Balance sheet disclosures

8. Goodwill and impairment losses on assets

Accounting policies: goodwill and impairment losses on assets

Goodwill from business combinations is tested for impairment at least once a year. The goodwill impairment test is usually conducted at segment level on the basis of value in use. The same applies to indefinite-lived intangible assets (especially brand names) and intangible assets not yet available for use (in particular capitalized development costs prior to the start of series production). As part of the impairment test, Group R&D corporate assets are allocated to the individual segments using a specific key.

In the case of other intangible assets and property, plant, and equipment, an impairment test is performed if there are indications of impairment as of the reporting date.

As a rule, value in use is the present value of the expected future cash flows from the asset concerned. If no recoverable amount can be measured for an individual asset, the recoverable amount is determined for the smallest identifiable group of assets that generate cash flows (cash-generating unit) to which the asset belongs. If the recoverable amount is less than the carrying amount, an impairment loss is recognized in profit or loss for the period.

Estimates and management’s judgment: recoverability of noncurrent nonfinancial assets

The impairment testing of nonfinancial assets⁠ ⁠—⁠ ⁠especially goodwill, brand names, capitalized development costs, other intangible assets, and property, plant, and equipment⁠ ⁠—⁠ ⁠and equity-method investments, or investments accounted at cost, require assumptions to be made about future market trends, the future cash flows to be derived on that basis, and the discount rate to be applied.

To derive cash flows, management inputs its mid-range expectations into the planning on the basis of estimates of changes in the development of the economic environment, market volume, market share, and cost and price trends. Assumptions about macroeconomic trends (currency, interest rate, and commodity price trends) and the impact of geopolitical risks on the business model, as well as historical developments, are considered. The detailed planning period is generally five years.

The cash flows are derived from the detailed sales and revenue planning for commercial vehicles, profitability (gross margin) projections for products, and trends in the service business. They also reflect the transition to electric mobility and the associated regulatory timetables (see also Note Effects of climate change). Estimated cash flows after the end of the five-year detailed planning period are based on an annual growth rate of 1% (previous year: 1%) per annum, which also reflects the switch toward electric mobility.

Our planning is based on the assumption that global economic output will grow overall in 2026 at a similar pace to 2025. The further decline in inflation in major economic regions and the resulting continued monetary easing should positively impact consumer spending. We continue to believe that risks will arise from the growing fragmentation of the global economy, protectionist tendencies, turbulence in the financial, energy, and commodity markets, and structural deficits in individual countries. Growth prospects are also being impacted by ongoing geopolitical tensions and conflicts. Risks are posed in particular by the Russia-Ukraine conflict, the tense situation in the Middle East, and increasing uncertainties in connection with the economic policy orientation of the US and the global increase in geoeconomic measures, which could further exacerbate geopolitical tensions. We expect the advanced economies to exhibit a similar pace of growth on average, and the group of emerging markets to grow at a slightly slower pace than in the reporting period.

This macroeconomic environment also results in an increased level of uncertainty affecting the calculation of values in use. Inflation rates declined in many countries during fiscal year 2025, but remained at elevated levels in others. As a result, not all central banks lowered their key interest rates to the same extent, which had a dampening effect on economic growth in some cases. For fiscal years from 2026, we believe that the increases in material and personnel costs will return to levels normally seen in the past, depending on the region. Increases in sales revenue were also projected because of the rise in costs. The current geopolitical risks and their impact on the macroeconomic situation could mean additional challenges for the development of the commercial vehicle markets.

In the commercial vehicle markets relevant to the TRATON GROUP, the Executive Board is anticipating a slight overall market growth in the period from 2026 to 2030, with varying regional trends. We are anticipating a stable commercial vehicle market in the EU27+3 region at the level of the previous years, whereas a slight growth is expected in North America. Market volatility is likely to occur in the years before and after the introduction of new emissions standards in the EU27+3 region and in North America. We are anticipating a slight increase in the South American market in the planning period. More details on expected industry developments and the forecast for fiscal year 2026 can be found in the Report on expected developments in the Combined Management Report.

Based on volume and price effects, we are projecting an increase in sales revenue over the planning period. An expansion in electric mobility is also projected in the Scania Vehicles & Services, MAN Truck & Bus, and VWTB segments in the five-year planning (see also the note on Effects of climate change). The costs from the transition to electric mobility were included in the cash flows. The negative impact of the additional US tariffs imposed under Section 232 has been reflected in International’s cash flows.

At Scania Vehicles & Services, increasing unit sales volumes as well as the expansion of the Vehicle Services business, will also have a positive impact on projected cash flows.

Higher unit sales are positively impacting cash flows at MAN Truck & Bus.

At International Motors, a significant rise in unit sales is expected due to upcoming launches of new products despite the direct impact of additional US tariffs imposed under Section 232 and no more than slight growth in the North American market. The introduction of new products, leveraging the TRATON GROUP’s powerful components and technology organization, and even more effective deployment of one of the largest independent dealer and service networks in the North American market, to which International Motors already has access, are having a positive impact overall on projected cash flows.

As well as entering new markets through increasing internationalization, Volkswagen Truck & Bus is also capitalizing on the growth of the Brazilian market.

Overall, these assumptions led to an expected improvement in operating return on sales (adjusted) up to 2030 across all cash-generating units to which goodwill is allocated.

The planning assumptions are adjusted to reflect the current state of knowledge.

When determining the value in use for the impairment test, the following pretax weighted average cost of capital (WACC) rates are used, modified if necessary to reflect country-specific risks:

The WACC rates are calculated based on the interest rate for risk-free investments, the market risk premium, and the cost of debt. Additionally, specific peer group information on beta factors and the cost of debt are considered. The composition of the peer groups used to determine beta factors is continuously reviewed and adjusted if necessary.

Sensitivity analyses are performed as part of the planning process to factor in uncertainties related to geopolitical and macroeconomic conditions. For example, the growth forecasts for the perpetuity and the discount rates are varied by –/+1.0 percentage points to establish whether this results in impaired noncurrent nonfinancial assets. In addition, the projected cash flows are also tested for sensitivity with regard to potential changes, particularly in light of the uncertainty surrounding the transformation of the commercial vehicle industry towards electric mobility. The sensitivity analyses performed did not indicate any impairment of goodwill and brand names.

