23. Loans and borrowings
The Group’s loans and borrowings consist of senior unsecured Euro-denominated bonds, senior unsecured credit facilities, an unsecured US Dollar term loan and two unsecured Euro Schuldscheindarlehen (“SSD”, a private German debt placement). The senior unsecured credit facilities consist of a Euro-denominated term loan and two committed Euro revolving credit facilities. In addition, the Group has access to local credit facilities in various locations. Liabilities under lease contracts where the Group is the lessee are also included in loans and borrowings.
Composition of loans and borrowings
The table below shows the carrying amount of the Group’s loans and borrowings.
(In € million) |
|
As of |
|
As of |
|---|---|---|---|---|
Senior unsecured notes |
|
– |
|
549.5 |
Unsecured SSD |
|
– |
|
85.5 |
Local credit lines |
|
115.9 |
|
89.7 |
Lease liabilities |
|
46.5 |
|
52.0 |
Current loans and borrowings |
|
162.4 |
|
776.7 |
Senior unsecured bonds |
|
621.8 |
|
– |
Senior unsecured Euro term loan |
|
49.8 |
|
49.7 |
Unsecured US Dollar term loan |
|
229.6 |
|
259.5 |
Unsecured SSDs |
|
1,012.7 |
|
1,011.9 |
Unsecured committed revolving credit facilities |
|
140.0 |
|
100.0 |
Local credit lines |
|
12.8 |
|
3.5 |
Lease liabilities |
|
263.6 |
|
269.8 |
Non-current loans and borrowings |
|
2,330.3 |
|
1,694.4 |
Total loans and borrowings |
|
2,492.7 |
|
2,471.1 |
Overview of recent financing transactions
On March 19, 2025, the Group issued €625 million of senior unsecured bonds at a fixed interest of 3.75%. The bonds are listed on SIX Swiss Exchange and mature in March 2030.
Proceeds from the issue of bonds, together with draw-downs of the Group’s revolving credit facilities, were used to repay €550 million of senior unsecured notes and two tranches of a total of €85.5 million unsecured SSD that were due in June 2025. The €550 million unsecured bridge loan facility agreement that the Group signed in 2024 has been cancelled due to the timely issue of the bonds.
On April 28, 2025, SIG extended the maturity date for €490 million of its €500 million committed Euro revolving credit facilities by one year from 2029 to 2030.
On May 8, 2024, the Group issued six tranches of a total of €450 million unsecured SSD with maturities of four, five and seven years at both fixed and variable interest rates. The two largest tranches are due in 2028 and 2029.
On June 28, 2024, the Group accessed new senior unsecured credit facilities consisting of a five-year €50 million term loan and two committed Euro revolving credit facilities in the total amount of €500 million. The interest rates are variable.
The proceeds from the SSD and the new term loan, together with available cash, were used on June 28, 2024 to prepay, without premium or penalty, the Group’s €550 million term loan from 2020 that was due in June 2025. In connection with this, the related €300 million committed multi-currency revolving credit facility was terminated.
On September 18, 2024, the Group repaid the €100.0 million draw-down of an unsecured credit facility, using available cash.
Additional loans and borrowings details
The table below provides an overview of the main terms of the Group’s long-term financing (excluding lease liabilities) as of December 31, 2025. Additional details about some of these loans and borrowings and more short-term financing solutions are provided below the table.
