(19) Intangible assets
Intangible assets include industrial property rights, licenses and similar rights, goodwill, internally generated and developed assets, and advance payments on intangible assets. The net carrying amounts decreased from € 53.0 million in the previous year to € 51.1 million as at December 31, 2025.
No impairment losses were recognized in the reporting year (previous year: € 0.1 million). As of the reporting date, there were restricted rights of disposal on intangible assets amounting to € 1.1 million (previous year: € 0.6 million). There were no commitments to invest in intangible assets attributable to investments that have already been contractually agreed upon but not yet completed (previous year: € 0.2 million).
Exploration and production activities are carried out in one subsidiary. The net carrying amount of this item included in intangible assets amounted to € 0.1 million as at the reporting date (previous year: € 0.1 million). There were no exploration activities in the year under review. This activity is not material for the PCC Group and is therefore not presented separately in the reconciliation statement.
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Goodwill
Any excess of cost of acquisition over net assets acquired during the initial consolidation of subsidiaries is recognized as goodwill in the consolidated balance sheet. This goodwill is not subject to amortization but is tested for impairment at least once a year in accordance with IFRS 3.
The presentation shows all goodwill existing in the Group as at December 31, 2025. This also includes the goodwill of the US company PCC Chemax, Inc., Piedmont (South Carolina), which was transferred from the separate financial statements. As in the previous year, there were neither additions nor impairments in the year under review. The change in the goodwill of PCC Chemax, Inc. results from a currency translation effect, as the goodwill is carried in the currency of the cash-generating unit of the company, i.e. US dollars. Annual impairment testing was carried out in the fourth quarter of the fiscal year, using the management approved forecasts for the following three years. These forecasts were extrapolated for an additional two years using standardized growth assumptions, resulting in the terminal value being derived from year five.
The recoverable amount was determined on the basis of value-in-use. As in the previous year, the growth rate assumed was 1.0 %. The budget assumptions derive from empirical values and estimates of the various business managements, taking into account centrally defined global positions such as exchange rates, estimates of economic development, market growth or commodity prices, for which purpose external sources were also consulted. The local tax rates assumed were 19.0 % for the Polish cash-generating units and 23.6 % for the US cash-generating unit. The tax rates were unchanged from the previous year. As in the previous year, the cost of capital was calculated on a region-specific basis. This was 9.11 % for Poland (previous year: 9.19 %) and 8.41 % for the USA (previous year: 8.34 %). Even taking into account a change in the weighted average cost of capital (WACC) of 10 %, there would be no write-down requirement.
The recoverable amount was determined on the basis of value-in-use. As in the previous year, the growth rate assumed was 1.0 %. The budget assumptions derive from empirical values and estimates of the various business managements, taking into account centrally defined global positions such as exchange rates, estimates of economic development, market growth or commodity prices, for which purpose external sources were also consulted. The local tax rates assumed were 19.0 % for the Polish cash-generating units and 23.6 % for the US cash-generating unit. The tax rates were unchanged from the previous year. As in the previous year, the cost of capital was calculated on a region-specific basis. This was 9.11 % for Poland (previous year: 9.19 %) and 8.41 % for the USA (previous year: 8.34 %). Even taking into account a change in the weighted average cost of capital (WACC) of 10 %, there would be no write-down requirement.
(20) Property, plant and equipment
The net carrying amount of property, plant and equipment decreased from € 1,044.6 million in the previous year to € 976.1 million as of December 31, 2025. This is primarily attributable to impairment charges related to the silicon metal plant in Iceland. Additions to property, plant and equipment amounted to € 140.4 million in fiscal 2025 (previous year: € 101.5 million). The investments were primarily distributed across the Trading & Services, Chlorine & Derivatives, and Logistics segments, as well as project developments in the Holding & Projects segment. Further replacement investments were also implemented. Additions to depreciation on property, plant and equipment amounted to € 62.9 million in the past fiscal year (previous year: € 64.3 million). Impairments of property, plant and equipment amounted to € 116.2 million (previous year: € 2.1 million) and primarily relate to the aforementioned silicon metal plant in the Silicon & Derivatives segment, the closure of the monochlorobenzene plant in the Chlorine & Derivatives segment and the shutdown of minor facilities in the Polyols & Derivatives segment. Reversals of impairment losses were not material in either the reporting year or the previous year.