Changes in goodwill

The allocation of goodwill to the segments is shown in the following table:

There was no need for impairment losses on our goodwill based on the impairment test we performed. The changes in goodwill are attributable to currency adjustment effects and changes in the basis of consolidation.

9. Intangible assets

Accounting policies: intangible assets

Purchased intangible assets are recognized at cost. Development costs for vehicles and vehicle components are capitalized if the recognition criteria of IAS 38 Intangible Assets are met. For example, the technical feasibility of completing the new product must be demonstrated so that it will result in future economic benefits for the company through use or sale. Capitalized development costs consist of all direct and overhead costs that are directly attributable to the development process. TRATON has developed ONE PDP (Product Development Process), a Group-wide process for implementing product development projects and initiatives. The product development process comprises several phases that focus on specific parts of the project. Each phase begins and ends with a milestone that must be passed based on clearly defined criteria before the project can proceed to the next phase. The start and end of the capitalization of development costs is explicitly linked to the achievement of specific milestones within the ONE PDP.

They are amortized using the straight-line method from the start of use (e.g., start of production) over the expected life of the models or technologies developed.

The amortization periods for intangible assets are broken down as follows:

In addition, macroeconomic and geopolitical uncertainties that affect the decision to implement individual development projects and may lead to impairment losses are also considered when assessing the recoverability of capitalized development costs.

The indefinite useful life of brand names acquired under business combinations generally arises from the continued use and maintenance of a brand. Brand names from business combinations and intangible assets that are not yet available for use (in particular capitalized development costs prior to the start of series production) are also tested for impairment at least once a year in accordance with the principles of goodwill impairment testing (for further information, refer also to Note 8. Goodwill and impairment losses on assets).

Amortization charges and impairment losses in a reporting period are allocated to the corresponding functions in the income statement and are included in particular in cost of sales and distribution expenses.

Estimates and management’s judgment: useful life of intangible assets

Estimates of the useful life of finite-lived intangible assets are based on experience and reviewed regularly. Where estimates are modified, the residual useful life is adjusted and an impairment loss is recognized, if necessary.

For further information, see Note 8. Goodwill and impairment losses on assets.

Changes in intangible assets in the period from January 1 to December 31, 2025

In fiscal year 2025, capitalized development costs of €100 million relating to the termination of a development project for Class 8 battery-electric trucks at International Motors were classified as impaired and recognized in cost of sales.

These had been attributable to Scania Vehicles & Services.

10. Property, plant, and equipment, right-of-use assets under IFRS 16, and lease liabilities

Accounting policies: property, plant, and equipment, right-of-use assets under IFRS 16, and lease liabilities

Items of property, plant, and equipment are measured at cost and reduced by depreciation and, if necessary, impairment losses (for further information, refer also to Note 8. Goodwill and impairment losses on assets.) In addition, macroeconomic and geopolitical uncertainties that affect use of the items and may lead to impairment losses on corresponding items of property, plant, and equipment, are also considered when assessing the recoverability of property, plant, and equipment.

Items of property, plant, and equipment are depreciated using the straight-line method ratably over their estimated useful lives. The useful lives of items of property, plant, and equipment are periodically reassessed and adjusted if necessary. Depreciation and amortization is based primarily on the following useful lives:

The right-of-use assets from contracts in which the TRATON GROUP is a lessee are reported under “Property, plant, and equipment” in the balance sheet and generally depreciated over the term of the lease using the straight-line method.

The lease liability is measured by reference to the outstanding lease payments, discounted using the lessee’s incremental borrowing rate. The lease liability is subsequently measured using the effective interest rate method reflecting the lease payments made. Interest expenses from unwinding the discount on lease liabilities are presented in interest expense in the income statement and in net cash provided by/used in operating activities in the statement of cash flows. In addition, the TRATON GROUP exercises the options under IFRS 16 not to recognize leases for intangible assets and low-value assets, as well as short-term leases, as leases and instead to recognize the corresponding lease payments as expenses in the income statement.

Estimates and management’s judgment: useful lives of property, plant, and equipment, and measurement of right-of-use assets and lease liabilities

Estimates of the useful life of items of property, plant, and equipment are based on experience and reviewed regularly. Where estimates are modified, the residual useful life is adjusted and an impairment loss is recognized, if necessary.

Measurement of right-of-use assets from leases and the associated lease liabilities is based on a best estimate of the exercise of extension and termination options. This estimate is updated in the event of material changes in the operating environment or the contract.

Changes in property, plant, and equipment in the period from January 1 to December 31

Property, plant, and equipment with a carrying amount of €615 million (previous year: €466 million) serves as collateral for loan liabilities.

In fiscal year 2025, property, plant, and equipment of €8 million relating to the termination of a development project for Class 8 battery-electric trucks at International Motors was classified as impaired and recognized in cost of sales.

Right-of-use assets from leases reported in property, plant, and equipment changed as follows:

On a gross basis (before discounting), the maturity structure of the lease liabilities reported in financial liabilities is as follows:

Overall, there was a cash outflow of €414 million (previous year: €389 million) from lessee relationships in the fiscal year, of which €292 million (previous year: €276 million) was attributable to the repayment of lease liabilities within net cash used in financing activities and €122 million (previous year: €113 million) to net cash used in operating activities. The cash flow from operating activities includes leasing expenses for low-value assets and short-term leases, expenses for variable lease payments not included in the measurement of lease liabilities, and interest expenses from unwinding discounted lease liabilities.

Potential future cash outflows that were not included in the measurement of lease liabilities mainly consist of extension options amounting to €720 million (previous year: €682 million).

11. Assets leased out

Accounting policies: assets leased out

The “Assets leased out” line item reports assets for which the TRATON GROUP is the lessor. These include in particular vehicles and real estate marketed in the context of short-term rentals or operating leases, as well as vehicles that continue to be attributable to the TRATON GROUP as a result of buyback agreements. The underlying asset is measured at amortized cost, recognized in the TRATON GROUP’s assets leased out, and depreciated to the calculated residual value over the estimated useful life or term of the agreement using the straight-line method. The useful lives underlying depreciation generally correspond to those of items of property, plant, and equipment used by the entity. Changes to the calculated residual value are taken into account by adjusting the future depreciation rates. Impairment losses identified as a result of an impairment test in accordance with IAS 36 Impairment of Assets are recognized. The lease payments received in the period are recognized as income in the income statement on a straight-line or other systematic basis. Depreciation and impairment losses are included in functional expenses. Further information on accounting for operating leases is contained in Note 1. Sales revenue.