|
|
Principal amount |
|
Maturity date |
|
Interest rate |
|---|---|---|---|---|---|---|
US Dollar term loan |
|
$270 million |
|
July 2027 |
|
Variable |
Euro term loan |
|
€50 million |
|
June 2029 |
|
Variable |
Euro revolving credit facilities |
|
€10 million |
|
June 2029 |
|
Variable |
|
€490 million |
|
June 2030 |
|
Variable |
|
SSD tranches (two, from 2022) |
|
€481 million |
|
June 2027–June 2029 |
|
Variable |
SSD tranches (two, from 2022) |
|
€83.5 million |
|
June 2027–June 2029 |
|
Fixed 3.18%–3.66% |
SSD tranches (two, from 2024) |
|
€38 million |
|
May 2028–May 2029 |
|
Fixed 4.24%–4.31% |
SSD tranches (four, from 2024) |
|
€412 million |
|
May 2028–May 2031 |
|
Variable |
Bonds |
|
€625 million |
|
March 2030 |
|
Fixed 3.75% |
SIG issued a number of tranches of Schuldscheindarlehen (“SSD”, a private German debt placement) in 2022 and 2024. The largest SSD tranche of €423.5 million from the 2022 issue is due in June 2027. Of the SSDs issued in May 2024, €282.0 million is due in May 2029. Two tranches from the 2022 issue of SSDs were repaid in June 2025 (see above).
The total amount available under the revolving credit facilities was €359.5 million as of December 31, 2025 (€398.4 million as of December 31, 2024) due to €0.5 million in letters of credits that were outstanding under an ancillary facility (€1.6 million as of December 31, 2024) and draw-downs of €140.0 million to cover cash requirements in the current year (€100.0 million as of December 31, 2024). The draw-downs are expected to be repaid within one year (see also note 26).
The Group also has access to local credit facilities in various locations. As of December 31, 2025, €128.7 million of unsecured unguaranteed local credit lines had mainly been used to cover local working capital needs (€93.2 million as of December 31, 2024).
The margins on the Group’s variable interest rate loans are generally subject to adjustments based on the Group’s net leverage (as defined in the respective credit agreements) and, in one case, also subject to adjustments based on the achievement of certain annual sustainability-linked targets (with reference to the Group’s EcoVadis score). Interest is generally paid on a semi-annual basis.
See section “Interest rate risk” in note 26 for information on derivative contracts entered into by the Group to hedge the cash flow exposure arising on some of the debt at variable interest rates.
The obligations under the bonds, the senior unsecured credit facilities, the US Dollar term loan and the two SSDs are guaranteed by the Company on a stand-alone basis.
Net debt and net leverage
As part of monitoring the Group’s financial position, the Board of Directors evaluates the Group’s net debt and development of its net leverage ratio. Net leverage is defined by the Group as net debt divided by adjusted EBITDA. Net debt comprises the Group’s current and non-current loans and borrowings (including lease liabilities, and with notes and credit facilities at principal amounts) less cash and cash equivalents (including any restricted cash). See note 9 for the definition of adjusted EBITDA.
The table below presents the components of net debt and the net leverage ratio.
(In € million) |
|
As of |
|
As of |
|---|---|---|---|---|
Gross debt |
|
2,498.1 |
|
2,474.9 |
Cash and cash equivalents |
|
(354.3) |
|
(303.4) |
Net debt |
|
2,143.8 |
|
2,171.5 |
Net leverage ratio |
|
3.0x |
|
2.6x |
The net debt as of December 31, 2025 broadly remained at the same level as of December 31, 2024. The adjusted EBITDA performance negatively impacted the net leverage ratio.
Under the credit agreements for the Group’s senior unsecured credit facilities and the US Dollar term loan, the Group is required not to exceed a net leverage ratio of 4.0x (defined as net debt divided by adjusted EBITDA, excluding asset impairments). If the Group were not to comply with these covenants, the borrowings would become repayable on demand.
The Group was in compliance with all covenants and there were no events of default as of December 31, 2025 and December 31, 2024. The net leverage ratio as of December 31, 2025 was 2.8x as per the definition under the credit agreements (3.0x as per the Group’s definition).
The above borrowings are classified as non-current liabilities. The Group expects to comply with the covenants for at least 12 months after the reporting date. The covenants are tested on an annual and semi-annual basis.
