Notes to the Consolidated Financial Statements

In 2025, the increase in personnel expenses is primarily attributable to past service costs arising from the harmonisation of pension plan providers (refer to Note 2.3), as well as higher share-based compensation expense, mainly driven by a fair value adjustment of the Phantom Stock Plan (PSP) (refer Note 3.8) and the introduction of new share-based compensation plans during the year (refer to Note 2.2).

Other personnel expense includes expenses related to recruitment, severance payments, training and education.

Until the IPO on 19 September 2025, the Group maintained share-based compensation plans that had been established prior to the IPO. With the listing on the SIX Swiss Exchange, the Group comprehensively redesigned its compensation structure, introducing new share-based compensation plans to further incentivise performance during the important post-IPO phase and beyond. To align with market practice for listed companies and strengthen the link between pay and shareholder value creation, the Group implemented an equity-based post-IPO compensation framework.

The IPO constituted a liquidity event under the terms of the pre-IPO share based compensation plans, as a result of which the plans were either settled, discontinued, or continued subject to their original lock up or vesting conditions. The following table describes the status of the pre-IPO plans after the IPO.

Management Equity Plan

Objective

The Management Equity Plan (MEP) was introduced to foster long term commitment to the Group’s value creation in the years leading up to the IPO among the Chairperson of the Board of Directors, Senior Management, and the external Advisory Board.

Participation and Structure

Participants had the opportunity of acquiring shares at a discounted purchase price, in compliance with Swiss tax regulations, with a mandatory two- or three-year blocking period during which the shares cannot be transferred. The MEP qualifies as an equity-settled share-based compensation plan.

Vesting and Conditions

If a participant leaves the Group during the four-year vesting period, the Group or its shareholders may repurchase all or part of the participant’s shares depending on the leaver classification. The repurchase price is determined as the fair value at grant date, less any dividends paid and any applicable blocking discount.

• Good leavers are subject to pro rata vesting, whereby any unvested shares will be repurchased by the Group or its shareholders. A participant is classified as a good leaver if employment is terminated by the employee for cause, by the Company without cause, in the event of retirement, or in other circumstances as determined by the Board of Directors in accordance with the plan rules.
• Bad leavers are not subject to pro rata vesting, whereby all granted shares will be repurchased by the Group or its shareholders. A participant is classified as a bad leaver if employment is terminated by the employee without cause, by the Company for cause, or if other circumstances defined in the plan rules apply.

Fair Value Measurement

The share price to be paid by the participant corresponds to the fair value per share at grant date minus the tax-approved discount. The fair value per share at grant date was determined using the Group’s EBITDA-multiple valuation model, as there was no observable market price available at the time. The discount is recognised as personnel expense over the vesting period. Subsequent changes in the fair value per share do not affect the measurement of the expense.

Financing Arrangements

To facilitate participation, the Group provided loan financing to plan participants covering up to 80% of the share purchase price. These are interest-bearing loans, repayable either at the repayment date (April 2029) or with an early pay-back event such as sale of shares or the end of blocking period in the extent of the PSP proceeds.

Movements in Shares

Details of Shares

In March 2025, there was an additional grant to new hires and employees who had been promoted. This grant is subject to a two-year blocking period consistent with the original plan terms.

Phantom Stock Plan

Objective

The Phantom Stock Plan was designed to reward participants for their contribution to the Group’s value creation prior to the IPO. The plan provided a long-term incentive aligned with the increase in the Group’s equity value, while allowing for cash settlement in connection with the IPO.

Participation and Structure

Participants in the plan included the Chairperson of the Board of Directors, Senior Management, and the Advisory Board. Under the PSP, participants were granted phantom stock awards (PSAs), each entitling the holder to a cash payment equal to the difference between the share value plus cumulated dividends minus a fixed exercise price, triggered upon a liquidity event (IPO).