As a general rule, the stated fair value of investment property is calculated using an income capitalization approach based on internal data, using internal calculations, or by external experts (Level 3 of the fair value hierarchy).

Estimates and management’s judgment: recoverability of assets leased out

The recoverability of the Group’s assets leased out depends in particular on the residual value of vehicles leased out after the end of the lease term, since this constitutes a significant portion of the expected cash flows, as well as on the current market situation, which is continuously monitored. Forecasting residual values requires management to make assumptions about the future supply of and demand for vehicles, as well as vehicle price trends. These assumptions are based either on qualified estimates or on information published by expert third parties. Where available, qualified estimates are based on external data and also reflect additional information available internally, such as values derived from past experience and current sales data.

Changes in assets leased out in the period from January 1 to December 31

Since new business more than compensates for expiring contracts, a year-on-year increase was recorded in vehicles leased out. This reflects the higher share of business with buyback agreements in total unit sales.

The “Investment property” item contains land and buildings held for rental or capital appreciation with a fair value of €78 million (previous year: €96 million). Lease income from investment property amounted to €7 million (previous year: €4 million) in the reporting period.

Additional information on operating leases

The following payments are expected in the years shown from outstanding undiscounted lease payments arising from operating leases:

1 Prior-year period adjusted

Income from operating leases came to €1,563 million (previous year: €1,550 million).

12. Equity-method investments

Accounting policies: equity-method investments

Equity-method investments include associates and joint ventures. Associates and joint ventures are initially measured at cost. In subsequent periods, the TRATON GROUP’s share of earnings generated after acquisition is recognized in the income statement. Effects from the increase in the share of the equity (for example capital increases) of entities in which the TRATON GROUP does not participate, or only has a disproportionately low participation, are also recognized in the share of earnings of equity-method investments in the income statement. If an additional interest is acquired in an investment already accounted for using the equity method, and if this does not change the significant influence, the additional interest is measured at cost; the interest already held is not remeasured. Other changes in the equity of associates and joint ventures, such as currency translation differences, are recognized in other comprehensive income.

If there are indications that the carrying amount may be impaired, equity-method investments are tested for impairment; any impairment loss is recognized in the income statement (see Note 8. Goodwill and impairment losses on assets.) If the reason for impairment ceases to exist at a later date, the impairment loss is reversed to the carrying amount that would have been determined had no impairment loss been recognized.

Goodwill arising from the acquisition of an associate or a joint venture is included in the carrying amounts of investments in associates or joint ventures.

Sinotruk

The associate, Sinotruk (Hong Kong) Limited, Hong Kong, China (Sinotruk) is one of the largest truck manufacturers in the Chinese market. Sinotruk’s principal place of business is in Hong Kong, China. Due to the application of the equity method, taking into account local capital market regulations relating to the disclosure of financial information for the investee, a reporting period that differs from the TRATON GROUP’s fiscal year is used to account for Sinotruk.

The market price of the Sinotruk shares held by TRATON was €2,085 million (previous year: €1,947 million) as of December 31, 2025.

Summarized financial information for Sinotruk (on a 100% basis and thus not adjusted for the equity interest held by TRATON) and a reconciliation to the carrying amounts are presented in the following tables:

Statement of Comprehensive Income

1 Amounts shown relate to the period from July 1 of the previous year to June 30 of the year in question.

2 Dividends net of withholding tax

Balance Sheet

1 Amounts shown relate to the reporting period ended June 30 of the year in question.

Rheinmetall MAN Military Vehicles GmbH (RMMV)

The associate, Rheinmetall MAN Military Vehicles GmbH (RMMV), headquartered in Munich, develops, manufactures, and sells logistics wheeled vehicles for military use. The TRATON GROUP holds a 49% equity interest, which is reported in the MAN Truck & Bus segment. Due to the application of the equity method, taking into account local capital market regulations relating to the disclosure of financial information, a reporting period that differs from the TRATON GROUP’s fiscal year by three months is used to account for this company.

Summarized financial information for RMMV (on a 100% basis and thus not adjusted for the equity interest held by TRATON) and a reconciliation to the carrying amounts are presented in the following tables:

Statement of Comprehensive Income

1 Amounts shown relate to the period from October 1 of the previous year to September 30 of the year in question.

Balance Sheet

1 Amounts shown relate to the reporting period ended September 30 of the year in question.

Summarized financial information on individually immaterial associates of the TRATON GROUP based on its proportionate interest

The carrying amounts of other associates amounted to €99 million (previous year: €96 million) as of December 31, 2025. The following table contains summarized financial information on the other associates; the disclosures relate to the Group’s share of the associates in all cases:

Summarized financial information on individually immaterial joint ventures of the TRATON GROUP based on its proportionate interest

The carrying amounts of the joint ventures were €153 million (previous year: €141 million) as of December 31, 2025. The following table contains summarized financial information on the joint ventures; the disclosures relate to the Group’s share of the joint ventures in all cases:

13. Other equity investments

Accounting policies: other equity investments

Other equity investments include shares in unconsolidated immaterial subsidiaries, associates and joint ventures not accounted for using the equity method due to insignificance, and financial investments. The TRATON GROUP has exercised the option under IFRS 9 Financial Instruments to recognize investments in equity instruments that are not held for trading and are measured under IFRS 9 at fair value through other comprehensive income (no recycling) because recognition of gains and losses on these instruments at fair value through profit or loss would not provide any information about the entity’s performance for the TRATON GROUP. When an investment in equity instruments is sold or disposed of, the effect of the fair value measurement recognized in other comprehensive income is reclassified from equity to retained earnings.

Other equity investments

For more information on the calculation of the fair value, see Note 28. Significance of financial instruments for net assets, financial position, and results of operations, section Recognition, derecognition, and classification of financial instruments.