As of the 2025 reporting date, there were restrictions on the right to dispose of certain items of property, plant and equipment amounting to € 524.2 million (previous year: € 545.4 million). In addition, these assets serve as collateral for liabilities. As of December 31, 2025, there were total capital commitments of € 25.0 million (previous year: € 55.2 million), attributable to investments that had already been contractually agreed upon but not yet completed. Furthermore, € 0.5 million (previous year: € 0.3 million) in insurance indemnities was received during the reporting year, attributable to property, plant and equipment.
(21) Right-of-use assets
Within the PCC Group, leases exist particularly in the areas of developed and undeveloped land, buildings, plant and machinery, factory and office equipment, and vehicle fleets. Extension and termination options are agreed in some cases to ensure flexibility. When determining the term of the lease, all circumstances and facts are considered which, based on the current state of knowledge, have an influence on the exercise of a renewal or extension option or the non-exercise of a termination option. In determining lease liabilities and corresponding right-of-use assets, all sufficiently assured cash outflows are taken into account. The net carrying amounts of the right-of-use assets, totaling € 94.0 million (previous year: € 89.1 million), are broken down by type of underlying asset as of the reporting date as follows:
The underlying contractual terms for leases on land and buildings range from one to 27 years. Plant and machinery are leased for between one and five years, and other facilities, factory and office equipment, including our vehicle fleet, for between one and six years. Classified by underlying asset type, the depreciation expenses totaling € 18.3 million (previous year: € 17.1 million) on right-of-use assets in fiscal 2025 break down as follows:
(22) Non-current financial assets
Non-current financial assets include shares in affiliated companies that are not consolidated for reasons of materiality, investments in other entities, and securities held as financial assets. Also reported under this item are positive fair values of derivative financial instruments. As of the reporting date, non-current financial assets totaled € 12.6 million (previous year: also € 12.6 million) and consisted primarily of € 8.8 million (previous year: € 8.5 million) in investments in non-consolidated affiliated companies and € 3.7 million (previous year: € 4.1 million) attributable to positive fair values of derivative financial instruments.
(23) Other non-current financial assets
Other non-current financial assets include loans to affiliated companies that are not consolidated for materiality reasons, loans to joint ventures, and other loans. As of the reporting date, other non-current financial assets totaled € 14.7 million (previous year: € 15.3 million). This figure includes, in particular, loans to the joint venture OOO DME Aerosol in the amount of € 11.4 million (previous year: € 12.5 million).
(24) Inventories
Inventories decreased from € 121.8 million in the prior year to € 100.3 million as of December 31, 2025. The drop is primarily due to the provisional shutdown of silicon metal production in Iceland and the resulting reduction in inventory levels. In the reporting year, write-ups of previously impaired inventories totaling € 0.1 million were recorded due to improved marketability (previous year: € 0.9 million). Impairment losses amounted to € 1.5 million (previous year: € 1.2 million). In fiscal 2025, inventories totaling € 567.7 million (previous year: € 554.2 million) were expensed in the statement of income.
(25) Trade accounts receivable
As of the reporting date, all trade accounts receivable had a remaining term of up to one year. They were unchanged from the previous year and amounted to € 105.3 million. As in the previous year, the expected future losses calculated using the impairment model remained at a low level. Provisions for losses already incurred increased to € 2.6 million (previous year € 2.1 million).
In total, valuation allowances on trade accounts receivable amounting to € 2.7 million were recognized in both the reporting year and the previous year.
The maturity structure of all non-impaired trade accounts receivable is shown in the adjacent table. As of December 31, 2025, approximately 90.7 % of the Group’s receivables are neither impaired nor past due (previous year: 87.5 %). Also shown are the default risks and the level of expected credit losses (ECL) over the remaining term to maturity for each age group.
Individual companies within the PCC Group use factoring as a means of financing receivables. The volume of all receivables sold as of the reporting date amounted to € 19.8 million (previous year: € 48.7 million).
(26) Other receivables and other assets
As was the case in the previous year, accounts receivable from affiliated companies as of December 31, 2025 all had a remaining term of up to one year in their full amount. They comprise accounts receivable from non-consolidated affiliated companies. Further information is also provided in the section on related parties, see Note (39). These are largely loan receivables from project companies. As of December 31, 2025, there were no impairment losses on receivables from affiliated companies (previous year: € 6.5 million).
(27) Equity
The subscribed capital of PCC SE is unchanged from the previous year, amounts to € 5.0 million and is fully paid up. It is divided into 5,000,000 no-par-value bearer shares with a notional value of € 1 per share. Changes in Group equity are presented in the consolidated statement of changes in equity as part of these consolidated financial statements. The composition of retained earnings (revenue reserves) and other reserves as at December 31, 2025 is shown in the adjacent table.