Lease liabilities
A maturity analysis of the Group’s lease liabilities (relating mainly to office buildings, production-related buildings and equipment, warehouses and cars) is provided below.
|
|
Carrying amount of lease liabilities |
|
Interest payments |
|
Contractual undiscounted cash flows |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
(In € million) |
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|
2025 |
|
2024 |
Less than 1 year |
|
46.5 |
|
52.0 |
|
20.8 |
|
21.2 |
|
67.3 |
|
73.2 |
Between 1 and 5 years |
|
108.4 |
|
118.4 |
|
64.2 |
|
69.7 |
|
172.6 |
|
188.1 |
More than 5 years |
|
155.2 |
|
151.4 |
|
105.6 |
|
146.0 |
|
260.8 |
|
297.4 |
|
|
310.1 |
|
321.8 |
|
190.6 |
|
236.9 |
|
500.7 |
|
558.7 |
Note 13 includes information about lease contracts to which the Group has committed but where the lease has not yet commenced.
Changes in liabilities arising from financing activities
The following two tables present changes in liabilities arising from financing activities.
|
|
Jan. 1, 2025 |
|
Cash flows from/(used in): |
|
Non-cash movements |
|
Effect of movements in exchange rates |
|
Dec. 31, 2025 |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(In € million) |
|
|
Financing activities |
|
Operating activities |
|
|
|
||||||||
Principal amount1 |
|
2,153.1 |
|
78.1 |
|
– |
|
– |
|
(43.2) |
|
2,188.0 |
||||
Transaction costs |
|
(3.8) |
|
– |
|
(3.8) |
|
2.2 |
|
– |
|
(5.4) |
||||
Loans and borrowings, excl. lease liabilities |
|
2,149.3 |
|
78.1 |
|
(3.8) |
|
2.2 |
|
(43.2) |
|
2,182.6 |
||||
Lease liabilities |
|
321.8 |
|
(55.2) |
|
– |
|
61.6 |
|
(18.1) |
|
310.1 |
||||
Total loans and borrowings |
|
2,471.1 |
|
22.9 |
|
(3.8) |
|
63.8 |
|
(61.3) |
|
2,492.7 |
||||
Capitalized cost for revolving credit facility |
|
(2.5) |
|
(0.4) |
|
– |
|
1.5 |
|
– |
|
(1.4) |
||||
Interest: Accrued/(paid) |
|
8.0 |
|
– |
|
(107.8) |
|
125.4 |
|
(0.2) |
|
25.4 |
||||
|
|
2,476.6 |
|
22.5 |
|
(111.6) |
|
190.7 |
|
(61.5) |
|
2,516.7 |
||||
Derivative (assets)/liabilities from financing activities |
|
(3.3) |
|
– |
|
– |
|
2.4 |
|
0.3 |
|
(0.6) |
||||
Total (assets)/liabilities from financing activities and |
|
2,473.3 |
|
22.5 |
|
(111.6) |
|
193.1 |
|
(61.2) |
|
2,516.1 |
||||
|
||||||||||||||||
|
|
Jan. 1, 2024 |
|
Cash flows from/(used in): |
|
Net effect of early repayment of loans |
|
Non-cash movements |
|
Effect of movements in exchange rates |
|
Dec. 31, 2024 |
||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
(In € million) |
|
|
Financing activities |
|
Operating activities |
|
|
|
|
|||||||||
Principal amount1 |
|
2,206.4 |
|
(73.5) |
|
– |
|
– |
|
– |
|
20.2 |
|
2,153.1 |
||||
Transaction costs |
|
(5.2) |
|
– |
|
(1.8) |
|
0.9 |
|
2.4 |
|
(0.1) |
|
(3.8) |
||||
Original issue discount |
|
(0.5) |
|
– |
|
– |
|
0.3 |
|
0.2 |
|
– |
|
– |
||||
Loans and borrowings, excl. lease liabilities |
|
2,200.7 |
|
(73.5) |
|
(1.8) |
|
1.2 |
|
2.6 |
|
20.1 |
|
2,149.3 |
||||
Lease liabilities |
|
251.1 |
|
(51.7) |
|
– |
|
– |
|
122.8 |
|
(0.4) |
|
321.8 |
||||
Total loans and borrowings |
|
2,451.8 |
|
(125.2) |
|
(1.8) |
|
1.2 |
|
125.4 |
|
19.7 |
|
2,471.1 |
||||
Capitalized cost for revolving credit facility |
|
(0.5) |
|
(2.6) |
|
– |
|
0.4 |
|
0.2 |
|
– |
|
(2.5) |
||||
Interest: Accrued/(paid) |
|
8.2 |
|
– |
|
(135.1) |
|
– |
|
134.7 |
|
0.2 |
|
8.0 |
||||
|
|
2,459.5 |
|
(127.8) |
|
(136.9) |
|
1.6 |
|
260.3 |
|
19.9 |
|
2,476.6 |
||||
Derivative (assets)/liabilities from financing activities |
|
(6.6) |
|
– |
|
– |
|
– |
|
3.6 |
|
(0.3) |
|
(3.3) |
||||
Total (assets)/liabilities from financing activities and |
|
2,452.9 |
|
(127.8) |
|
(136.9) |
|
1.6 |
|
263.9 |
|
19.6 |
|
2,473.3 |
||||
|
||||||||||||||||||
Accounting policy