14. Financial services receivables

Accounting policies: financial services receivables

The TRATON Financial Services segment offers a wide range of financing solutions, normally with maturities of between three and five years, in which the vehicles serve as collateral. The type of financing solution offered often depends on market conditions as well as civil and tax law rules in the country concerned.

Customer finance receivables primarily comprise loans granted to direct customers. Dealer finance receivables mainly include working capital loans to dealers. The loans are collateralized by the underlying vehicles or other liens.

In addition, the TRATON Financial Services segment acts as a lessor in the finance leasing business for commercial vehicles manufactured entirely by the TRATON Operations business area and for vehicles for which only the chassis were manufactured by the TRATON Operations business area. The resulting finance lease receivables are recognized at the commencement date at the amount of the net investment in the lease. The lease payments received in the reporting period subsequently reduce the principal and the unearned finance income. Credit risk from lease receivables is accounted for in accordance with IFRS 9. Further information on accounting for finance leases can be found in Note 1. Sales revenue.

Some companies in the TRATON GROUP sell revolving current trade receivables as well as contractually agreed cash flows from leases. Further sales are agreed in specific cases. Asset-backed securities transactions are also carried out in the TRATON Financial Services segment, in which future cash flows from financial services receivables are assigned to structured entities, which then securitize them. If substantially all the risks and rewards of ownership remain with the TRATON Financial Services segment, the financial asset is not derecognized. Instead, a financial liability is recognized in the case of asset-backed securities transactions or, in all other cases, other financial liabilities are recognized in the amount of the consideration received. For further information, see Note 22. Other financial liabilities.

For further information on the recognition and measurement principles applicable to financial services receivables and on accounting for credit risk from lease receivables, refer to Notes 28. Significance of financial instruments for net assets, financial position, and results of operations and 29. Nature and extent of risks arising from financial instruments.

Estimates and management’s judgment: measurement of expected credit losses

The TRATON GROUP is exposed to risks from contractual payments. In all major respects, the Group has the right to recover the vehicles underlying the contracts as collateral. The Group has an exposure to loss if the fair value of the collateral does not fully cover the risk exposure to the customer and the customer is unable to fulfill its contractual payment obligations. If possible, the estimates of this loss exposure are derived from past experience, taking into account current market data and rating classes, as well as scoring information.

Financial services receivables

The €723 million increase in financial services receivables compared with the previous year is mainly attributable to a €949 million increase in customer financing receivables. This was partially offset by a €226 million decrease in dealer finance receivables. The increase in receivables from customer financing is primarily attributable to higher portfolio volumes in the Brazilian market following the acquisition of the VWTB financial services business effective June 30, 2025 (see Note Acquisitions), as well as the expansion of the financing business in the TRATON Financial Services segment for International. The year-on-year decline in dealer finance receivables is mainly a result of the nonrecurrence of the advance sales in Mexico pulled forward in the previous year in response to the introduction of a new emissions standard that took effect in 2025.

The increase in finance lease receivables is primarily attributable to the increased portfolio volume in many markets. After acquiring the rights to the future MAN Financial Services business in several countries in the previous year, the acquisition was fully completed in the first half of 2025. With the start of business activities in the new markets at the end of 2024 and during the entire fiscal year 2025, this led to a significant increase in finance lease receivables.

Reconciliation of lease payments from finance leases

1 Prior-year figures adjusted

Interest income from the net investment in the leases amounted to €473 million (previous year: €401 million) and is reported in sales revenue. Finance leases resulted in a disposal gain of €679 million (previous year: €544 million) in the fiscal year under review. The increase is mainly attributable to higher volumes resulting from the activities of MAN Financial Services in several markets.

The following payments are expected in the years shown from expected outstanding undiscounted lease payments arising from finance leases:

1 Prior-year figures adjusted

As of the reporting date, asset-backed securities transactions implemented to refinance the TRATON Financial Services segment are included in receivables at a carrying amount of €3,515 million (previous year: €2,418 million). The carrying amount of corresponding financial liabilities is €2,816 million (previous year: €1,813 million). The expected payments were assigned to structured entities during the transaction, and collateral with a total amount of €3,515 million (previous year: €2,418 million) was provided. The asset-backed securities transactions did not result in the receivables being derecognized, as the TRATON GROUP retains nonpayment and late payment risks. In certain cases, it is also able to retransfer receivables from the asset-backed securities structure. The difference between the amount of financial services receivables and the associated liabilities is the result of different terms and conditions within the structures, including overcollateralization.

Under certain conditions, parts of the asset-backed securities transactions implemented may be repaid early (clean-up call). In cases where receivables from the asset-backed securities structure are transferred back to the TRATON Financial Services segment, the receivables can be assigned a second time or used as collateral in any other way. The claims by bondholders and financing banks are limited to the assigned receivables, and the cash inflows arising from these receivables are intended for the settlement of the corresponding liability. As of December 31, 2025, the fair value of the assigned receivables that continue to be recognized in the balance sheet was €3,515 million (previous year €2,418 million). The fair value of the associated liabilities amounted to €2,816 million (previous year: €1,813 million) as of that date. The resulting net position is €700 million (previous year: €605 million).

15. Other financial assets

Other financial assets include positive fair values of derivative financial instruments, primarily for hedging interest rate and currency risks. Further information on derivatives as a whole can be found in Notes 28. Significance of financial instruments for net assets, financial position, and results of operations and 29. Nature and extent of risks arising from financial instruments.

Restricted cash is mainly used as collateral in asset-backed securities transactions. In the previous year, restricted cash included €41 million for the gradual acquisition of key aspects of the global financial services businesses of MAN and VWTB (see Note Acquisitions).

The decrease in loan receivables is mainly due to the repayment of a €33 million loan receivable from Banco Volkswagen S.A., São Paulo, Brazil.

Miscellaneous financial assets include receivables from customers who purchased parts from dealers using a credit card program, claims for refunds, receivables from insurance management, and warranty credits.

As of December 31, 2025, other financial assets contained related party receivables of €106 million (previous year: €170 million). Of this amount, €7 million (previous year: €84 million) is attributable to receivables from loans. In both cases, the decline is attributable to the fact that Northvolt AB, Stockholm, Sweden (Northvolt) is no longer classified as a related party (for further information, see Note 34. Related party disclosures).