Revenue reserves and other reserves comprise unappropriated earnings achieved in the reporting period by the subsidiaries included in the consolidated financial statements. The Group’s share of the previous year’s net result of € – 23.3 million is reported as a loss carried forward to revenue reserves. In fiscal 2025, a distribution of € 1.65 million (previous year: € 5.5 million) was made to the shareholder of PCC SE from the retained earnings of PCC SE. This corresponds to a dividend per share of € 0.33 (previous year: € 1.10). Currency translation differences are reported in other equity items. In the past fiscal year, these reduced Group equity by € 9.8 million to a total of € – 14.4 million (previous year: € – 5.0 million). The development of gains and losses recognized directly in equity is shown in the adjacent table.
(28) Minority interests
German and international minority shareholders hold non-controlling interests in various entities of the PCC Group. PCC consistently applies the additive method when initially consolidating the equity of companies with non-controlling interests, as well as in subsequent capital transactions. Indirect interests of minority shareholders in the net assets of the consolidated company are not taken into account. For the allocation of earnings, the multiplicative method is applied to both direct and indirect interests of non-controlling interests.
The share of non-controlling interests reported in consolidated equity as of December 31, 2025 amounted to € – 8.1 million, which is € 66.6 million lower than as of the same date in the previous year. Subsidiaries featuring significant non-controlling interests operate in various segments of the PCC Group. Information on the company name, registered office, and equity interests for subsidiaries featuring significant non-controlling interests is provided in the schedule of shareholdings pursuant to Section 313 (2) HGB (German Commercial Code) in Note (44). There are no material restrictions on parent company control beyond the usual provisions of corporate law and contractual arrangements.
The share of non-controlling interests reported in consolidated equity as of December 31, 2025 amounted to € – 8.1 million, which is € 66.6 million lower than as of the same date in the previous year. Subsidiaries featuring significant non-controlling interests operate in various segments of the PCC Group. Information on the company name, registered office, and equity interests for subsidiaries featuring significant non-controlling interests is provided in the schedule of shareholdings pursuant to Section 313 (2) HGB (German Commercial Code) in Note (44). There are no material restrictions on parent company control beyond the usual provisions of corporate law and contractual arrangements.
(29) Hybrid capital
Hybrid capital relates to a hybrid financing instrument with a volume of € 78.7 million. In accordance with IAS 32, the hybrid capital is classified as equity. There is neither a contractual obligation to repay the principal nor to pay interest. Instead, the repayment is subject to conditions that depend on the decision of the management of the company to make distributions to its shareholders. As soon as resolutions are passed on such distributions, the hybrid capital will also be serviced on a pro rata basis.
(30) Provisions for pensions and similar obligations
Most of the employees of the Polish subsidiaries of the PCC Group are granted non-recurring benefits under statutory pension plans in addition to their statutory retirement pensions. These defined benefit plans are, as a rule, based on length of service and salary. Benefits under defined benefit plans are generally granted upon reaching retirement age or upon disability or death.
Defined contribution plans exist mainly in the form of statutory pension schemes in Germany and at the international subsidiaries. For employees of the German subsidiaries and the holding company, there may also be individual contributions to other defined contribution plans in addition to the statutory pension plan. Typical risk factors for defined benefit plans are longevity, nominal interest rate changes, and inflation and salary increases. The present value of the defined benefit obligation under a pension plan is determined based on the best estimate of the probability of death of the employees participating in the plan, both during the employment relationship and after its termination. An increase in the life expectancy of the beneficiary employees or a decrease in the bond interest rate leads in each case to an increase in the plan liability. Furthermore, the present value of the defined benefit obligation under a pension plan is determined on the basis of the future salaries of the beneficiary employees. Salary increases of the beneficiary employees lead to an increase in the plan liability.
The defined-benefit pension commitments are internally funded.
Provisions for pensions and similar obligations amounted to € 1.3 million, with the figure virtually unchanged from the previous year. Of this amount, € 1.2 million consists of non-current provisions with a term of more than one year.
Provisions for pensions and similar obligations amounted to € 1.3 million, with the figure virtually unchanged from the previous year. Of this amount, € 1.2 million consists of non-current provisions with a term of more than one year.
