9 EMPLOYEE BENEFITS
9.1 NUMBER OF EMPLOYEES
| 2023 | 2024 |
FTE (full-time equivalent) |
|
|
Employees – year-end | 3,591 | 3,265 |
Employees – average | 3,570 | 3,413 |
9.2 PERSONNEL EXPENSES
Personnel expenses include the following:
| Notes | 2023 | 2024 |
CHF 1,000 |
|
|
|
Salaries and wages |
| 264,468 | 238,939 |
Social security |
| 31,434 | 27,471 |
Post-employment benefits relating to |
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|
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Defined contribution plans |
| 4,590 | 4,717 |
Defined benefit plans | 9.3 | 3,811 | 11,741 |
Share-based payment | 9.4 | 14,819 | 4,087 |
Other personnel expenses |
| 13,111 | 16,521 |
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|
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Total personnel expenses |
| 332,233 | 303,476 |
9.3 POST-EMPLOYMENT BENEFITS: DEFINED BENEFIT PLANS
9.3.1 CHARACTERISTICS OF DEFINED BENEFIT PLANS AND RISKS ASSOCIATED WITH THEM
| 31.12.2023 | 31.12.2024 | ||||
| Swiss plans | International plans | Total | Swiss plans | International plans | Total |
Number of plans | 5 | 3 | 8 | 5 | 3 | 8 |
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Actives |
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Number | 732 | 107 | 839 | 707 | 106 | 813 |
Defined benefit obligation (CHF 1,000) | 198,065 | 3,896 | 201,961 | 208,601 | 3,987 | 212,588 |
Weighted average duration in years | 16.8 | 6.0 | 16.8 | 17.5 | 5.4 | 17.3 |
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Retirees |
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Number | 7 | – | 7 | 9 | – | 9 |
Defined benefit obligation (CHF 1,000) | 4,670 | – | 4,670 | 5,069 | – | 5,069 |
Weighted average duration in years | 14.2 | – | 14.2 | 13.8 | – | 13.8 |
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Total |
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Number | 739 | 107 | 846 | 716 | 106 | 822 |
Within the Group, various defined benefit plans exist, which differ in their purpose and financing according to local needs:
Country | Benefits | Funded/ Unfunded | Description and risks |
Switzerland (Swiss plans) | Retirement, death-in-service and disability benefits | Funded | Nature of the benefits provided The pension plans of Tecan Group Ltd., Tecan Schweiz AG, Tecan Sales Switzerland AG and Tecan Trading AG are plans with guaranteed minimum interest credited on the savings and fixed conversion rates at retirement. Disability and death benefits are defined as a percentage of the insured salary.
Regulatory framework (minimum) The plan provides benefits based on the LPP/BVG law, which defines the minimum requirements for the mandatory employer-sponsored pension plans in Switzerland. An annual salary of up to CHF 90’720 (as from January 1, 2024) is required to be insured and funding is age-related, with contribution rates ranging from 7% to 18% as a percentage from insured salary. The conversion rate used to calculate the annuity based on the accumulated savings capital is 6.8% at normal retirement age (65 for men and women).
According to the LPP/BVG law, the plan must be fully funded on a static basis at all times. In the event of underfunding, corrective measures must be taken, such as additional funding by the employer or by the employer and employees, or a reduction in benefits, or a combination of both.
Specific plan rules The retirement savings credits are defined as a percentage of the insured salary. The savings credits for the portion of the annual salary between CHF 26’460 and CHF 90’720 depend on age and range from 8% to 19%. The savings credits for the portion of the annual salary above CHF 90’720 are 14% for the employees and 18%, 19% and 21.8% for the members of the management. The conversion rate used to calculate the annuity based on the total accumulated savings capital is 5.2% at normal retirement age.
The annual disability pension is 70% of the insured salary, the annual partner’s pension is 50% of the insured salary or 60% of the current retirement pension. In the event of death before retirement, an additional lump sum of 200% of the insured salary is paid. |
Country | Benefits | Funded/ Unfunded | Description and risks |
Switzerland (Swiss plans) | Retirement, death-in-service and disability benefits | Funded | Governance of the plan The companies are affiliated to the collective foundation AXA Collective BVG Foundation. The collective foundation is a separate legal entity. The foundation is responsible for the governance of the plan and its board of trustees is composed of an equal number of employer and employee representatives elected by each of the affiliated companies. The foundation has established investment guidelines, particularly the strategic allocation with ranges.
In addition, each affiliated company has a pension committee, which is composed of an equal number of representatives of the company and the employees. The pension committee is responsible for setting the benefits of the plan.