16. Other receivables

Miscellaneous receivables include prepaid expenses in the amount of €535 million (previous year: €471 million), of which €462 million (previous year: €401 million) is current. Sales with a right of return account for a further €74 million (previous year: €66 million), mainly from sold vehicles for which TRATON will repurchase certain parts at a later date for reconditioning. These are almost all current.

Moreover, miscellaneous long-term receivables contain assets to finance pension obligations in the amount of €54 million (previous year: €50 million).

As of December 31, 2025, other receivables contained related party balances of €34 million (previous year: €78 million).

17. Inventories

Accounting policies: inventories

Inventories are measured at the lower of cost and net realizable value. Production cost comprises directly attributable production costs, nonrefundable tariffs, and proportionate fixed and variable production overheads. Overheads are allocated on the basis of normal capacity of the production facilities. Borrowing costs are not capitalized. Distribution expenses and general and administrative expenses are not included in production cost. Net realizable value corresponds to the estimated selling price less the estimated costs of completion and the estimated costs to sell. Current international tariff developments are taken into account, especially when assessing the estimated selling price.

As a general principle, similar items of inventories are measured using the weighted average method or the FIFO method.

In the year under review, inventories of €32,055 million (previous year: €34,111 million) were recognized in cost of sales at the same time as the sales revenue. Valuation allowances recognized as expenses in the fiscal year under review amounted to €76 million (previous year: €124 million).

18. Trade receivables

Accounting policies: trade receivables

Trade receivables are initially recognized at the transaction price.

Some companies in the TRATON GROUP sell revolving short-term trade receivables; for further information, see Note 14. Financial services receivables, and receivables sold to companies in the Volkswagen Group (nonrecourse factoring), see Note 34. Related party disclosures. For further information on the measurement principles applicable to trade receivables, refer to Note 28. Significance of financial instruments for net assets, financial position, and results of operations.

Trade receivables

19. Cash and cash equivalents

Accounting policies: cash and cash equivalents

Cash and cash equivalents include bank balances and highly liquid financial investments of a temporary nature that are exposed to no more than minor risks of fluctuation in value.

The TRATON GROUP’s financial management manages cash pool structures at brand level, wherever legally and economically appropriate and feasible. The TRATON segments manage operational cash themselves. Excess cash in the TRATON segments is usually managed at TRATON SE level. Cash pool receivables from affiliated companies are reported in cash and cash equivalents.

The TRATON GROUP deposits a portion of its excess cash with affiliated companies of the Volkswagen Group under interest rates in keeping with standard market conditions. Demand deposits are reported in cash and cash equivalents. By contrast, deposits classified as investments are recognized as marketable securities and investment deposits (current) or as other financial assets (noncurrent). Correspondingly, loans and short-term borrowings are recognized as financial liabilities. Deposits with globally positioned banks are also a standard practice.

For further information on the measurement principles, refer to Note 28. Significance of financial instruments for net assets, financial position, and results of operations.

Cash and cash equivalents

20. Equity

Subscribed capital (share capital)

The subscribed capital (share capital) of TRATON SE amounts to €500,000,000 and is composed of 500,000,000 no-par value bearer shares with a notional value of €1.00 each.

All shares are fully paid up and have the same dividend rights. Under Article 6 (2) sentence 1 of the Articles of Association, shareholders may not claim delivery of physical share certificates.

Authorized capital

In accordance with Article 5 (3) of the Articles of Association, the Executive Board is authorized to increase the company’s share capital on one or several occasions by a total of up to €200,000,000 by issuing up to 200,000,000 no-par value bearer shares on a cash and/or noncash basis on or before May 31, 2028, subject to the Supervisory Board’s approval (Authorized Capital 2023). The dividend entitlement of new shares can be determined contrary to the provisions of section 60 (2) of the AktG.

Shareholders must be granted preemptive rights unless the Executive Board makes use of one of the following authorizations to disapply preemptive rights, with the consent of the Supervisory Board. The new shares may also be underwritten by a credit institution or an entity operating pursuant to section 53 (1) sentence 1 of the Kreditwesengesetz (KWG⁠ ⁠—⁠ ⁠German Banking Act) or section 53b (1) sentence 1 or (7) of the KWG (financial institution) to be designated by the Executive Board, or by a consortium of such credit or financial institutions, with the obligation to offer them for sale to shareholders of the company. The Executive Board is authorized, with the consent of the Supervisory Board, to disapply shareholders’ preemptive rights in the following cases:

1. To settle fractions resulting from a capital increase
2. To the extent necessary to grant holders or creditors of convertible loan agreements or bonds with warrants, as well as convertible profit participation rights, issued by the company and/or its direct or indirect majority investees a preemptive right to new shares in the amount to which they would be entitled following the exercise of their options or conversion rights or after meeting their exercise of option or conversion obligations
3. If the new shares are issued against cash contributions and the issue price of the new shares is not materially lower than the quoted market price of existing listed shares of the company at the date when the issue price is finally determined, which should be as close as possible to the placement of the shares. However, this authorization to disapply preemptive rights applies only to the extent that the notional amount of the share capital attributable to the shares issued with preemptive rights disapplied in accordance with section 186 (3) sentence 4 of the AktG does not exceed a total of 10% of the share capital, meaning neither the share capital existing when this authorization takes effect, nor the share capital existing at the date when this authorization is exercised. Shares that (i) are sold or issued, with preemptive rights disapplied, during the term of this authorization up to the date of its exercise on the basis of other authorizations in direct application, or application with the necessary modifications, of section 186 (3) sentence 4 of the AktG, or (ii) shares that were issued or will be issued, with preemptive rights disapplied, to settle bonds or profit participation rights with conversion or exercise rights or obligations will be counted toward this limit, to the extent that the bonds or profit participation rights were issued during the term of this authorization up to the date of its exercise, in application, with the necessary modifications, of section 186 (3) sentence 4 of the AktG.
4. To the extent that the capital increase is implemented to grant shares against noncash contributions, in particular for the purposes of acquiring companies, parts of companies, or investments in companies, or other assets

The Executive Board is also authorized to define further details of the capital increase and its implementation, with the consent of the Supervisory Board. The Supervisory Board is authorized to amend the wording of Article 5 of the Articles of Association following the complete or partial implementation of the capital increase from Authorized Capital 2023 or after the expiration of the authorization period, in line with the scope of the capital increase.