In total, defined benefit pension plans are provided for 2,886 employees of the PCC Group companies (previous year: 2,943), of whom 74.3 % are male and 25.7 % are female. The average age as of the reporting date was 43.4 years (previous year: 43.3 years). A uniform discount rate of 4.35 % (previous year: 3.45 %) was applied to
determine pension obligations. Salary growth was assumed to be 3.8 % (previous year: 4.2 %). The 2024 Polish mortality table from the Central Statistical Office, which serves as the basis for the calculation, assumes a life expectancy of 78.6 years (previous year: 78.3 years). An adjustment of the key actuarial parameters would have the following effects on the amount of pension obligations:
determine pension obligations. Salary growth was assumed to be 3.8 % (previous year: 4.2 %). The 2024 Polish mortality table from the Central Statistical Office, which serves as the basis for the calculation, assumes a life expectancy of 78.6 years (previous year: 78.3 years). An adjustment of the key actuarial parameters would have the following effects on the amount of pension obligations:
The sensitivity analysis presented above is unlikely to be representative of the actual change in the defined benefit obligation, as it is considered improbable that deviations from the assumptions made would occur in isolation from one another.
The pension obligations have the following profile of remaining maturities:
The cash outflows for pension obligations break down as follows:
Expenses for the 2025 fiscal year include € 11.4 million in employer contributions to the statutory pension insurance scheme (previous year: € 10.5 million). In addition to contributions to the statutory pension scheme, expenses for defined-contribution pension plans are included in the current period’s results in the amount of € 1.4 million (previous year: € 1.9 million).
(31) Other provisions
Other provisions decreased from € 42.8 million in the prior year to € 38.2 million as of December 31, 2025. The decline is primarily attributable to a € 5.6 million reduction in provisions for the purchase of CO2 allowances. The € 3.1 million reduction in personnel provisions also contributed to the decrease. These provisions are primarily established for bonus and vacation entitlements.
Provisions for energy efficiency certificates arise from the requirements of the Polish energy mix system. Any shortfall in the supply of energy from renewable sources to the production process must be offset either by purchasing so-called green certificates or through compensation payments.
The table provided shows the development of other provisions in fiscal 2025. Other changes mainly relate to foreign exchange rate effects.
(32) Financial liabilities
The financial liabilities of the PCC Group are essentially composed of non-current and current liabilities arising from bonds, amounts owed to banks, lease liabilities and amounts owed to affiliated companies.
Financial liabilities increased from € 958.2 million in the prior year to € 1,035.2 million as of December 31, 2025. The largest absolute increase, namely € 52.7 million to € 415.4 million, was recorded in liabilities to banks. Liabilities from bonds also increased significantly by € 21.5 million to € 542.3 million. Liabilities from leases rose by € 2.3 million to € 76.9 million.
Liabilities to banks bear interest at rates ranging from 0.4 % p.a. to 12.5 % p.a. Unutilized, firmly committed credit lines within the PCC Group amounted to € 156.4 million as of the reporting date (previous year: € 144.9 million). As of the reporting date, the financial liabilities within the PCC Group had the maturity profile shown in the table.
The relevant factors when presenting the maturities of contractual cash flows from financial liabilities are interest payments and redemption of principal, plus other payments in respect of derivative financial instruments. The adjacent table shows non-discounted future cash flows. Derivatives are included on the basis of their net cash flows where they have negative fair values and thus represent liabilities. Derivatives with positive fair values are assets and are therefore not considered. Trade accounts payable are essentially non-interest-bearing and due within one year. The carrying amount of trade accounts payable therefore corresponds to the total of the future cash flows.
The liabilities to banks reported under financial liabilities and those from leases were extensively secured in 2025 by land charges or similar liens, by the assignment of claims, the assignment of property, plant and equipment as chattel mortgages or by other collateral assignments. In total, the collateral granted as of December 31, 2025 amounted to € 482.2 million (previous year: € 438.9 million).
Liabilities from bonds result from issuances by PCC SE and the foreign subsidiaries PCC Rokita SA and PCC Exol SA. Bonds of the PCC Group are issued in euros and Polish złoty. The public bonds denominated in euros (EUR) carry fixed coupons ranging from 4.0 % to 6.0 % p.a. The bonds issued in złoty (PLN) have either fixed coupons ranging from 5.0 % to 5.5 % p.a. or a variable interest rate. The bonds issued in złoty, with a total volume of PLN 102.0 million (previous year: PLN 197.0 million), had a value equivalent to € 23.5 million as of the reporting date (previous year: € 45.2 million).
