4 Capital and Financial Risk Management

This section outlines the procedures and guidelines for managing the Group's capital structure and addressing the financial risks to which the Group is exposed.

4.6 Financial Risk Management

The Group is exposed to various financial risks arising from its operating and financing activities. To manage these risks, the Group operates a Group-wide enterprise risk management (ERM) system to identify, assess, and monitor risks and related mitigation measures. A comprehensive risk assessment is conducted annually based on defined likelihood and financial impact criteria and submitted to the RAC and the Board of Directors, complemented by a mid-year monitoring update.

Liquidity Risk

Prudent liquidity management involves maintaining adequate reserves of cash and cash equivalents. The Group generates strong operating cash flows, and liquidity risk is considered limited. As at 31 December 2025, the Group held cash and cash equivalents amounting to CHF 92,664 thousand (previous year: CHF 71,485 thousand), representing 5.2 times the average monthly operating expenses (previous year: 4.6 times).

Liquidity risk is centrally monitored and managed across the Group. Potential liquidity shortfalls are mitigated through regular liquidity planning and monthly cash flow analyses. The maturity profile of financial liabilities is continuously monitored and actively managed to ensure timely settlement.

The table below provides an analysis of the Group’s financial liabilities categorised by relevant maturity groupings, extrapolated from contractual maturities of all non-derivative financial liabilities. The amounts presented reflect contractual undiscounted cash flows and include contractual interest payments. The interest payments on variable interest-bearing borrowings shown in the table below reflect the prevailing market interest rates at the reporting date. These amounts are subject to change as interest rates fluctuate.

Financial Covenant

The credit facility is subject to a financial covenant, and non-compliance may result in an event of default. The financial covenant, evaluated on a semi-annually rolling basis, requires the Group to maintain a leverage ratio no greater than 3.25x at each testing date. The Group’s leverage ratio as defined by the financial covenant was 0.8x as of 31 December 2025 (previous year: 1.2x).

Market Risk

The Group assesses the probability and quantitative magnitude of potential financial losses arising from market uncertainties, volatility, or unexpected developments associated with financial instruments.

Currency Risk

The Group generates its income predominantly in CHF, while a small proportion of cash outflows are denominated in foreign currencies, primarily EUR and USD. On a consolidated basis, the currency risk is not considered material. Therefore, the Group does not use financial instruments to manage currency-related risks. Similarly, translation risk related to the assets and liabilities of foreign subsidiaries is limited due to low volumes and is generally not hedged, as it is not considered material.

Interest Rate Risk

The Group’s interest rate risk primarily arises from its outstanding floating rate credit facility, which exposes the Group to fluctuations in cash flows and increased volatility in profit before tax. However, the Group’s overall interest rate exposure remains low relative to profit before tax.

The floating interest rate is determined by both the movement of SARON and a predefined margin, which is influenced by the Group’s leverage ratio (refer to Liquidity Risk). Based on its risk assessment, the Group has not identified a need to use interest rate derivatives to hedge its exposure to floating interest rates.

The following table illustrates the sensitivity to a reasonably possible change in interest rates for the Group’s financial assets and liabilities. All things being equal, the Group’s profit before tax is affected by changes in variable interest rates as follows:

The range between the highest and lowest Swiss National Bank base interest rates observed in 2025 was 0.5%. As this was below the threshold of one percentage point, the Group applied the minimum rate change of ±1% in its sensitivity analysis.

Credit Risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations. Credit risk primarily arises from cash and cash equivalents, financial assets and trade receivables, and is limited to the carrying amounts of those assets.

The Group minimises counterparty risk by holding a substantial share of its cash and cash equivalents and deposits with financial institutions that have a Standard & Poor's rating of BBB- or better. Additionally, risks are further mitigated by predominantly working with leading financial institutions based in Switzerland.

A significant portion of the Group’s financial assets, amounting to CHF 4,720 thousand (previous year: CHF 7,298 thousand), comprises loans granted to MEP participants. A qualitative assessment has shown that the credit risk associated with loans granted to selected key employees under the Group’s share-based compensation plan is low. In addition, a total of CHF 914 thousand (previous year: CHF 950 thousand) is held as bank deposits. This primarily relates to the Group’s rental deposit for business premises and is assessed by the Group as low risk.