Contingent capital

Additionally, under Article 5 (4) of the company’s Articles of Association, the company’s share capital may also be increased by up to €50,000,000 on a contingent basis through the issue of up to 50,000,000 bearer shares (no-par value shares) (Contingent Capital 2023). The sole purpose of Contingent Capital 2023 is to issue new shares to the holders/creditors of bonds which are issued by the Company or by other companies in which the company directly or indirectly holds a majority interest up to May 31, 2028, in accordance with a resolution passed by the shareholders under item 10.2 of the agenda for the meeting of June 1, 2023, in the event that conversion and/or option rights are exercised or conversion or option exercise obligations are settled or the company makes use of its right to grant shares in the company, either in full or in part, in lieu of payment of the respective cash amount. The shares are issued at the conversion or option price to be determined in accordance with the aforementioned resolution. The contingent capital increase will only be implemented to the extent that conversion rights or options are exercised or conversion or option exercise obligations are settled, or the company exercises its right to grant shares of the company, either in full or in part, in lieu of payment of the cash amount due, and to the extent that other instruments are not used to settle the conversion rights or options.

The new shares carry dividend rights from the beginning of the fiscal year in which they are issued. To the extent permitted by law, the Executive Board may, with the consent of the Supervisory Board, determine the dividend rights in derogation of the above and of section 60 (2) of the AktG, including for a fiscal year that has already closed.

The Executive Board is authorized to define further details of the implementation of the contingent capital increase, with the consent of the Supervisory Board.

Capital reserves

TRATON SE’s capital reserves of €12,195 million (previous year: €12,495 million) constitute the contributions by Volkswagen AG to TRATON SE, in particular from the contribution of MAN SE and Scania AB.

The entire capital reserves of €12,195 million are distributable capital reserves within the meaning of section 272 (2) no. 4 of the Handelsgesetzbuch (HGB ― German Commercial Code). €300 million (previous year: €800 million) was released in the reporting period and transferred to retained earnings.

Retained earnings and accumulated other comprehensive income

The retained earnings of €9,054 million (previous year: €8,135 million) reported as of December 31, 2025, constitute amounts recognized as earnings after tax in prior periods. They also contain the difference between the value of MAN SE shares at the date of their contribution to TRATON SE and the recognized carrying amount of the corresponding assets and liabilities. In addition, the effects of business combinations under common control are recognized in retained earnings; for further information, see Note Acquisitions. TRATON SE paid its shareholders a dividend of €1.70 (previous year: €1.50) per share in 2025. This resulted in a total payout of €850 million (previous year: €750 million).

As of December 31, 2025, the accumulated other comprehensive income of €–3,115 million (previous year: €–3,293 million) contains the accumulated amounts of transactions recognized in other comprehensive income, in particular currency translation differences, the measurement of equity investments, and differences from pension plan remeasurements. Further information can be found in the Statement of Comprehensive Income.

For fiscal year 2025, TRATON SE’s Executive and Supervisory Boards are proposing to the Annual General Meeting to be held on June 16, 2026, to pay a dividend of €0.93 (previous year: €1.70) per share. This proposal corresponds to a total distribution of €465 million (previous year: €850 million).

21. Financial liabilities

The details of noncurrent and current financial liabilities are presented in the following table:

Financial liabilities from bonds mainly relate to European Medium Term Notes (EMTNs).

The TRATON GROUP has a European Medium Term Notes program (EMTN program), whose issuance facility was increased from €12,000 million to €18,000 million on March 24, 2025. TRATON Finance Luxembourg S.A., Strassen, Luxembourg, (TRATON Finance) is using the issuance program to raise capital for general corporate purposes, and the capital raised will be used as needed within the TRATON GROUP. Under the program, TRATON Finance issued bonds totaling €3,761 million (previous year: €3,973 million) in 2025 and made repayments of €3,059 million (previous year: €1,499 million). Liabilities with a carrying amount of €11,503 million (previous year: €10,686 million) were reported under this EMTN program as of December 31, 2025. These were partly hedged using interest rate derivatives.

Scania has a €5,000 million EMTN program in place. Liabilities with a carrying amount of €289 million (previous year: €1,574 million) were reported under this program as of December 31, 2025. No bonds were issued, as in the previous year, and bonds of €1,310 million (previous year: €692 million) were repaid in the reporting period.

Companies in the TRATON Financial Services segment use various bonds from asset-backed securities transactions for their financing, of which a total of €1,195 million (previous year: €1,094 million) was issued in the reporting year and, in turn, €302 million (previous year: €291 million) was repaid.

In addition to the bonds, asset-backed securities liabilities are also included in the line item “Liabilities to banks.” For information on the derecognition of financial assets, refer to Note 14. Financial services receivables.

TRATON launched a €2,500 million commercial paper program on September 12, 2023, of which liabilities with a carrying amount of €1,220 million (previous year: €188 million) were disclosed by TRATON Finance as of the reporting date. Of this amount, €1,182 million (previous year: €27 million) was issued, while €150 million (previous year: €829 million) was repaid.

Within its liabilities to banks, TRATON SE entered into a bilateral loan agreement with the European Investment Bank (EIB) on December 2, 2025, for up to €500 million to finance the costs of the TRATON Modular System (TMS) project in the years 2025 to 2027. The entire loan amount was disbursed on December 19, 2025, with a term of five years.

Loan liabilities to Volkswagen AG amounting to €693 million (previous year: €104 million) were repaid in the reporting period, whereas an additional long-term loan liability of €250 million was incurred in the previous year. Financial liabilities to Volkswagen Group of America Finance, LLC, Reston, USA, increased by €551 million (previous year: €383 million) due to the assumption of long-term loan liabilities and the drawdown of a €249 million short-term credit line, which had been repaid in the previous year in the amount of €263 million.

For information on the measurement principles, refer to Note 28. Significance of financial instruments for net assets, financial position, and results of operations.

22. Other financial liabilities

The liabilities from buyback obligations originate from sales of commercial vehicles accounted for as operating leases because of a buyback agreement. For further information on the accounting policies, see Note 11. Assets leased out.