(33) Other liabilities
Other liabilities declined from € 127.6 million in the prior year to € 126.6 million as of December 31, 2025. As in the prior year, the largest single item within other liabilities is deferred income totaling € 77.9 million (previous year: € 75.8 million). This relates primarily to subsidies and grants for investment projects. Reversals of deferred income from subsidies totaling € 4.8 million are included in the result for fiscal 2025 (previous year: € 5.0 million). Liabilities from investments increased from € 12.2 million in the prior year to € 13.5 million as of the reporting date. These are liabilities arising from goods or services provided by third parties that resulted from investment projects as of the reporting date.
(34) Deferred taxes
Deferred taxes are recognized for temporary differences between the carrying amounts of assets, liabilities and accruals in the balance sheet, and their tax bases. As in the prior year, a uniform tax rate of 30 % was applied to domestic German companies. For foreign companies, the respective national tax rates were applied. In Iceland, the tax rate decreased to 20.0 % in the reporting year (previous year: 21.0 %). All other tax rates remained constant year on year.
The adjacent table shows how deferred taxes are allocated to the respective balance sheet items. Within the PCC Group, deferred tax assets and liabilities are offset if they relate to the same tax jurisdiction and if there is a legally enforceable right to offset tax liabilities and assets. For the reporting year, deferred tax assets amounted to
€ 9.4 million (previous year: € 15.7 million) and deferred tax liabilities to € 15.6 million (previous year: € 18.5 million).
€ 9.4 million (previous year: € 15.7 million) and deferred tax liabilities to € 15.6 million (previous year: € 18.5 million).
The table below shows the unnetted deferred taxes. Future tax benefits from a special economic zone are reported under other deferred taxes.
Deferred tax assets on tax-deductible loss carryforwards decreased by € 18.5 million in the past fiscal year to € 3.2 million as of the reporting date.
(35) Additional disclosures relating to financial instruments
As an internationally active corporation, the PCC Group is exposed to financial risks in the course of its ordinary business operations. A major objective of the corporate policy is to generally restrict market, default and liquidity risks, in order both to secure enterprise value over the long term and to maintain the Group’s earning power and thus extensively cushion the negative impact of fluctuations in cash flow and earnings.
The Group holding company and the individual subsidiaries cooperate in the management of interest rate and currency risks, and also default risks. Each individual operating entity is responsible for managing its own commodity or raw material price risks, while liquidity control is the responsibility of the holding company.
Market risks
Currency risks: Changes in exchange rates can lead to losses in the value of financial instruments as well as to adverse changes in future cash flows from planned transactions. Currency risks arising from financial instruments result from the translation of financial receivables, loans, securities, cash, and financial liabilities into the functional currency of the respective companies at the closing rate at year-end. Specifically, currency risks arise both on the purchasing side through the procurement of raw materials and on the sales side through the sale of finished products. A potential 10 % change in the Polish złoty would have an impact on equity and net income of € 0.3 million (previous year: also € 0.3 million). A 10 % change in the exchange rate of the US dollar would alter these items by € 0.2 million (previous year: € 0.1 million).
Interest rate risks: These risks arise from potential changes in market interest rates and can lead to changes in the fair value of fixed-rate financial instruments and to fluctuations in interest payments for variable-rate financial instruments. A potential change in interest rates of 100 basis points would have an impact of € 6.0 million on the Group’s equity and net income (previous year: € 5.2 million).
Commodity price risks: These risks result from changes in market prices for raw material purchases and sales, and also for electricity and gas purchases. The availability and price sensitivity of relevant raw materials, feedstocks, precursors and intermediates, are of great significance for the PCC Group’s overall risk profile. In this context, the dependence of key commodity prices on exchange rates and market quotations should be noted, particularly for petrochemical raw materials. Price volatility is mitigated, among other things, by agreeing on price escalation clauses with suppliers and customers. Furthermore, commodity price risks are mitigated through internationally aligned purchasing activities. Backward integration along the value chain or along the production stages in the chemical-producing segments additionally ensures a higher degree of independence in the procurement of raw materials and reduces risk. The commodity trading business in the Trading & Services segment is, in part, exposed to significant price fluctuations.