Loans and borrowings (excluding lease liabilities) are initially recognized at fair value less any directly attributable transaction costs. Subsequent to initial recognition, these liabilities are measured at amortized cost using the effective interest method. Loans and other borrowings are classified as current or non-current liabilities depending on whether the Group has a right to defer settlement at the reporting date for at least twelve months after the reporting period. The right to defer must also have substance. The classification of liabilities as current or non-current is not impacted by the Group’s intentions or expectations about whether it will exercise a right to defer settlement or will choose to settle early.
The accounting for a change to the cash flows of a financial liability measured at amortized cost (such as the Group’s notes, SSDs and term loans) depends on the nature of the change. If a floating-rate debt instrument is modified to change its interest rate, the modification is regarded as a repricing to the new market interest rate, which is accounted for prospectively by adjusting the effective interest over the remaining life of the debt instrument. A floating-rate instrument is one whose original contractual terms contain a provision such that the cash flows will (or might) be reset to reflect movements in market interest rates. If a change in cash flows arises due to renegotiation or other modifications (including modifications that do not reflect movements in market interest rates), and the renegotiation or modification does not result in the derecognition of the financial liability, the gross carrying amount is recalculated and any gain or loss recognized in profit or loss as part of the net finance expense. If a renegotiation or modification represents a settlement of the original debt, it is accounted for as being extinguished.
A financial liability (or a part of it) is derecognized when it is extinguished, i.e. when the contractual obligations are discharged, cancelled, expired or replaced by a new liability with substantially modified terms. The difference between the carrying amount of the financial liability (or part of a financial liability) extinguished and the consideration paid is recognized in profit or loss as part of the net finance expense. Any costs or fees incurred are recognized as part of the gain or loss on extinguishment.
Lease liabilities
The Group’s lease liabilities are initially measured at the present value of the lease payments outstanding as of the lease commencement date, discounted at the interest rate implicit in the lease or, if that rate cannot be determined (which is normally the case), at the incremental borrowing rate. Lease payments included in the measurement of the lease liabilities include fixed lease payments and variable lease payments that depend on an index. Other variable lease payments are recognized in profit or loss. The Group does not separate non-lease components from lease components in its lease contracts. Extension, termination and purchase options that, at the lease commencement date, are reasonably certain to be exercised are considered when assessing the lease term and/or measuring the lease liability.
Subsequent to initial recognition, the lease liabilities are measured by increasing the carrying amount to reflect interest on the lease liability (applying the effective interest method); reducing the carrying amount to reflect lease payments made; and remeasuring the carrying amount to reflect any contract modifications or reassessments relating to, for example, changed future lease payments linked to changes in an index and changes in the assessment of whether an extension, termination or purchase option will be exercised. When a lease liability is remeasured, the corresponding adjustment is generally made to the carrying amount of the related right-of-use asset (see note 13).