Other financial liabilities include negative fair values of derivative financial instruments for hedging interest rate and currency risks. These instruments, which are mainly used to hedge currency risk in customer orders and net liquidity, are matched by offsetting gains and losses of the underlyings. Further information on derivatives as a whole can be found in Notes 28. Significance of financial instruments for net assets, financial position, and results of operations and 29. Nature and extent of risks arising from financial instruments.

In some cases, the contractual rights to cash flows from leases are transferred to an external bank. The carrying amount of the lease assets that have been transferred but not derecognized was €37 million (previous year: €50 million) as of the reporting date. The assets did not qualify for derecognition due to a general recourse clause. The corresponding other financial liability had a carrying amount of €44 million (previous year: €64 million) as of the reporting date. The difference between the amount of assets and liabilities is mainly the result of the asset capturing only the portion currently resulting from operating leases, whereas the liability includes the discounted present value of all future cash flows that have been transferred. As of the reporting date, the fair value of the transferred but not derecognized assets amounted to €37 million (previous year: €50 million), the fair value of the corresponding liability amounted to €44 million (previous year: €64 million), and the net position thus equaled €–7 million (previous year: €–14 million). For information on the accounting policies in connection with derecognition of financial assets, refer to Note 14. Financial services receivables.

23. Other liabilities

The following table explains the change in contract liabilities in the reporting period:

24. Provisions for pensions and other post-employment benefits

Accounting policies: provisions for pensions and other post-employment benefits

Obligations for post-employment benefits under defined benefit plans are determined by independent actuaries using the projected unit credit method in accordance with IAS 19 Employee Benefits. Under this method, the future obligations (“defined benefit obligation”) are measured on the basis of the proportionate benefit entitlements acquired as of the balance-sheet date, discounted to their present value, and reduced by the fair value of the plan assets available to cover the pension obligations. Measurement takes into account both the pensions and vested benefits known at the balance sheet date and actuarial assumptions for discount rates, salary and pension trends, staff turnover rates, life expectancy, and increases in healthcare costs, which are calculated for the Group companies depending on their economic environment.

The service cost, which represents the entitlements of active employees accruing in the fiscal year in accordance with the plan, is reported in functional expenses. Net interest income or expense is calculated by applying the discount rate to the net asset value or liability and is included in interest expense.

Remeasurements of the net asset or liability comprise actuarial gains and losses resulting from differences between the actuarial assumptions made and what has actually occurred, and changes in actuarial assumptions, as well as the return on plan assets, excluding amounts included in net interest income or expenses. Remeasurements are recognized in other comprehensive income, net of deferred taxes, in the period in which they arise. The remeasurements from pension plans recognized in other comprehensive income also include the relevant currency translation differences.

Estimates and management’s judgment: provisions for pensions and other post-employment benefits

Measurement of the pension provisions was based on the following actuarial assumptions:

These amounts are averages that were weighted using the present value of the defined benefit obligation. With regard to life expectancy, the most recent mortality tables in each country are used. For Germany, the RT2018G mortality tables developed by Prof. Klaus Heubeck are used for MAN Truck & Bus companies and TRATON Holding starting this fiscal year, as, according to an updated assessment, they better reflect mortality in the TRATON GROUP than the 2005 G mortality tables by Prof. Klaus Heubeck previously used, which were adjusted in 2017 to reflect MAN-specific empirical values. The update of the mortality tables had no significant effect. For the US retirement plans, the mortality rates from standard mortality tables published by the Society of Actuaries are used and adjusted for plan experience if necessary. A study is conducted every five years, most recently in 2025, to determine the best estimate of current mortality levels. In Sweden, the DUS2023 standard mortality tables are applied. As a general principle, the discount rates are defined to reflect the yields on highly-rated (AA) corporate bonds with matching maturities and currencies. The payroll trends cover expected wage and salary trends, which also include increases due to career development. The pension trends either reflect the contractually defined guaranteed pension adjustments or are based on the rules for pension adjustments in force in each country. The staff turnover rates are based on past experience and future expectations.

Depending on the situation in specific countries, the TRATON GROUP grants its employees pension benefits in the form of defined benefit or defined contribution pension plans.

Defined contribution plans in the TRATON GROUP

Under defined contribution plans, contributions are paid to public or private pension providers on the basis of legislative or contractual requirements. There are no benefit obligations over and above the payment of contributions. Current contribution payments are recognized as an expense in the period in which they are incurred; in the TRATON GROUP, they amounted to a total of €472 million (previous year: €451 million) in 2025. Thereof €127 million (previous year: €127 million) was paid for contributions to the statutory pension insurance system in Germany. Additionally, these primarily relate to defined contribution pension plans in Sweden and the USA and to defined benefit multi-employer pension plans that are accounted for as defined contribution pension plans.

Multi-employer plans in the TRATON GROUP

In the TRATON GROUP, there are multi-employer pension plans in the United Kingdom, Sweden, and the Netherlands (see the Plans in Sweden and Plans in other countries sections). The majority of these plans are defined benefit plans. A small proportion of these multi-employer pension plans are accounted for as defined contribution plans because the TRATON GROUP is unable to obtain the information required to account for them as defined benefit plans. Under the terms of the multi-employer plans, the TRATON GROUP only has a very limited liability for the obligations of the other employers.

Defined benefit plans in the TRATON GROUP

Most of the pension entitlements in the TRATON GROUP are classified as defined benefit plans under IAS 19, which are funded by external plan assets to a considerable extent. The pension plans are exposed to interest rate, market, and longevity risks, which are regularly monitored and assessed.

Due to their similarity to pensions, the obligations in particular of the US, Canadian, and Brazilian Group companies for their employees’ post-retirement healthcare benefits (Other post-employment benefits plans, OPEB) are also reported in provisions for pensions and other post-employment benefits. The expected long-term trend in healthcare costs is taken into account for these post-employment benefits. The associated present value of the obligation amounted to €400 million (previous year: €535 million) as of December 31, 2025. The decrease is primarily due to lower projected costs related to the OPEB plans in the USA, which are attributable to insurance contracts with favorable terms and higher projected government funding.

The significant pension plans are described in the following.

Plans in Sweden

The plans in Sweden primarily comprise post-employment benefit plans for Scania employees that offer benefits in the form of retirement pensions, early retirement pensions, surviving dependents’ pensions, and severance payments. As part of the merger of significant parts of the research and development departments within the TRATON GROUP, some of these plans were transferred to the Swedish Group R&D company.