Risks to which the plan exposes the Group The plan provider, AXA Collective BVG Foundation, has reinsured the risks of disability, death and longevity with AXA insurance. The Group is therefore only exposed to the investment risk and the risk that the AXA Collective BVG Foundation may terminate the affiliation contract or increase the premiums.
Plan amendments, settlements or curtailments In 2023 the board of trustees has decided to reduce the conversion rates used to calculate the annuity based on the total accumulated savings capital as from January 1, 2025. This modification is considered a plan amendment. The resulting past service cost of CHF 4.4 million (gain) was immediately recognized in profit or loss. |
Austria (International plans) | Long-service leave benefits | Unfunded | Nature of the benefits provided The severance plan of Tecan Austria GmbH and Tecan Sales Austria GmbH guarantees a one-time lump-sum payment upon termination of employment. The plan was closed to new members on December 31, 2002. Participants in the plan are all employees with at least 3 years of service and entry date prior to January 1, 2003. Membership in the plan is mandatory.
Regulatory framework The plan provides benefits in accordance with Austrian law (AngG 23 and 23a) which provides benefits in the event of retirement, death (50%), disability or termination of employment. Benefits are vested after 3 years of service, while voluntary termination of employment results in the forfeiture of all benefits.
Benefits are based on years of service and range from a lump sum of two months' salary after three years of service to 12 months' salary after 25 years of service. Monthly salary is defined as one twelfth of the total annual salary for the previous 12 months.
Governance of the plan The company (employer) is solely responsible for the governance of the plan.
Risks to which the plan exposes the Group The plan is exposed to inflation risk and salary increase risk. There is no longevity risk as benefits are payable at retirement at the latest.
Plan amendments, settlements or curtailments There were no plan amendments, settlements or curtailments during the financial years 2023 and 2024. |
Other (International plans) | Retirement benefits | Unfunded | Tecan Japan Co., Ltd. and Tecan Italia S.r.l. have two smaller pension plans with a limited number of participants. |
9.3.2 AMOUNTS RECOGNIZED IN THE FINANCIAL STATEMENTS
The amounts recognized in the balance sheet are as follows:
| 31.12.2023 | 31.12.2024 |
CHF 1,000 |
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|
Swiss plans |
|
|
Present value of obligations arising from retirement benefit plans (funded) | 202,735 | 213,670 |
Related fair value of plan assets | (162,648) | (189,290) |
Deficit Swiss plans | 40,087 | 24,380 |
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International plans |
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Present value of obligations arising from retirement benefit plans (unfunded) | 942 | 969 |
Present value of obligations arising from long-service leave benefit plans (unfunded) | 2,954 | 3,018 |
Deficit International plans | 3,896 | 3,987 |
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Total liability for post-employment benefits | 43,983 | 28,367 |
The components of defined benefit cost are as follows:
| 2023 | 2024 | ||||
| Swiss plans | International plans | Total | Swiss plans | International plans | Total |
CHF 1,000 |
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Current service cost | 7,927 | 242 | 8,169 | 11,519 | 222 | 11,741 |
Past service cost (plan amendment) | (4,358) | – | (4,358) | – | – | – |
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Defined benefit cost included in operating profit | 3,569 | 242 | 3,811 | 11,519 | 222 | 11,741 |
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Net interest cost on liability for post-employment benefits | 237 | 121 | 358 | 473 | 129 | 602 |
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Defined benefit cost included in finance cost | 237 | 121 | 358 | 473 | 129 | 602 |
Total defined benefit cost included in profit or loss | 3,806 | 363 | 4,169 | 11,992 | 351 | 12,343 |
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Actuarial (gains)/losses on obligations |
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Changes in demographic assumptions | – | (72) | (72) | – | (11) | (11) |
Changes in financial assumptions | 27,435 | (55) | 27,380 | 10,390 | 44 | 10,434 |
Experience adjustments | (4,727) | 115 | (4,612) | (12,957) | (56) | (13,013) |
Return on plan assets (excluding interest income) | 5,746 | – | 5,746 | (16,787) | – | (16,787) |
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Remeasurement (gains)/losses included in other | 28,454 | (12) | 28,442 | (19,354) | (23) | (19,377) |
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Translation differences included in other comprehensive income | – | (309) | (309) | – | 24 | 24 |
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Total defined benefit cost recognized | 32,260 | 42 | 32,302 | (7,362) | 352 | (7,010) |
The Group expects to contribute CHF 9.8 million to its defined benefit plans in 2025.