Financial Risk from Operating Activities and Valuation Allowances

Credit risk on trade receivables arises from the Group’s operating activities. The Group manages default risk through established trade receivables management processes. Default risk is primarily influenced by individual customer characteristics and the industry sectors in which customers operate. Given the heterogeneous customer structure, the Group does not apply general credit limits for trade receivables.

The Group considers credit risk on trade receivables to be limited, as it is not exposed to material concentration risk due to its large and well-diversified customer base. At the reporting date, the largest single customer accounted for 0.9% (previous year: 1.2%) of the outstanding gross carrying amount of trade receivables, while the five most significant customers together accounted for 4.3% (previous year: 4.5%).

In assessing default risk, the Group considers both the business unit in which the customer operates and the ageing profile of trade receivables. The breakdown of trade receivables by aging is as follows:

Allowances for trade receivables are remeasured based on credit loss rates in accordance with the expected credit loss model. Increases and reversals of allowances for doubtful trade receivables are recognised under other operating expense.

Optimisation measures that selected business units implemented in the reporting year, including the expansion of electronic payment methods for certain customer groups, improved the efficiency and quality of payment processes and helped reduce allowances.

The movements in valuation allowances are set out below.

4.2 Financial Assets

Loan receivables consist of loans granted to MEP participants to finance the purchase of SMG Holding shares (refer to Note 2.2). These loans bear interest at market rates, with an interest rate of 1.71% in 2025 (previous year: 2.02%). Deposits comprise security deposits for leased office premises, the majority of which relate to the Zurich office location.

4.1 Capital Management and Equity

The Board of Directors is committed to maintaining a balanced capital structure to uphold investor, creditor and market confidence, while enabling the Group’s long-term growth. The Group has an outstanding credit facility that is subject to compliance with a financial covenant (refer to Note 4.6). Capital structure is managed using the net debt to Adjusted EBITDA ratio as a key financial metric. In the financial year 2025, this ratio amounted to 0.7x, compared with 1.2x in the previous year.

The Group’s strong cash position enables the Board of Directors to allow shareholders to participate in the Group’s success through dividend distributions. Own shares may be acquired on the market solely for the purposes of the Group’s equity-settled share based compensation plans. There is no formal share buy-back programme in place.

Share Capital

As at 31 December 2025, the share capital of SMG Swiss Marketplace Group Holding AG amounts to CHF 294,435.60 and consists of 98,145,200 fully paid registered shares with a nominal value of CHF 0.003 per share.
As at 31 December 2024, the share capital of SMG Swiss Marketplace Group AG, the former ultimate parent entity of the Group, amounted to CHF 2,454,630, equating to 2,453,630 registered shares with a nominal value of CHF 1 per share. For further details on the legal restructuring completed prior to the IPO, please refer to the note Basis of Preparation and Key Accounting Assumptions.

Capital Band and Conditional Capital

The Company has a capital band ranging from CHF 279,713.82 (lower limit) to CHF 309,157.38 (upper limit). Within this range, the Board of Directors is authorised to increase or reduce the share capital one or more times by 2 September 2030 at the latest, either by issuing or cancelling up to 4,907,260 shares with a nominal value of CHF 0.003 each, or by adjusting the nominal value of existing shares. The additional terms and conditions of the capital band are set out in Article 3 of the Articles of Association.

The Company’s share capital may be increased by way of conditional capital up to CHF 14,721.78 through the issuance of up to 4,907,260 shares with a nominal value of CHF 0.003 each. The additional terms and conditions of the conditional capital (including the purpose and the group of beneficiaries with subscription rights) are set out in Article 3b and 3c of the Articles of Association.

Under Article 3d of the Articles of Association, the number of new shares that may be issued from the capital band and the conditional capital is limited to a cumulative maximum of 4,907,260 shares.

As of 31 December 2025, there had been no capital increases or reductions within the capital band, nor shares issued out of conditional capital since its introduction in September 2025.

Capital Reserves

The contribution in kind relating to the pre-IPO restructuring was recognised net of directly attributable issuance stamp tax of CHF 261 thousand, resulting in a closing balance of CHF 901,398 thousand. Of this amount, CHF 461,965 thousand was confirmed by Switzerland’s Federal Tax Administration as reserves from capital contributions, which may be repaid without deduction of Swiss withholding tax in accordance with Article 5 para. 1bis of the Withholding Tax Act.

