1.3)

 

(2.9)

 

(0.2)

 

(4.5)

Effect of movements in exchange rates

 

0.4

 

(0.1)

 

 

 

0.3

Carrying amount as of 31 December 2018

 

11.2

 

8.4

 

13.3

 

3.3

 

36.2

Current

 

 

8.4

 

10.7

 

1.0

 

20.1

Non-current

 

11.2

 

 

2.6

 

2.3

 

16.1

Carrying amount as of 31 December 2018

 

11.2

 

8.4

 

13.3

 

3.3

 

36.2

Carrying amount as of 1 January 2019

 

11.2

 

8.4

 

13.3

 

3.3

 

36.2

Provisions made

 

2.3

 

5.8

 

2.2

 

0.8

 

11.1

Provisions used

 

(0.2)

 

(4.9)

 

(10.6)

 

(0.3)

 

(16.0)

Provisions reversed

 

(1.8)

 

(1.8)

 

(0.4)

 

(0.5)

 

(4.5)

Effect of movements in exchange rates

 

0.7

 

0.1

 

 

 

0.8

Carrying amount as of 31 December 2019

 

12.2

 

7.6

 

4.5

 

3.3

 

27.6

Current

 

0.1

 

7.6

 

3.6

 

0.8

 

12.1

Non-current

 

12.1

 

 

0.9

 

2.5

 

15.5

Carrying amount as of 31 December 2019

 

12.2

 

7.6

 

4.5

 

3.3

 

27.6

Restructuring provision

The restructuring provision relates primarily to restructuring programmes focused on reducing costs, streamlining the organisation and adjusting headcount to be more closely aligned with the Group’s needs and changing market demands going forward.

Other provisions

Other provisions mainly relate to legal claims.

Accounting policy

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be reliably estimated and if it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are discounted if the time value of money is material. The unwinding of the discount is recognised as part of finance expenses. A provision is classified as current or non-current depending on whether the expected timing of the payment of the amounts provided for is more than 12 months after the reporting date.

A provision for dismantling is recognised when the Group has an obligation to pay for dismantling costs arising upon the return of a filling line. This obligation typically arises upon deployment of the filling line.

A provision for warranties is recognised for products under warranty as of the reporting date based upon known failures and defects as well as sales volumes and past experience of the level of problems reported and products returned.

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been publicly announced. The provision only includes direct costs that are necessarily entailed by the restructuring and not associated with ongoing activities. No provision is made for future operating costs.

A provision for onerous contracts is recognised when the expected benefits to be derived by an entity from a contract are lower than the unavoidable cost of meeting its obligations under the contract.

A provision for legal claims reflects management’s best estimate of the outcome based on the facts known as of the reporting date.