Vesting and Conditions

PSAs are subject to a four-year vesting period from the respective grant date, comprising a one-year cliff with quarterly vesting thereafter. Should the participant leave the Company, whether as a good or bad leaver, their entitlement is reduced on a pro rata basis in accordance with the plan regulations.

Fair Value Measurement

The fair value of a PSA is determined at grant date and remeasured at each reporting date until settlement. Prior to the IPO, the fair value was derived from the Group’s EBITDA-multiple valuation model. Following the listing of the Group, fair value is based on the observable market price. The valuation reflects the time-vesting pattern of the plan and incorporates stay assumptions and applicable social security cost rates.

Movements in Phantom Stock Awards

During the financial year 2025, the Group granted additional PSAs in March and recorded forfeitures due to employee departures. Following the IPO, a significant portion of outstanding PSAs were settled and paid out in November 2025 (refer to Note 3.8). The remaining PSAs outstanding at year-end correspond to the post-IPO pot, as defined in the plan regulations.

Details of Fair Value Measurement

Profit Growth Share Plan

Objective

The Profit Growth Share Plan (PGSP) was introduced in 2024 to allow employees below Senior Management globally to participate in the Group’s annual profit growth.

Participation and Structure

Under the PGSP, eligible employees received an allocation of profit growth share units (PGSUs), based on grade and location. Each PGSU entitled the participant to a monetary amount from the profit growth pool, defined as a percentage of the Group’s year-on-year increase in Adjusted EBIT before PPA.

Instead of an immediate payout, the value calculated under the PGSP was recorded as an investment. Upon a liquidity event (IPO), the amount was multiplied by an IPO factor, which reflected the share price performance relative to a baseline equity valuation. This payout was classified as a cash-settled share-based compensation plan.

Vesting and Conditions

To qualify for the investment payout, employees had to remain with the Group until the end of the financial year 2024. The additional amount resulting from the IPO factor is only paid out if the employee remains employed six months after a potential liquidity event (IPO).

Movements in Profit Growth Share Units

Following the successful IPO in September, the Board of Directors exercised its sole discretion and approved an early payout of the PGSP in November 2025. All outstanding PGSUs were paid in cash and the plan was discontinued (refer to Note 3.8).

IPO Long-Term Incentive Plan

Objective

The IPO Long-Term Incentive Plan (IPO LTI) is a one-time equity-based incentive granted in connection with the Group’s IPO. It is designed to ensure alignment, stability, and retention of Senior Management during the first two years post-listing.

Participation and Structure

Awards are granted in the form of performance share units (PSUs) at the IPO date and are divided into two tranches, tranche A and tranche B. Eligible participants are granted PSUs determined as a percentage of their annual base salary for each tranche. Each PSU represents a conditional right to receive one share free of charge upon vesting. The IPO LTI qualifies as an equity-settled share-based compensation plan.

Vesting and Conditions

The IPO LTI is divided into two tranches with different performance measurement periods; tranche A has a one-year performance period, the financial year 2026, and tranche B has a two-year performance period, the financial years 2026 and 2027. For both tranches, vesting is conditional on the achievement of the defined performance conditions measured over the respective performance periods and on the participant remaining in active employment from the grant date until the contractual vesting date, which is up to three months after the end of the relevant performance period (service condition). The performance conditions are as follows:

• 70% cumulative Adjusted EBIT before PPA (non-market condition)
• 30% relative total shareholder return (rTSR) measured against a predefined peer group (market condition)

The performance factor ranges from 0.0 to 2.0, resulting in a payout between 0% and 200% of the PSUs originally granted.

Fair value at grant date is recognised as personnel expense on a straight-line basis over the vesting period, based on the estimated number of PSUs expected to vest. Subsequent changes in share price do not affect the expense recognition. Dividend equivalents are paid via additional PSUs at vesting.

Participants must remain in active employment throughout the vesting period. Good leavers benefit from pro-rata vesting based on completed months of service. Bad leavers forfeit all unvested PSUs.