Changes in the present value of the defined benefit obligation are as follows:
| 2023 | 2024 | ||||
| Swiss plans | International plans | Total | Swiss plans | International plans | Total |
CHF 1,000 |
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Balance at January 1 | 182,715 | 3,965 | 186,680 | 202,735 | 3,896 | 206,631 |
Current service cost | 7,927 | 242 | 8,169 | 11,519 | 222 | 11,741 |
Past service cost | (4,358) | – | (4,358) | – | – | – |
Employee contributions | 6,065 | – | 6,065 | 6,160 | – | 6,160 |
Insurance premiums | (1,988) | – | (1,988) | (2,176) | – | (2,176) |
Benefits paid | (14,609) | (111) | (14,720) | (4,766) | (261) | (5,027) |
Interest expense | 4,275 | 121 | 4,396 | 2,765 | 129 | 2,894 |
Actuarial (gains)/losses | 22,708 | (12) | 22,696 | (2,567) | (23) | (2,590) |
Translation differences | – | (309) | (309) | – | 24 | 24 |
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Balance at December 31 | 202,735 | 3,896 | 206,631 | 213,670 | 3,987 | 217,657 |
Changes in the fair value of plan assets are as follows:
| 2023 | 2024 | ||||
| Swiss plans | International plans | Total | Swiss plans | International plans | Total |
CHF 1,000 |
|
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|
|
|
|
Balance at January 1 | 166,757 | – | 166,757 | 162,648 | – | 162,648 |
Employer contributions | 8,131 | – | 8,131 | 8,343 | – | 8,343 |
Employee contributions | 6,065 | – | 6,065 | 6,160 | – | 6,160 |
Insurance premiums | (1,988) | – | (1,988) | (2,176) | – | (2,176) |
Benefits paid | (14,609) | – | (14,609) | (4,766) | – | (4,766) |
Interest income | 4,038 | – | 4,038 | 2,294 | – | 2,294 |
Return on plan assets (excluding interest income) | (5,746) | – | (5,746) | 16,787 | – | 16,787 |
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Balance at December 31 | 162,648 | – | 162,648 | 189,290 | – | 189,290 |
The plan assets consist of:
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| 31.12.2023 | 31.12.2024 | ||
CHF 1,000 |
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| ||
Cash | quoted | 1,627 | 1% | 1,893 | 1% |
Equity securities | quoted | 55,300 | 34% | 64,358 | 34% |
Debt securities | quoted | 52,047 | 32% | 68,144 | 36% |
Real estate | quoted | 42,289 | 26% | 49,215 | 26% |
Other | not quoted | 11,385 | 7% | 5,680 | 3% |
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Balance at December 31 |
| 162,648 | 100% | 189,290 | 100% |
9.3.3 ACTUARIAL ASSUMPTIONS AND SENSITIVITY ANALYSIS
Principal actuarial assumptions at the balance sheet date (expressed as weighted averages):
| 31.12.2023 | 31.12.2024 | ||
| Swiss plans | International | Swiss plans | International |
Discount rates | 1.40% | 3.56% | 1.00% | 2.88% |
Rate of future salary increases | 1.75% | 3.56% | 1.75% | 3.14% |
Rate of future pension increases | 0.00% | 0.00% | 0.00% | 0.00% |
Rates for the projection of savings capital1 | 1.00% | n/a | 1.25% | n/a |
Mortality tables2 | BVG2020G | various | BVG2020G | various |
- Swiss plans: the rate is only applied to the mandatory part
- Model 'Continuous Mortality Investigation (CMI)'
SENSITIVITIES OF SIGNIFICANT ACTUARIAL ASSUMPTIONS
The discount rate, the rate of future salary increase and the life expectancy were identified as significant actuarial assumptions. The following impacts on the defined benefit obligation are to be expected:
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| 31.12.2023 | 31.12.2024 | ||||
| Change in actuarial | Swiss plans | International plans | Total | Swiss plans | International plans | Total |
CHF 1,000 |
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Discount rates | - 25 basis points | 5,464 | 54 | 5,518 | 6,582 | 51 | 6,633 |
| + 25 basis points | (5,174) | (53) | (5,227) | (6,224) | (45) | (6,269) |
Rate of future salary increases | - 25 basis points | (1,627) | (50) | (1,677) | (1,919) | (42) | (1,961) |
| + 25 basis points | 1,642 | 49 | 1,691 | 1,932 | 46 | 1,978 |
Life expectancy | - 1 year | (2,678) | (6) | (2,684) | (3,503) | (2) | (3,505) |
| + 1 year | 2,776 | 3 | 2,779 | 3,633 | 4 | 3,637 |
(positive = increase in obligation / negative = decrease in obligation)
The sensitivity analysis is based on realistically possible changes at the end of the reporting period. Each change in significant assumption was analyzed separately as part of the test. Interdependencies were not considered.