Default or credit risks
Default or credit risks arise when contractual partners are unable to meet their contractual obligations. Credit limits are granted based on the continuous monitoring of the creditworthiness of major debtors. Because of the international activity and the diversified customer structure of the PCC Group, there are no major regional or segment-specific clusters of default risks. In selecting short-term capital investments, various safeguarding criteria are considered (e.g. ratings, capital guarantees or safeguards afforded by deposit protection funds). Given the selection criteria applied and our regime of constantly monitoring our capital investments, the PCC Group does not envisage any unidentified default risk occurring in this domain. The financial asset amounts shown in the balance sheet essentially represent the maximum default risk. Such risks are regularly monitored and analyzed within the framework of a receivables and credit management regime and also by a Working Capital Management unit with responsibility at both the operational and Group levels. In all, receivables from customers are secured in an amount of € 69.3 million (previous year: € 68.7 million). Financial assets that are neither past due nor impaired are classified as collectible based on the creditworthiness of the debtors.
Liquidity risks
Liquidity risks result from fluctuations in cash flows. Current liquidity is monitored and managed through a Group-wide treasury reporting system based on an IT-supported solution (Nomentia Treasury Management, formerly Treasury Information Platform). In medium- and long-term liquidity planning, liquidity risks are identified and managed at their inception on the basis of simulations of various scenarios. Obstacles that may arise within the SME bonds market segment could – at least temporarily – lead to liquidity bottlenecks. This risk is to be countered over the long term through the development of alternative financing sources at the institutional level. In addition, we are constantly engaged in partially replacing the liquidity loans granted to our affiliated companies with bank loans.
Financial instruments by class and category
For trade accounts receivable, receivables from affiliated companies or companies in which the Group holds an equity interest, as well as for other financial assets, cash and cash equivalents, trade accounts payable, and other liabilities, the carrying amounts are considered a realistic estimate of their fair values due to their short remaining terms.
The cash flows of other long-term financial assets consist solely of interest and principal payments, hence the carrying amount is considered a realistic estimate of their fair values.
The Group holding company and the individual subsidiaries cooperate in the management of interest rate and currency risks, and also default risks. Each individual operating entity is responsible for managing its own commodity or raw material price risks, while liquidity control is the responsibility of the holding company.
Market risks
Currency risks: Changes in exchange rates can lead to losses in the value of financial instruments as well as to adverse changes in future cash flows from planned transactions. Currency risks arising from financial instruments result from the translation of financial receivables, loans, securities, cash, and financial liabilities into the functional currency of the respective companies at the closing rate at year-end. Specifically, currency risks arise both on the purchasing side through the procurement of raw materials and on the sales side through the sale of finished products. A potential 10 % change in the Polish złoty would have an impact on equity and net income of € 0.3 million (previous year: also € 0.3 million). A 10 % change in the exchange rate of the US dollar would alter these items by € 0.2 million (previous year: € 0.1 million).
Interest rate risks: These risks arise from potential changes in market interest rates and can lead to changes in the fair value of fixed-rate financial instruments and to fluctuations in interest payments for variable-rate financial instruments. A potential change in interest rates of 100 basis points would have an impact of € 6.0 million on the Group’s equity and net income (previous year: € 5.2 million).
Commodity price risks: These risks result from changes in market prices for raw material purchases and sales, and also for electricity and gas purchases. The availability and price sensitivity of relevant raw materials, feedstocks, precursors and intermediates, are of great significance for the PCC Group’s overall risk profile. In this context, the dependence of key commodity prices on exchange rates and market quotations should be noted, particularly for petrochemical raw materials. Price volatility is mitigated, among other things, by agreeing on price escalation clauses with suppliers and customers. Furthermore, commodity price risks are mitigated through internationally aligned purchasing activities. Backward integration along the value chain or along the production stages in the chemical-producing segments additionally ensures a higher degree of independence in the procurement of raw materials and reduces risk. The commodity trading business in the Trading & Services segment is, in part, exposed to significant price fluctuations.
Default or credit risks
Default or credit risks arise when contractual partners are unable to meet their contractual obligations. Credit limits are granted based on the continuous monitoring of the creditworthiness of major debtors. Because of the international activity and the diversified customer structure of the PCC Group, there are no major regional or segment-specific clusters of default risks. In selecting short-term capital investments, various safeguarding criteria are considered (e.g. ratings, capital guarantees or safeguards afforded by deposit protection funds). Given the selection criteria applied and our regime of constantly monitoring our capital investments, the PCC Group does not envisage any unidentified default risk occurring in this domain. The financial asset amounts shown in the balance sheet essentially represent the maximum default risk. Such risks are regularly monitored and analyzed within the framework of a receivables and credit management regime and also by a Working Capital Management unit with responsibility at both the operational and Group levels. In all, receivables from customers are secured in an amount of € 69.3 million (previous year: € 68.7 million). Financial assets that are neither past due nor impaired are classified as collectible based on the creditworthiness of the debtors.