Fair Value Measurement

The fair value of the IPO LTI at grant date is determined using a Monte Carlo simulation for the market-based rTSR condition, incorporating the IPO offer price at grant date, peer-group median volatility and correlation assumptions, the applicable CHF risk-free rate, expected dividend yield, and the expected vesting period. The fair value at grant date was calculated by an independent third-party advisor and subsequently approved by the Board of Directors.

Movements in Performance Share Units

Details of Performance Share Units

Profit Growth Share Plan 2.0

Objective

The Profit Growth Share Plan 2.0 (PGSP 2.0) enables employees below Senior Management to participate in annual profit growth and reinforces a culture of shared ownership. The plan links a portion of employee compensation to year-on-year profit improvements and strengthens alignment with Group performance beyond the IPO. PGSP 2.0 replaces the previous PGSP.

Participation and Structure

Eligible employees may participate upon nomination and approval by the Board of Directors. Entitlement is determined annually with reference to the profit growth pool, which is funded as a fixed percentage of the year-on-year growth in Adjusted EBIT before PPA. Participants receive an annual allocation of profit growth share units (PGSUs), with the number of units determined by grade and location. Once the Board of Directors has approved the profit growth pool for the year, each employee’s individual share of the pool is divided by the grant-date fair value per share to determine the number of shares delivered free of charge upon vesting. The PGSP qualifies as an equity-settled share- based compensation plan.

Vesting and Conditions

The vesting period corresponds to the performance year, being one financial year from 1 January to 31 December. Under the performance condition, year-on-year growth in consolidated Adjusted EBIT before PPA, measured over the financial year, must be positive. Under the service condition, the participant must be in active, unterminated employment as at 31 December of the respective financial year.

The formal grant date is reached only after approval of the annual allocation by the Board of Directors in the first quarter of the following year. The service and performance period nevertheless commence on 1 January of the relevant performance and financial year, and expense recognition therefore also begins at that date.

Blocking Period

For participants in Switzerland, the shares are subject to a tax blocking period of 36 months, during which they may not be sold, pledged, or transferred, while participants retain full dividend and voting rights. Management has determined that the tax blocking period does not have a material effect on the fair value at grant date and it has therefore not been reflected in the measurement.

Fair Value Measurement

The fair value per share is measured at the observable market price of the Group at grant date.

Movements in Profit Growth Share Units

Blocked Shares Plan

Objective

The Blocked Shares Plan aims to strengthen long-term alignment between the Chairperson of the Board of Directors and the Group’s shareholders. By granting shares that are subject to a mandatory blocking period, the plan ensures long-term alignment of the Chairperson of the Board of Directors with shareholder value development.

Participation and Structure

Shares are granted and transferred annually at the grant date, calculated as a fixed percentage of the Board compensation and converted into a corresponding number of shares.

Vesting and Conditions

The vesting period corresponds to the term of office for which the shares are granted. For the shares to vest, the Chairperson of the Board of Directors must have an active, unterminated Board mandate from the grant date until the next Annual General Meeting. No performance conditions apply.

Should the mandate end at the Annual General Meeting due to resignation or non-re-election, the Chairperson of the Board of Directors retains full entitlement to the granted shares, which remain subject to a blocking period. In the event of early termination during the term of office, the Chairperson of the Board of Directors is entitled to a pro-rata portion of the shares based on completed months of service. Non-earned shares must be returned to the Company.

Blocking Period

All vested shares are subject to a mandatory three-year blocking period starting on the grant date. During this period, shares cannot be sold, pledged, or otherwise transferred. The Chairperson of the Board of Directors retains full voting and dividend rights throughout the blocking period. Management has determined that the blocking period does not have a material effect on the grant-date fair value and it is therefore not reflected in the measurement.

Details of Fair Value Measurement and Shares

The grant-date fair value of granted shares corresponds to the observable market price at grant date. For the IPO year 2025, the applicable reference price was the IPO offer price.