9.4 SHARE-BASED PAYMENT: EMPLOYEE PARTICIPATION PLANS
9.4.1 EMPLOYEE SHARE OPTION PLANS
The terms and conditions of the outstanding grants are as follows:
Plan | Plan terms |
| 31.12.2023 | 31.12.2024 | |||||
| Grant date | Expiry date | Number granted | Exercise price |
| Remaining life (years) | Number outstanding | Remaining life (years) | Number outstanding |
Plan 2018 | 02.11.2017 | 02.11.2024 | 22,071 | 212.1 |
| 0.8 | 3,753 | – | – |
Plan 2019 | 02.11.2018 | 02.11.2025 | 23,921 | 228.7 |
| 1.8 | 8,953 | 0.8 | 8,196 |
Plan 2020 | 02.11.2019 | 02.11.2026 | 23,334 | 236.0 |
| 2.8 | 8,871 | 1.8 | 6,879 |
Plan 2021 | 02.11.2020 | 02.11.2027 | 9,056 | 434.2 |
| 3.8 | 6,658 | 2.8 | 6,071 |
Plan 2022 | 02.11.2021 | 02.11.2028 | 7,050 | 571.5 |
| 4.8 | 5,946 | 3.8 | 5,511 |
Plan 2023 | 02.11.2022 | 02.11.2029 | 10,735 | 356.6 |
| 5.8 | 10,565 | 4.8 | 9,724 |
Plan 2024 | 02.11.2023 | 02.11.2030 | 14,313 | 265.8 |
| 6.8 | 14,313 | 5.8 | 13,737 |
Plan 2025 | 02.11.2024 | 02.11.2031 | 19,103 | 220.2 |
| – | – | 6.8 | 19,103 |
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Total |
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| 4.3 | 59,059 | 4.5 | 69,221 |
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Thereof exercisable at December 31 | 35,585 |
| 37,353 | ||||||
All plans are granted to members of the management level 3 and 4 and have a contractual life of 7 years. The vesting conditions are one / two / three years of service for 33%/33%/34% of options. One option grants the right to purchase one Tecan share with settlement by physical delivery (equity-settled). All outstanding options are fully covered by the conditional share capital.
The number and weighted average exercise price of the share options are as follows:
| 2023 | 2024 | ||
| Weighted average exercise price (CHF) | Number | Weighted average exercise price (CHF) | Number |
Balance at January 1 | 319.65 | 56,219 | 318.29 | 59,059 |
Granted | 265.80 | 14,313 | 220.20 | 19,103 |
Exercised | 215.33 | (9,488) | 228.13 | (6,558) |
Forfeited to expired | 470.36 | (1,985) | 377.52 | (2,383) |
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Balance at December 31 | 318.29 | 59,059 | 297.72 | 69,221 |
The weighted average share price at the date of exercise was CHF 366.05 in 2023 and CHF 313.97 in 2024.
The expenses, recognized in profit or loss, are calculated as follows:
The fair value of services received in return for the share options granted is measured by reference to the share options vested multiplied by their fair value at grant date (measurement date). The estimate of the fair value is based on a trinomial model. Changes in the fair value of the option after the grant date do not change the fair value of the services received.
