Estimates with regard to the future and discretionary decisions are continuously assessed by the Group and are based on empirical values and assumptions that are deemed appropriate under the given circumstances.
The resulting accounting estimates will, by definition, seldom equal the respective actual results.
According to scientific findings, global climate change will affect the world economy in a variety of ways. Business models and competitive advantages can be permanently affected by climate change. Due to increasingly closely interlinked global supply and value chains, industry is particularly affected by potential risks and damage.
In order to take account of the resulting economic uncertainties and volatilities, NORMA Group conducts an analysis of potential opportunities and risks for its company structure and future sales markets and takes these considerations into account when preparing the Consolidated Financial Statements.
Risks and uncertainties arising from climate change could affect the following areas of the Consolidated Financial Statements in particular:
•Impairment of non-financial assets: The uncertainties related to climate change could result in changes in cash flow projections or the level of risk associated with achieving those cash flows.
•Useful lives of assets: Factors related to climate change factors could result in assets becoming physically unusable or commercially obsolete sooner than anticipated.
•Realization of deferred tax assets: The uncertainties related to climate change could lead to changes in projected future taxable profits.
With regard to the effects of the ongoing war in Ukraine, the conflict in the Middle East and other macroeconomic risks (for example from customs policy, interest rate policy, inflation and economic developments) on NORMA Group are complex and result mainly from the increase in energy and raw material prices as well as supply bottlenecks. The expansion of these conflicts would also increase the risk of a global economic downturn, which, in conjunction with continued inflation and rising interest rates, could lead to a significant decline in consumption.
The risks and uncertainties arising from the war in Ukraine and the other macroeconomic risks could have the following impacts:
•Volatility on the commodity markets
•Margin reductions to the extent that price increases cannot be passed on immediately to customers
•Changes in interest rates in various countries
•Growing volatility of foreign currency exchange rates
•Declining and volatile share prices
•Deteriorating creditworthiness, payment defaults or late payments
These factors can impact the fair value and carrying amount of assets and liabilities as well as cash flow forecasts, the measurement of pension provisions, the discount rate for goodwill impairment testing purposes and the recoverability of deferred tax assets.
Material accounting-related estimates
With the exception of the matters described below, no estimates and assumptions were identified that are associated with a significant risk and could lead to material adjustments to the carrying amounts within the next fiscal year.
Impairment of goodwill and intangible assets
The determination of the recoverable amount of cash-generating units (CGU) as part of the impairment test of goodwill and intangible assets with indefinite useful lives is based on assumptions regarding future cash flows, long-term growth rates and discount rates. Changes to these assumptions can lead to material adjustments to the carrying amounts.
Significant discretionary decisions
Income taxes
The Group has to pay income taxes in various tax jurisdictions. Significant discretionary decisions are required to determine the worldwide income tax liabilities. There are business transactions and calculations for which the final taxation cannot be conclusively determined. The Group measures the amount of provisions for expected tax audits on the basis of estimates as to whether and to what extent additional income taxes will be due. If the final taxation of these transactions differs from that initially assumed, this will have an impact on current and deferred taxes in the period in which the taxation is finally determined. As of December 31, 2025, income tax liabilities amounted to EUR 6,393 thousand(Dec 31, 2024: EUR 6,795 thousand) and deferred income tax liabilities amounted to EUR 38,483 thousand(Dec 31, 2024: EUR 36,999 thousand). Deferred tax assets are recognized if sufficient taxable income is available in the future. Among other things, the planned results from operating activities, the effects on earnings from the reversal of taxable temporary differences and possible tax strategies that NORMA Group would pursue are taken into account. NORMA Group assesses the recoverability of deferred tax assets at each reporting date on the basis of the taxable income generated in previous periods and the planned future taxable income. As future business developments are uncertain and partly beyond NORMA Group’s control, assumptions are required to estimate future taxable income and the timing of the realization of deferred tax assets. Estimates are adjusted in the period in which there is sufficient evidence for an adjustment.
Classification as discontinued operation
In fiscal year 2025, NORMA Group classified individual companies as discontinued operation within the meaning of IFRS 5. The assessment of whether the requirements for such a classification are met requires discretionary decisions.
Reverse factoring agreements – presentation of amounts in connection with the supply chain financing agreement in the Statement of Financial Position and Statement of Cash Flows
The Group participates in a supply chain financing (SCF) agreement under which suppliers can choose to receive earlier payment of their invoices from a bank by selling their receivables to the Group (factoring). In this agreement, the bank agrees to pay invoice amounts owed by the Group to participating suppliers and to receive compensation from the Group at a later date. The purpose of this agreement is to enable efficient payment processes and to allow willing suppliers to sell their receivables from the Group to a bank before the due date. The Group has not derecognized the original liabilities subject to this agreement, as neither a legal exemption was obtained nor was
the liability significantly changed by entering into the agreement. The amounts factored by the suppliers are reported under trade payables, as the nature and function of the financial liability correspond to the other trade payables. NOTE 21 (e) i. – TRADE AND OTHER PAYABLES
The cash flows to the bank from the reverse factoring programs for the settlement of the original trade accounts payable are presented under the cash flow from operating activities, as this corresponds to the economic substance of the transactions. NOTE 29 – NOTES TO THE CONSOLIDATED STATEMENT OF CASH FLOWS
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These contents are part of the Non-financial Group Report and were subject to a separate limited assurance examination.