Significant Judgements and Estimates

The measurement of share-based payment transactions requires management to exercise judgement, in particular in determining the appropriate valuation method and key assumptions used to measure the fair value of the awards.

For equity-settled share-based payment arrangements, significant judgement is applied in determining the grant date fair value of the equity instruments granted. Depending on the timing of the grant and the availability of observable market prices, this includes an assessment of whether market-based inputs can be used or whether valuation techniques are required. Key assumptions may include expected volatility, expected employee retention and the assessment of vesting conditions.

For cash-settled share-based payment arrangements, management is required to estimate the fair value of the resulting liabilities at each reporting date until settlement. This involves judgement in selecting appropriate valuation methodologies and reassessing relevant inputs, including expected vesting outcomes and employee turnover.

The determination of the vesting period and the related vesting pattern requires judgement. The vesting period represents the period during which all vesting conditions must be satisfied and generally corresponds to the period over which the Group receives the related employee services. The assessment of service and performance conditions, including the distinction between market and non-market conditions, as well as the pattern by which awards vest, may affect the timing and amount of expense recognised.

The Group’s pension plans in Switzerland were previously provided by multiple pension providers. As of 1 January 2026, and following the express consent of the relevant employees, the Group harmonised its pension plans into a single pension fund under the collective foundation La Collective de Prévoyance – Copré (hereinafter referred to as Copré).

This harmonisation resulted in a plan amendment in the fourth quarter of 2025, due to the enhanced insured benefits mainly reflected in a higher conversion rate. The plan still qualifies as a defined benefit plan. In addition, the transition from the pension funds of TX Group AG to Copré will require a partial liquidation. The process was formally initiated with the termination notice.

Copré is a Swiss collective foundation (Sammelstiftung) governed by the provisions of the Swiss Federal Act on Occupational Old Age, Survivors’ and Invalidity Pension Provision (BVG). The uppermost body of Copré is the Assembly of Delegates, which represents the affiliated employers and insured members. The Assembly of Delegates appoints the Board of Trustees, approves the foundation’s statutes and regulations, and exercises overall supervisory authority. The Board of Trustees is responsible for the strategic management of the foundation, ensuring compliance with legal requirements, and overseeing the implementation of pension plans.

The BVG stipulates minimum amounts for the insured salary, retirement credits, and conversion rate for the mandatory BVG pension, and the required return. These statutory requirements and the specific characteristics of the plans meant that the Group is exposed to various risks, including actuarial, investment, interest rate, disability, and longevity risks.

Copré operates under a semi-autonomous structure, that covers biometric risks related to disability and death, while investment and longevity risks remain with the pension plan. As a result, the plan is exposed to fluctuations in investment returns and changes in actuarial assumptions, which may lead to varying contribution requirements or adjustments to the funding level over time.

Employer and employee contributions are generally defined as a percentage of the insured salary. The retirement pension is determined by multiplying the retirement savings capital available at the time of retirement by the conversion rates specified in the regulations. The employee has the option of receiving their retirement benefits as a lump sum. The disability and spouse’s pensions are defined as a percentage of the insured salary.

The Board of Trustees is responsible for restructuring measures in the event of underfunding to restore full funding of future pension benefits within a reasonable timeframe. These measures may include restructuring payments in the form of additional contributions, whereby the employer’s restructuring contributions must be at least equal to the sum of the employee’s restructuring contributions.

The responsibility for managing the foundation’s assets is vested in the Board of Trustees, which approves the investment regulations and their modifications, and sets the strategic allocation of the assets as well as the authorised fluctuation margins. The Board of Trustees ensures that the foundation’s pension-related objectives are met, in particular by adopting a management strategy that takes account of assets and liabilities, as well as the structure and foreseeable future changes in the number of persons insured. Copré maintains an Investment Committee, which supports the Board of Trustees by preparing investment-related decisions, monitoring asset managers, and ensuring adherence to the foundation’s investment policy and risk framework.