Treasury Shares

Treasury shares represent the net balance of shares purchased on the market or repurchased from plan participants, and shares sold to new participants or allocated to participants in connection with the Group’s equity-settled share-based compensation plans (refer to Note 2.2). The table below summarises movements in the Group’s treasury shares during the reporting period:

Under the MEP, plan participants were able to obtain loans from the Group to finance the purchase of shares. To reflect the effective cash flows in the statement of cash flows, particularly in the event of a participant’s exit from the Group or a grant of new shares, the purchase of treasury shares is presented net of loan repayments by employees, while the sale of treasury shares is presented net of loans granted to employees.

Earnings per Share

Earnings per share are calculated by dividing profit after tax attributable to the equity owners of the parent company by the weighted average number of shares outstanding, with diluted earnings per share reflecting the impact of potentially dilutive shares.

Basic Earnings per Share

Diluted Earnings per Share

As of the reporting date, 15,611 contingently issuable shares (previous year: 0) were excluded from the diluted weighted average number of shares outstanding calculation because their effect would have been anti-dilutive.

4.4 Financial Instruments

This section summarises the classification and measurement of financial instruments. It presents the categories and carrying amounts of financial instruments, followed by an overview of their valuation within the fair value measurement hierarchy, where applicable.

Carrying Amounts and Fair Values of Financial Instruments by Category

The fair values of financial instruments such as cash and cash equivalents, trade receivables, trade payables, and other assets and liabilities are considered to approximate their carrying amounts due to their short-term nature. The table below presents the carrying amounts and fair values of financial instruments by category:

The table above only includes components of the respective financial captions in the statement of financial position that qualify as financial instruments. As a result, certain non-financial components are excluded, and the amounts presented may not fully reconcile with the corresponding financial captions in the statement of financial position. It does not include fair value information for lease liabilities as they are exempted from the fair value disclosure.

Financial Instruments Carried at Fair Value

Fair values are allocated to one of the following three hierarchical levels:

• Level 1: quoted (unadjusted) prices in active markets for identical assets or liabilities.
• Level 2: inputs other than quoted prices included within level 1 observed for the asset or liability, either directly or indirectly.
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).

There were no transfers between level 1 and level 2 fair value measurements during the reporting period. Details of the determination of level 3 fair value measurements are set out below:

The fair value adjustment relates exclusively to the call option written by the Group to the minority shareholder of Flatfox AG. The minority shareholder waived the call option in return for a payment of CHF 1,550 thousand. In addition, the contingent consideration liability arising from the acquisition of moneyland.ch AG was paid in full.

4.3 Financial Liabilities

Interest-bearing borrowings decreased due to the contractual repayment of CHF 14,375 thousand of the outstanding credit facility. The subordinated loan is held by the minority shareholder of Flatfox AG and remained unchanged.

Other financial liabilities comprise the non-controlling interest put liability towards the minority shareholder of Flatfox AG. The decrease compared with the prior year is due to the settlement of the contingent consideration relating to the acquisition of moneyland.ch AG and the waiver of the call option by the minority shareholder of Flatfox AG in return for a payment of CHF 1,550 thousand (refer to Note 4.4).

The liabilities arising from financial activities comprise financial liabilities and lease liabilities.

Repayment of financial liabilities in 2025 comprises the first credit facility instalment (CHF 14,375 thousand), the moneyland.ch earn-out (CHF 5,100 thousand), and the call option liability (CHF 1,550 thousand).

Non-cash changes resulting from business combinations comprise the fair value adjustment of the call option liability (CHF 1,299 thousand) and the unwinding of the discount on the non-controlling interest put liability measured at amortised cost (CHF 447 thousand).

Non-cash changes resulting from other changes primarily reflect new and extended lease agreements (CHF 1,089 thousand) and the unwinding of the discount on the credit facility measured at amortised cost (CHF 474 thousand).

4.5 Financial Income and Expense

Interest expense increased as a consequence of the drawdown of the credit facility in November 2024.

The increase in other financial expense is primarily driven by a fair value adjustment of CHF 1,299 thousand relating to the call option written by the Group to the minority shareholder of Flatfox AG (refer to Note 4.4).