4.8Financial instruments

This note discloses the categorization of financial instruments measured at fair value based on the fair value hierarchy.

Accounting policies

Financial instruments measured at fair value are allocated to one of the following three hierarchical levels:

Level 1:

The fair value of financial instruments traded in active markets is based on quoted market prices at the balance sheet date.

Level 2:

The fair value of financial instruments that are not traded in an active market is determined by using valuation techniques. These valuation techniques are based on observable market data, where applicable. If all significant inputs required to value an instrument are observable, the instrument is included in level 2.

Level 3:

If a significant amount of inputs is not based on observable market data, the instrument is included in level 3. For this level, other techniques, such as discounted cash flow analysis, are used to determine fair value.

During the reporting period, there were no reclassifications between the levels.

The following table summarizes the financial instruments of the Group and the valuation method for financial instruments at fair value through profit and loss.

CHF million

31 March 2026

Notes

Amortized cost

FVPL

Total financial instruments

Non-financial instruments

Total

Fair value1)

Level 1

Level 2

Level 3

Assets

Cash and cash equivalents

4.1

721.9

721.9

721.9

Other current financial assets

4.4

9.1

1.8

11.0

11.0

1.8

0.1

1.8

Trade receivables

3.1

527.3

527.3

527.3

Other current operating assets

3.6

88.1

88.1

82.7

170.8

Other non-current financial assets

4.4

52.7

51.2

103.9

103.9

51.2

49.6

1.6

Total

1,399.1

53.1

1,452.1

82.7

1,534.9

53.1

49.7

1.8

1.6

Liabilities

Current financial liabilities

4.5

114.4

3.3

117.6

117.6

117.2

114.3

2.8

Trade payables

177.1

177.1

177.1

Other short-term operating liabilities

3.8

115.6

115.6

239.5

355.1

Bonds2)

4.5

1,302.1

1,302.1

1,302.1

1,311.0

1,311.0

Non-current financial liabilities

4.5

56.0

0.6

56.6

0.9

57.4

55.2

54.6

0.6

Total

1,765.1

3.9

1,769.0

240.3

2,009.4

1,483.4

1,311.0

168.9

3.4

1)For financial assets and financial liabilities measured at amortized cost, fair value information is not provided if the carrying amount is a reasonable approximation of fair value.

2)Includes short- and long-term portion of Bonds.

CHF million

31 March 2025

Notes

Amortized cost

FVPL

Total financial instruments

Non-financial instruments

Total

Fair value1)

Level 1

Level 2

Level 3

Assets

Cash and cash equivalents

4.1

686.9

686.9

686.9

Other current financial assets

4.4

10.4

1.8

12.2

12.2

1.8

0.2

1.6

Trade receivables

3.1

576.9

576.9

576.9

Other current operating assets

3.6

99.3

99.3

60.2

159.6

Other non-current financial assets

4.4

61.5

2.9

64.4

64.4

2.9

1.2

1.7

Total

1,435.1

4.7

1,439.8

60.2

1,500.0

4.7

1.4

1.6

1.7

Liabilities

Current financial liabilities

4.5

0.6

9.9

10.4

10.4

9.9

0.4

9.5

Trade payables

269.0

269.0

269.0

Other short-term operating liabilities

3.8

123.3

123.3

253.1

376.4

Bonds/US Private Placement2)

4.5

1,511.7

1,511.7

1,511.7

1,518.3

1,359.7

158.6

Non-current financial liabilities

4.5

1.6

52.5

54.1

3.3

57.4

52.5

Total

1,906.2

62.4

1,968.6

256.4

2,225.0

1,528.2

1,359.7

158.9

62.0

1)For financial assets and financial liabilities measured at amortized cost, fair value information is not provided if the carrying amount is a reasonable approximation of fair value.

2)Includes short- and long-term portion of Bonds/US Private Placement.

The following table presents the changes in level 3 contingent consideration liabilities for the year ended 31 March 2026 and 2025:

Contingent considerations CHF million

2026

2025

Total

Total

Balance 1 April

62.0

71.4

Changes through business combinations

3.0

5.2

Cash outflow for contingent considerations

(14.7)

(12.0)

Gains recognized in profit or loss

(1.3)

(1.1)

Exchange differences

(2.4)

(1.5)

Transferred to liabilities directly associated with assets held for sale

(43.2)

Balance 31 March

3.4

62.0

Contingent considerations of CHF 3.4 million (31 March 2025: 13.7 million) relate to earn-out agreements from acquisitions (refer to Note 6.1). The fair values are determined by considering the possible scenarios of the future performance of the acquired companies, contractual obligations and milestone achievements, the amount to be paid under each scenario and the probability of each scenario. The significant unobservable inputs are the forecast sales and other performance criteria. As at 31 March 2026 and 2025, the maximum potential payments under contingent considerations do not differ significantly from the amounts provided.

In the prior year, contingent considerations further included a license agreement for the Sennheiser brand for which a liability was recognized for the expected future licensing payments. The liability was transferred to liabilities directly associated with assets held for sale during FY 2025/26 (refer to Note 6.3 Discontinued operations). As of 31 March 2025 the fair value of the license liability amounted to CHF 48.3 million.

Accounting judgements and estimates

Contingent considerations are dependent on the future performance of the acquired companies as well as contractual obligations. If the future performance is not achieved or the estimate needs to be revised, the liability is adjusted accordingly, with a resulting change in the income statement. At the end of the 2025/26 financial year, such liabilities contingent on future events amount to CHF 3.4 million (previous year CHF 62.0 million) and are disclosed under Financial liabilities at fair value through profit or loss (Note 4.5).