The actuarial calculation of the defined benefit obligations and the service cost was carried out by an independent actuary using the projected unit credit method. The fair value of the plan assets is derived from the information available at the date of preparation of the financial statements.

Movement in the net defined benefit liability in the years 2025 and 2024 was as follows:

Following the decision to harmonise and transfer all employees from the previous pension fund providers to Copré, the higher conversion rates offered by Copré increased the defined benefit obligation (DBO). The resulting difference in the DBO of CHF 6,046 thousand is recognised as past service cost in 2025.

The (gain)/loss on settlement results from a significant decrease in the number of insured persons at a group company.

Remeasurement loss/(gains) are derived from the transition from the pension funds of TX Group AG to Copré which will trigger a partial liquidation. In accordance with partial liquidation regulations and based on preliminary estimates, a remeasurement of plan assets is expected, resulting in an anticipated reduction of CHF 5,346 thousand.

The actuarial gain of CHF 1,830 thousand (previous year: loss of CHF 6,187 thousand) resulting from changes in financial assumptions was mainly due to the increase in the discount rate from 1.0% to 1.3% (previous year: decrease from 1.5% to 1.0%).

The amount recognised in the statement of financial position reflects the surplus or deficit of the defined benefit plans (net defined benefit liability or asset). However, any surplus recognised as an asset is restricted to the present value of economic benefit available.

The weighted average duration of the DBO as at 31 December 2025 is 15.9 years (previous year: 15.5 years).

In accordance with the investment regulations, the foundation manages its assets in a way that guarantees security and the spreading of risks. The assets only relate to the pension plan in Switzerland. The plan assets are invested in accordance with the foundation’s investment regulations. These assets are broadly diversified among cash and money market instruments, Swiss and foreign bonds, mortgage loans, alternative investments, private equity, infrastructure, equities, and Swiss and international real estate. There are no direct holdings of the Group’s shares.

For 2026, the Group expects to pay contributions to defined benefit plans in the amount of CHF 4,960 thousand.

The present value of the defined benefit obligations depends on a number of factors that are determined on an actuarial basis. The following underlying assumptions were applied in the actuarial calculations:

Changes in assumptions would impact the present value of the defined benefit obligations as follows:

The sensitivity analyses above were determined using a methodology that extrapolates the effect on the present value of the net defined benefit liability as a result of reasonable changes in key assumptions occurring at the end of the reporting period.

Significant Judgements and Estimates

Any change in actuarial assumptions will affect the carrying amount of the defined benefit obligations. The assumptions used to determine the net pension cost include the discount rate, future salary increases, and longevity risk. The discount rate is based on Swiss franc-denominated corporate bonds with a senior rating issued by domestic and foreign issuers and listed on the market. Future salary increases include expected increases in compensation and salaries, which depend on annual inflation estimates and years of service with the Group. Based on the current financial status of the pension funds, no future increases in pensions are anticipated. Life expectancy is derived from published statistics and mortality tables.

Trade receivables are measured at the transaction price and are subject to impairment using a forward-looking expected credit loss (ECL) model. For more information regarding valuation allowances and credit risks, refer to Note 4.6.

Other receivables and assets mainly consist of IPO-related costs initially borne by the Group and recharged to the Principal Shareholders, as the beneficiaries of the IPO (refer to Note 5.2), along with various other immaterial balances.

In 2025, payables to social insurance companies increased due to additional social security contributions related to the PSP payout in November 2025 (refer to Note 2.2), while the increase in payables to pension funds mainly results from timing effects in the settlement of pension fund contributions at year-end. The rise in payables to public authorities primarily reflects higher VAT liabilities in 2025 driven by the application of platform taxation, under which Ricardo is required to collect and remit VAT on certain transactions on behalf of the seller. 

Other payables mainly comprises mainly IPO-related costs incurred with third parties, such as banks, as well as other immaterial balances.

Other accrued liabilities primarily relates to accrued marketing costs and advertising commissions, as well as accrued third-party settlements and other outstanding invoices at the reporting date.