Other disclosures

Balances and business transactions between PCC SE and incorporated subsidiaries regarded as related parties are eliminated as part of the consolidation process and have not been included in these Notes and disclosures. Details regarding the business transactions between the PCC Group and other related parties are indicated in the following.

Related parties are the sole shareholder and ultimate controlling party of PCC SE, Mr. Waldemar Preussner, as well as key management personnel (members of the Executive Board and Supervisory Board of PCC SE) and their family members. For compensation to Executive Board members and Supervisory Board members, please refer to the disclosures under Note (41) Corporate Bodies. Sundry other receivables include a receivable from the sole shareholder of PCC SE in the amount of € 0.3 million (previous year: € 0.0 million). This receivable is short-term in nature and, as in the previous year, bears interest at 6.0 % p.a.

As of December 31, 2023, the PCC Group had receivables from affiliated companies not included in the consolidated financial statements for reasons of materiality totaling € 6.1 million (previous year: € 4.2 million). These are loans, trade accounts receivable and short-term loans receivable. The intercompany financing arrangements bear interest rates of between 6.5 % p.a. and 10.0 % p.a.

In principle, sales to or purchases from related parties are made at standard market / arm’s length prices. The outstanding items at the end of the fiscal year are not secured, do not bear interest and will be settled in cash. There are no guarantees for receivables from related parties or liabilities to related parties.

As of the reporting date, there were loan receivables from the joint venture OOO DME Aerosol amounting to € 13.9 million (previous year: € 13.6 million). As in the previous year, they bear interest at 10.0 % p.a. The loans were granted for the development and construction of a dimethyl ether plant on the premises of the joint venture partner. In addition, both shareholders granted funds for start-up financing and to cover the initial debt service.

The consolidated financial statements and the management report of the PCC Group are prepared in accordance with currently applicable accounting standards. In addition to the disclosures and ratios required by these standards, the PCC Group uses and publishes alternative performance measures (APMs). These are not subject to the regulations of the accounting standards. The PCC Group determines and uses APMs in order to facilitate comparability of key performance indicators over time and within the international business environment. These performance measures are used both in the assessment of external third parties and also internally for the management and control of business entities.

Determination of these performance measures is by addition, subtraction, multiplication or division of individual or several items in the consolidated balance sheet and the consolidated statement of income. The PCC Group determines the following alternative performance measures:

The method by which gross profit is calculated was changed in fiscal 2023. Please refer to the reconciliation of gross profit as the last APM in this section. All other APMs were applied unchanged from the previous period.

EBIT (Earnings Before Interest / financial result and Taxes) serves as a measure of operating profit without taking into account differing international taxation systems and differing financing structures. The PCC Group ascertains its figures as follows:

EBITDA (Earnings Before Interest / financial result, Taxes and Depreciation) provides an indication of the operating result before financial items and unaffected by differing depreciation and amortization methods and the associated valuation margins. It is determined within the PCC Group as follows:

Return on capital employed (ROCE) is the ratio of EBIT to average capital employed. EBIT is the profit or loss (operating result) before interest / financial result and taxes. Capital employed is calculated from the equity and debt capital employed by the PCC Group at their carrying amounts.

The method by which gross profit is calculated was changed in fiscal 2023. Unlike in previous periods, the item “Other internal costs capitalized” is now reported below gross profit. Gross margin is the ratio of gross profit to sales.

1 Prior-year figure amended. The gross profit of € 503.2 million reported in the consolidated financial statements for fiscal 2022 included other internal costs capitalized amounting to € 12.8 million.

Duisburg, April 29, 2024 PCC SE
The Executive Board

Dr. Peter Wenzel

Ulrike Warneke

Dr. rer. oec. (BY) Alfred Pelzer