Liquidity risks
Liquidity risks result from fluctuations in cash flows. Current liquidity is monitored and managed through a Group-wide treasury reporting system based on an IT-supported solution (Nomentia Treasury Management, formerly Treasury Information Platform). In medium- and long-term liquidity planning, liquidity risks are identified and managed at their inception on the basis of simulations of various scenarios. Obstacles that may arise within the SME bonds market segment could – at least temporarily – lead to liquidity bottlenecks. This risk is to be countered over the long term through the development of alternative financing sources at the institutional level. In addition, we are constantly engaged in partially replacing the liquidity loans granted to our affiliated companies with bank loans.
Financial instruments by class and category
For trade accounts receivable, receivables from affiliated companies or companies in which the Group holds an equity interest, as well as for other financial assets, cash and cash equivalents, trade accounts payable, and other liabilities, the carrying amounts are considered a realistic estimate of their fair values due to their short remaining terms.
The cash flows of other long-term financial assets consist solely of interest and principal payments, hence the carrying amount is considered a realistic estimate of their fair values.
- FAaC = Financial assets measured at amortized cost FLaC = Financial liabilities measured at amortized cost FVtOCI = Fair value through other comprehensive income FVtPL = Fair value through profit or loss
Certain liabilities from bonds issued by subsidiaries include sales commissions and are accounted for using the effective interest method. The fair value stated in this section corresponds to market quotations.
Net gains and losses from financial instruments include valuation gains and losses, the amortization of premiums and discounts, the recognition and reversal of impairment losses, foreign currency translation gains and losses, as well as interest, dividends, and all other effects on profit or loss arising from financial instruments. Financial instruments measured at fair value through profit or loss include only gains and losses from instruments that are not designated as hedging instruments within a designated hedging relationship per IFRS 9. Net gains and losses from financial assets measured at amortized cost include net interest income of € 2.8 million (previous year: € 4.2 million) and net foreign exchange losses of € –17.2 million (previous year gain: € 0.4 million). Net gains and losses from financial liabilities measured at amortized cost include a net interest result of € – 50.9 million (previous year: € – 48.8 million) and a foreign exchange loss of € – 4.3 million (previous year gain: € 9.0 million).
Financial assets and liabilities measured at fair value are presented in the table. These consist of equities, which are valued at the market price (Level 1), as well as derivatives. The fair value of derivative financial instruments depends on the development of the underlying market factors. The respective fair values are determined and monitored at regular intervals. The fair value determined for all derivative financial instruments is the price that would be paid upon the sale of an asset or the transfer of a liability in a routine transaction between independent market participants on the valuation date.
Derivative financial instruments
The subsidiaries of the PCC Group use derivative financial instruments to hedge interest rate and foreign currency risks. The valuation methods and assumptions underlying the valuation of the derivative financial instruments used can be summarized as follows: Foreign exchange transactions and swaps are valued individually at their forward rate or price as of the reporting date. The forward rates or prices are based, as far as possible, on market quotations, taking into account forward premiums and discounts where applicable.
Subsidiaries use forward contracts to hedge foreign currency transactions. As of December 31, 2025, forward exchange contracts with a notional value of € – 11.6 million (previous year: € – 0.6 million) were in effect. The immaterial fair values are recognized as an asset. Within the PCC Group, interest rate swaps and interest rate options are used to hedge interest rates and their long-term development. The notional value of the derivatives outstanding as of the reporting date amounted to € 83.2 million (previous year: € 86.1 million) and had a fair value of € 3.7 million, which was recognized as an asset as of the reporting date (previous year: € 4.1 million).
There were no cash flow hedges in either the reporting year or the previous year.
(36) Leases
Leases in which the PCC Group is the lessee are accounted for using the rights-of-use model in accordance with IFRS 16. A tabular presentation of the rights of use for the year under review can be found in Note (21) Right-of-use Assets. Right-of-use assets amounting to € 94.0 million were countervailed by lease liabilities of € 76.9 million as of the reporting date. The latter are reported under financial liabilities. Please refer to Note (32) Financial Liabilities. The maturity structure of payment obligations under leases is shown in the adjacent table.
