3.7Provisions
CHF million | 2025/26 | |||||||||
Warranty and returns | Reimbursement to customers | Product liabilities | Other provisions | Total | ||||||
Balance 1 April | 117.8 | 12.6 | 28.4 | 26.3 | 185.1 | |||||
Changes through business combinations | 0.0 | 0.2 | 0.2 | |||||||
Amounts used | (50.2) | (11.1) | (12.8) | (13.0) | (87.0) | |||||
Reversals | (20.3) | (1.0) | (2.3) | (7.3) | (30.9) | |||||
Increases | 79.4 | 10.5 | 25.9 | 16.5 | 132.3 | |||||
Exchange differences | (8.4) | (0.9) | (2.7) | (1.2) | (13.1) | |||||
Transferred to liabilities directly associated with assets held for sale | (8.3) | (8.0) | (4.8) | (21.2) | ||||||
Balance 31 March | 109.9 | 2.2 | 36.5 | 16.6 | 165.3 | |||||
thereof short-term | 77.5 | 2.2 | 12.6 | 5.9 | 98.3 | |||||
thereof long-term | 32.5 | 23.9 | 10.7 | 67.1 |
CHF million | 2024/25 | |||||||||
Warranty and returns | Reimbursement to customers | Product liabilities | Other provisions | Total | ||||||
Balance 1 April | 123.5 | 11.0 | 44.8 | 29.4 | 208.7 | |||||
Changes through business combinations | 0.2 | 0.4 | 0.5 | |||||||
Amounts used | (40.1) | (9.9) | (15.7) | (13.1) | (78.8) | |||||
Reversals | (19.7) | (3.7) | (0.2) | (7.4) | (31.0) | |||||
Increases | 57.6 | 15.5 | 17.5 | 90.6 | ||||||
Present value adjustments | 0.5 | 0.5 | ||||||||
Exchange differences | (3.6) | (0.2) | (1.0) | (0.7) | (5.5) | |||||
Balance 31 March | 117.8 | 12.6 | 28.4 | 26.3 | 185.1 | |||||
thereof short-term | 87.3 | 12.4 | 5.8 | 13.0 | 118.5 | |||||
thereof long-term | 30.5 | 0.2 | 22.7 | 13.3 | 66.6 | |||||
The reduction in provisions primarily relates to the classification of the Consumer Hearing business as discontinued operations as at 31 March 2026 (refer to Note 6.3).
Warranty and returns
The provision for warranty and returns considers any costs arising from the warranty given on products sold. In general, the Group grants a 12 to 24 months warranty period for audio devices, hearing instruments and related products and up to 10 years on cochlear implants. The calculation is based on turnover, past experience and projected number and costs of warranty claims and returns.
Reimbursement to customers
The provision for reimbursement to customers considers commitments to provide volume rebates. The provision is based on expected volumes. The large majority of the cash outflows are expected to take place within the next 12 months.
Product liabilities
The provisions for product liabilities mainly relates to the Advanced Bionics voluntary field corrective action regarding cochlear implant products, as announced on 18 February 2020.
The provisions for product liabilities are reassessed on a regular and systematic basis and follow a financial model which is consistently applied. The calculation of the provision is based on past experience regarding the number and cost of current and future claims. In the 2025/26 financial year, changes in the assessments of the expected number and cost of current and future claims led to an increase of CHF 25.9 million as well as a separate reversal of CHF 2.3 million (previous year reversal of CHF 0.2 million). As per 31 March 2026 the provision for product liabilities amount to CHF 36.5 million (previous year CHF 28.4 million). The timing of future cash outflows is uncertain since it will largely depend on the outcome of administrative and legal proceedings. In the case of the voluntary recall of AB products in 2006, considering periods of limitation, claims will have until 2026 to be filed in most jurisdictions. However, depending on the length of proceedings and negotiations, further years may pass until all claims are settled. We expect the main cash outflow relating to the provision for product liabilities to occur within the next 3 years.
Other provisions
Other provisions include provisions for specific business risks such as litigation CHF 0.9 million (prior year CHF 1.0 million) and restructuring costs CHF 3.0 million (prior year CHF 8.9 million). While the timing of the cash outflow from the restructuring provisions is expected to take place within the next 12 months, the cash outflows for the remainder of the other provisions is expected to take place within the next two years.
Accounting policies
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event, where it is probable that an outflow of resources will be required to settle the obligation, and where a reliable estimate can be made of the amount of the obligation. If the effect of the time value of money is material, provisions are determined by discounting the expected future cash flows.
Accounting judgements and estimates
Provisions are based upon managementʼs best estimate, taking into consideration past experience regarding the number and cost of claims. Management believes that the provisions are adequate based upon currently available information. However, given that judgment has to be applied, the actual costs and results may differ from these estimates.