20. Movements in Provisions

Audited information

in CHF m

 

Environmental provisions

 

Personnel provisions

 

Restructuring provisions

 

Other provisions

 

Total provisions 2018

 

Total provisions 2017

As per 1 January

 

134

 

170

 

70

 

112

 

486

 

470

Additions

 

11

 

195

 

15

 

24

 

245

 

363

Effect of business combinations

 

 

 

 

 

 

1

Disposals

 

 

–2

 

 

 

–2

 

Amounts used

 

–13

 

–145

 

–42

 

–45

 

–245

 

–299

Unused amounts reversed

 

–13

 

–36

 

–3

 

–18

 

–70

 

–65

Changes due to the passage of time and changes in discount rates

 

3

 

 

 

 

3

 

5

Exchange rate differences

 

–8

 

–8

 

–1

 

–4

 

–21

 

11

At 31 December

 

114

 

174

 

39

 

69

 

396

 

486

 

 

 

 

 

 

 

 

 

 

 

 

 

Of which

 

 

 

 

 

 

 

 

 

 

 

 

– Current portion

 

34

 

150

 

34

 

53

 

271

 

320

– Non-current portion

 

80

 

24

 

5

 

16

 

125

 

166

Total provisions

 

114

 

174

 

39

 

69

 

396

 

486

 

 

 

 

 

 

 

 

 

 

 

 

 

Expected outflow of resources

 

 

 

 

 

 

 

 

 

 

 

 

Within 1 year

 

34

 

150

 

34

 

53

 

271

 

320

Between 1 and 3 years

 

26

 

15

 

4

 

8

 

53

 

74

Between 3 and 5 years

 

17

 

2

 

1

 

4

 

24

 

25

Over 5 years

 

37

 

7

 

 

4

 

48

 

67

Total provisions

 

114

 

174

 

39

 

69

 

396

 

486

Environmental provisions. Provisions for environmental liabilities are made when there is a legal or constructive obligation for the Group which will result in an outflow of economic resources. It is difficult to estimate the action required by Clariant in the future to correct the effects on the environment of prior disposal or release of chemical substances by Clariant or other parties and the associated costs, pursuant to environmental laws and regulations.

The material components of the environmental provisions consist of the costs to fully clean and refurbish contaminated sites and to treat and contain contamination at sites where the environmental exposure is less severe. The Group’s future remediation expenses are affected by a number of uncertainties which include, but are not limited to, the method and extent of remediation and the percentage of material attributable to Clariant at the remediation sites relative to that attributable to other parties.

The environmental provisions reported in the balance sheet concern a number of different obligations, mainly in Germany, Brazil, the United States, Switzerland and Italy.

Provisions are made for remedial work where there is an obligation to remedy environmental damage, as well as for containment work where required by environmental regulations. All provisions relate to environmental liabilities arising in connection with activities that occurred prior to the date when Clariant took control of the relevant site. At each balance sheet date, Clariant critically reviews all provisions and makes adjustments where required.

Personnel provisions. Personnel provisions include holiday entitlements, compensated absences such as sabbatical leave, jubilee, annual leave or other long-service benefits, profit sharing and bonuses. Such provisions are established in proportion to the services rendered by the employee concerned.

Restructuring provisions. Restructuring provisions are established where there is a legal or constructive obligation for the Group that will result in the outflow of economic resources. The term restructuring refers to the activities that have as a consquence staff redundancies and the shutdown of production lines or entire sites. When the Group has approved a formal plan and has either started to implement the plan or announced its main features to the public, a restructuring provision is created.

The restructuring provisions newly added in 2018 concern site closures and headcount reductions in various countries with the largest amounts incurred in the United States, Switzerland, France and Germany.

For further information regarding restructuring measures refer to .

Other provisions. Other provisions include provisions for obligations relating to tax (other than income tax) and legal cases and other items in various countries for which the amount can be reliably estimated.

All non-current provisions are discounted to reflect the time value of money where material. Discount rates reflect current market assessments of the time value of money and the risk specific to the provisions in the respective countries.

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