20 Provisions and contingent liabilities
20.1 Provisions
A provision is recognized when a legal or constructive obligation arising from past events exists, it is probable that a cash outflow will be required to settle the obligation, and a reliable estimate of the amount can be made.
Provisions are based on assumptions and estimates and are therefore subject to uncertainty. They are reassessed at each reporting date.
Non-current provisions are discounted at a risk-adjusted interest rate whenever the impact of discounting is material. The increase in the present value is recognized as financial expenses.
| In CHF million | Onerous customer contracts | Restructuring | Product liabilities and warranties | Others | Total | |||||
|---|---|---|---|---|---|---|---|---|---|---|
| January 1, 2025 | 84 | 54 | 277 | 104 | 519 | |||||
| Addition | 55 | 57 | 41 | 43 | 196 | |||||
| Unwinding of discount | – | – | 3 | 3 | 6 | |||||
| Usage | –61 | –73 | –37 | –30 | –201 | |||||
| Reversal | – | –1 | –2 | –3 | –6 | |||||
| Business combinations | – | – | 1 | – | 1 | |||||
| Exchange differences | –7 | –1 | –19 | –5 | –32 | |||||
| December 31, 2025 | 71 | 36 | 264 | 112 | 483 | |||||
| Current provisions | 55 | 30 | 111 | 48 | 244 | |||||
| Non-current provisions | 16 | 6 | 153 | 64 | 239 | |||||
| Total provisions | 71 | 36 | 264 | 112 | 483 |
Provisions for onerous contracts are recognized to cover expected losses arising from loss-making customer contracts. These provisions are measured based on pre-calculations and experience. Customer contracts are typically satisfied within 9 to 24 months. The provisions are used as the related contract work progresses.
Restructuring provisions are recognized and measured based on restructuring plans that have been announced. Restructuring provisions are used when the related costs are incurred.
Provisions for product liability relate to claims arising from product liability risks. The measurement of these provisions is based on actuarial valuations prepared by independent experts. These valuations consider all units under maintenance and include assumptions regarding the probability of future damages based on experience. Product liability provisions are used as related payments are made, which may occur over a period of up to ten years following the underlying event.
Warranty provisions cover the expected costs of work to be performed before the expiry of the warranty period. These provisions are measured based on experience.
Others comprise provisions for self-insurance and various other provisions. As of December 31, 2025, self-insurance provisions amount to CHF 24 million (previous year: CHF 29 million) and primarily cover employee-related risks that are not, or not sufficiently, covered by local or state insurance schemes in certain countries. The measurement of self-insurance provisions is based on actuarial valuations prepared by independent experts. The valuations include all employees active in the respective countries, and assumptions regarding the likelihood of future claims are based on experience. The provisions are used as the payments are made, which may occur over a period of up to ten years following the underlying event.
Other provisions amount to CHF 88 million in the reporting year (previous year: CHF 75 million) and relate to risks, such as litigation. These provisions are generally used within five years.
20.2 Contingent liabilities
Guarantees issued in favor of third parties are reported off-balance sheet as contingent liabilities and are recognized as a provision only when an outflow of resources is considered probable. As of December 31, 2025, guarantees amount to CHF 27 million (previous year: CHF 26 million).
Schindler is exposed to various legal risks, such as risks related to employment law, product liability, patent law, and competition law. Several Group companies are currently involved in legal proceedings, the outcomes of which cannot be reliably predicted. Decisions by courts or other authorities may therefore result in costs that are not, or only partially, covered by insurance. Such decisions could have a significant impact on the Group’s operations and future results.
The decision by the European Commission on February 21, 2007, regarding fines under competition law, as well as the decision by the Higher Regional Court in Vienna on December 14, 2007, to impose fines, resulted in civil damage claims against Group companies and other elevator companies being lodged with courts in Belgium, the Netherlands, and Austria. The total capital amount claimed jointly and severally from all the defendants involved in the proceedings – in which Group companies are involved as defendants –was EUR 27 million as of December 31, 2025. The Group companies in question consider the claims to be without merit.