Compliant with the exemptions allowed, no right-of-use assets have been recognized in the balance sheet where the underlying leased asset is of minor value or where the contractual term is less than twelve months. Instead, the lease is expensed. The table opposite shows the amounts recognized in the consolidated statement of income in connection with leases.
There was no material income from subleases. In total, cash outflows from lease agreements amounted to € 24.2 million in the past fiscal year (previous year: € 21.8 million). In addition to lease agreements, the PCC Group has minor obligations arising from rental agreements. A corresponding maturity profile is presented in the following Note (37).
(37) Contingent liabilities and other financial commitments
Contingent liabilities mainly result from guarantees given to the financing bank of a joint venture. They also relate to guarantees issued for non-consolidated entities in favor of third parties and relate to obligations to suppliers and to the public sector. The change in other contingent liabilities results from the inclusion of investment grants, some of which may still be subject to claims for repayment in the event that contractually agreed covenants are not met. The PCC Group currently expects that no claims will be made in respect of any such contingent liabilities.
As of December 31, 2025, the PCC Group had other financial obligations arising from investment commitments, lease obligations, and other obligations totaling € 26.3 million (previous year: € 57.1 million). Obligations arising from rental agreements with a remaining term of up to one year include commitments of € 0.2 million attributable to short-term leases.
(38) Statement of cash flows and capital structure management
Statement of cash flows
The statement of cash flows shows the changes in cash and cash equivalents that took place in the year under review and has been drawn up in accordance with IAS 7. The cash flows are broken down according to cash flow from operating activities, cash flow from investing activities and cash flow from financing activities.
Interest received and taxes paid on income are recognized as cash flow from operating activities. Interest paid is disclosed under cash flow from financing activities. Dividends paid are a component of the financing activities category. Dividends paid within the Group from income attributable to the previous year are eliminated. Dividend payments to the shareholder of PCC SE and dividend payments to co-shareholders at subsidiaries are separately disclosed in cash flow from financing activities. Financial funds disclosed equate to the total of cash and cash equivalents (cash on hand, credit balances at banks, and current, highly liquid financial assets) shown in the balance sheet.
In the event of changes in the scope of consolidation arising from the purchase or sale of entities (loss of control), the purchase price paid or received, adjusted for the financial funds acquired or sold, is recognized under cash flow from investing activities. If the acquisition or disposal of shares in a subsidiary takes place without a change in the control status, such transactions are disclosed as financing activities.
The conclusion of a lease agreement per IFRS 16 essentially constitutes a non-cash transaction. Payments made for investments in property, plant and equipment are netted against lease proceeds. Cash and cash equivalents disclosed in the balance sheet included an amount as of December 31, 2025 of € 2.5 million (previous year: € 3.5 million) in funds not freely available. These were almost entirely attributable to funds already allocated to investment projects.
The following reconciliation statement shows changes in financial liabilities that are reported as cash inflows or outflows in cash flow from financing activities. Cash-effective changes amounted to € 34.9 million as of the reporting date (previous year: € 48.5 million).
Capital structure management
The purpose of capital structure management is to remain financially flexible so that the business portfolio can be effectively further developed and strategic options exploited. The objects of the financial policy of the Group are to secure its liquidity and solvency, limit financial risks and optimize the cost of capital. The control metric adopted in this context is the net debt / EBITDA leverage ratio. This metric shows the relationship between net borrowings, including current and non-current pension provisions, current and non-current financial liabilities, cash and cash equivalents and current securities, and earnings before interest, taxes, depreciation and amortization (EBITDA), and is therefore a dynamic indebtedness indicator.
With net debt of € 979.4 million (previous year: € 860.1 million) and reported EBITDA of € 81.4 million (previous year: € 88.0 million), the net debt / EBITDA ratio was 12.0 for the 2025 fiscal year (previous year: 9.8). Our goal of keeping this ratio below 5.0 was therefore not achieved.
Certain subsidiaries are subject to external minimum capital requirements under financing agreements, which are reflected in the form of standard financial covenants – that is, obligations to comply with specified financial limits. These include, among other things, standard market requirements for minimum equity ratios and maximum debt-to-equity ratios. Compliance with these requirements is also taken into account in the annual budget planning for the following year. According to the information submitted by the consolidated companies for the preparation of the consolidated financial statements, the necessary covenants were not met in two instances during the 2025 fiscal year. In one case, a financial ratio typical of loan agreements was not met. In the other case, an agreement regarding compliance with a credit line was not fulfilled. There have been no adjustments to the loan terms or similar measures on the part of the lenders.