Fair value of share options and key assumptions (not yet vested share option plans):
Grant | Share price | Exercise price | Expected volatility1 | Option life | Expected dividends | Risk-free interest rate | Fair value |
Plan 2022 | CHF 571.50 | CHF 571.50 | 33.48% | 7.0 years | 0.24% | 0.12% | CHF 192.23 |
Plan 2023 | CHF 356.60 | CHF 356.60 | 34.34% | 7.0 years | 0.35% | 1.83% | CHF 134.18 |
Plan 2024 | CHF 265.80 | CHF 265.80 | 36.04% | 7.0 years | 0.82% | 1.47% | CHF 97.58 |
Plan 2025 | CHF 220.20 | CHF 220.20 | 30.80% | 7.0 years | 0.58% | 0.45% | CHF 67.37 |
- Historic volatility with an underlying period that depends on the option life Data source: Financial data supplier
9.4.2 EMPLOYEE SHARE PLANS
9.4.2.1 PERFORMANCE SHARE MATCHING PLANS (PSMP)
The terms and conditions of the outstanding grants are as follows, whereby all shares are delivered physically (equity-settled) and free of charge:
Plan | Employees entitled/grant date | Number of shares granted | Fair value at grant | Vesting period | Vesting conditions |
Performance share matching plan (PSMP) 2022 | |||||
Initial grant | Extended Management Board on March 9, 2022 | 9,210 shares | CHF 366.60 | Immediate vesting1 | None |
Other management on May 2, 2022 | 1,088 shares | CHF 288.60 |
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| |
Matching | Extended Management Board on March 9, 2022 | 23,025 shares (maximum of potential shares granted) | CHF 361.00 | January 1, 2022 to December 31, 2024 | Three years of service and performance |
Other management on May 2, 2022 | 2,721 shares (maximum of potential shares granted) | CHF 283.00 |
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Performance share matching plan (PSMP) 2023 | |||||
Initial grant | Extended Management Board on March 8, 2023 | 9,510 shares | CHF 388.30 | Immediate vesting1 | None |
Other management on May 2, 2023 | 1,190 shares | CHF 380.70 |
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Matching | Extended Management Board on March 8, 2023 | 23,775 shares (maximum of potential shares granted) | CHF 382.50 | January 1, 2023 to December 31, 2025 | Three years of service and performance |
Other management on May 2, 2023 | 2,975 shares (maximum of potential shares granted) | CHF 374.90 |
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Performance share matching plan (PSMP) 2024 | |||||
Initial grant | Extended Management Board on March 6, 2024 | 11,771 shares | CHF 351.00 | Immediate vesting1 | None |
Other management on May 2, 2024 | 1,509 shares | CHF 322.60 |
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| |
Matching | Extended Management Board on March 6, 2024 | 29,428 shares (maximum of potential shares granted) | CHF 345.00 | January 1, 2024 to December 31, 2026 | Three years of service and performance |
Other management on May 2, 2024 | 3,773 shares (maximum of potential shares granted) | CHF 316.60 |
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- Vested shares are blocked until the end of the performance period.
Number of shares outstanding at December 31:
| 2023 | 2024 |
Employee shares |
|
|
Balance at January 1 | 97,304 | 95,040 |
Granted | 37,450 | 46,480 |
Deblocked and available to the participants | (39,262) | (32,435) |
Forfeited | (452) | (2,431) |
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Balance at December 31 | 95,040 | 106,654 |
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Thereof vested and transferred, but blocked until the end of the performance period | 21,114 | 23,980 |
The expenses, recognized in profit or loss, are calculated as follows:
The fair value of services received in return for the shares granted is measured by reference to the shares vested multiplied by their fair value at grant date (measurement date). The fair value at grant represents the market value of one Tecan share adjusted for expected dividend payments during the vesting period. Changes in the fair value of the shares after the grant date do not change the fair value of the services received.
The number of matching shares is determined based on the following formula: number of shares from initial grant that qualify for matching shares, multiplied by the matching share factor. The matching share factor is dependent on the achievement of specific economic profit targets. In any case, the matching share factor will not be lower than 0.0 and not higher than 2.5.
Number of matching shares expected to vest on December 31, 2024:
Plan |
|
| Total base shares1 | Matching share factor applied | Matching shares expected to vest2 |
PSMP 2022 |
|
| 10,104 | 0.0 | 0 |
PSMP 2023 |
|
| 10,261 | 1.25 | 12,826 |
PSMP 2024 |
|
| 12,704 | 2.5 | 31,760 |
- Only shares that qualify for matching shares
- Not adjusted for expected fluctuation
9.4.2.2 OTHER SHARE PLANS
The terms and conditions of the outstanding grants are as follows, whereby all shares are delivered physically (equity-settled) and free of charge:
Plan | Employees entitled/grant date | Number of shares | Fair value at grant | Vesting period | Vesting conditions |
Share plan 2024 – Board of Directors (BoD) | |||||
Annual grant | Board of Directors on April 18, 2024 | 1,208 shares | CHF 318.80 | Graded vesting | One year of service |
9.4.3 TOTAL EXPENSES RECOGNIZED
| 2023 | 2024 |
CHF 1,000 |
|
|
Expenses arising from equity-settled share option plans | 1,266 | 1,259 |
Expenses arising from equity-settled performance share matching plans | 13,182 | 2,437 |
Expenses arising from equity-settled other share plans | 371 | 391 |
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Total expenses recognized, excluding social security costs | 14,819 | 4,087 |
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Corresponding current and deferred income taxes recognized directly in equity | (485) | (354) |
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Total amount reported in consolidated statement of changes in equity | 14,334 | 3,733 |