Employees born before 1979 are covered by the joint defined benefit ITP2 pension plan, which is funded by recognized provisions and, since 2019, also partly by plan assets, and is secured by credit insurance taken out with Försäkringsbolaget PRI Pensionsgaranti, a mutual insurance company that also administers the plan. External funding of plan assets uses a foundation (Pensionsstiftelsen). The fair value of plan assets was €375 million (previous year: €331 million) as of December 31, 2025. Another part of ITP2 is secured by contributions to Alecta, a pensions insurer, and is accounted for as a defined contribution plan (see the Multi-employer plans in the TRATON GROUP section).

In addition to these obligations, there is also a defined benefit obligation for employees entitled to early retirement who have reached the age of 62 and were employed by the company for 30 years, or who have reached the age of 63 and were employed by the company for 25 years, as well as for a limited number of former executives.

For obligations that are funded entirely by recognized provisions, the company bears the risks associated with lifelong pension benefits.

Plans in the USA

In the United States, a range of defined benefit pension plans at International offer employees retirement benefits in the form of life annuities. The benefits of the pension plan for salaried employees are generally based on salary and length of service, while benefits under the two pension plans for wage-earning staff are generally based on a negotiated amount for each year of service.

The pension plans for wage-earning staff and salaried employees have been closed to new entrants since 2008 and 1996, respectively, and, with the exception of one of the plans for wage-earning staff, are also closed to the accrual of further benefit entitlements.

These plans are funded pension plans subject to the US Employee Retirement Income Security Act (ERISA) and are eligible for tax benefits as qualified pension plans under US law. Under internal guidelines, the minimum required contribution pursuant to ERISA and the Internal Revenue Code is funded in each case, and additional discretionary contributions are paid in from time to time.

The plan assets are invested as part of a diversified strategy by experienced fund managers in equities, real estate, hedge funds, credit products, and assets in order to hedge liabilities, and diversified by an external investment advisor to avoid concentrations in type, sector, issuer, market, or country. Each pension plan has an investment policy that, among other things, defines strategic asset allocation depending on the funding level. As the funding level increases, investments are reallocated to asset classes that reduce interest rate risk at the expense of higher-yielding asset classes that are also more volatile. No derivative products are currently used to hedge longevity or interest rate risk.

For executives, US law provides for nonqualified defined benefit plans that are not subject to the ERISA and provide retirement benefits in the form of a life annuity, a lump sum, or installments. These are financed solely by provisions.

In addition, in the USA, other post-employment benefits (OPEB plans) in the form of medical benefits, prescription drugs, and life insurance, some of which are funded, are provided to a closed group of participants for life.

Plans in Germany

The plans in Germany mainly comprise pension plans of the German companies of MAN Truck & Bus and TRATON Holding. Once their active working life is over, these companies grant their employees in Germany benefits provided by an occupational pension system that constitutes one of the key elements of their remuneration policy. Occupational pensions provide additional retirement benefits as well as risk protection in the event of invalidity or death. As part of the merger of significant parts of the research and development departments within the TRATON GROUP, some of these plans were transferred to the German Group R&D company.

Under the current pension plans, all active employees receive employer contributions that are tied to their remuneration and can also make additional provisions through deferred compensation that is often employer-subsidized. The employer- and employee-funded contributions plus returns on capital market investments allow staff to accumulate plan assets during their active employment that are paid out as a lump sum or in installments on retirement, or that can be annuitized in certain cases. The risk of the investments is gradually reduced as employees get older (life cycle concept). The performance of the plan assets is based on the return on capital investments. The total amount of contributions paid in for the employee is paid out as a minimum when the employee retires.

Former employees, pensioners, or employees with vested benefits who have left the company also have benefit entitlements from discontinued pension plans, which are designed to provide lifelong pension payments. These commitments are exposed to the standard longevity and inflation risks, which are regularly monitored and assessed.

German pension assets are managed by MAN Pension Trust e.V. and WTW Pensionsfonds AG. These assets are irrevocably protected from recourse by the Group companies and may only be used to fund current pension benefit payments or to settle claims by employees in the event of insolvency. Proper management and utilization of the trust assets is supervised by independent trustees. Additionally, WTW Pensionsfonds AG is regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin⁠ ⁠—⁠ ⁠German Federal Financial Supervisory Authority).

The pension assets are invested by professional investment managers in accordance with investment rules laid down by TRATON SE’s Investment Committee. Strategic allocation of the pension assets is based on regular asset/liability management studies. In addition to pure administration, WTW Investments GmbH also handles fiduciary management for WTW Pensionsfonds AG.

The acquisition of securities issued by Volkswagen Group companies and investments in owner-occupied real estate are generally not permitted.

Plans in other countries

Employees in the United Kingdom, Switzerland, Canada, and Brazil receive pension benefits under defined benefit funded pension and healthcare plans.

The pension plans granting lifelong pensions in the United Kingdom have been closed to new entrants, and existing members cannot acquire additional entitlements. Trustee boards, which have appointed professional administrators and advisors, are responsible for administering the pension plans, including investing the assets. Regular asset/liability management studies form the basis of investment and risk management. At MAN Truck & Bus, investments are aligned with the liability structure and offer comprehensive protection against changes in interest rates and inflation rates.

Employees in Switzerland accrue entitlements through employer and employee contributions to multi-employer (MAN Truck & Bus) or occupational (Scania) pension providers that are converted into a lifelong pension at retirement at the terms in force at that time. The pension institutions are managed conservatively on the basis of standards imposed by the government. If the plan assets are insufficient to meet the pension entitlements because of adverse market developments, the member employers and their employees may be required to make stabilization contributions.

In Canada, there are two registered and funded defined benefit pension plans, one for wage-earning staff and one for salaried employees, as well as an Other Post-Employment Benefits (OPEB) plan. The pension plans provide lifetime annuities and are closed to new entrants. The pension plan for salaried employees (the defined benefit component) is also closed for the acquisition of additional entitlements. The Canadian OPEB plan provides health, dental, and life insurance benefits to eligible pensioners.

Employees in Brazil are entitled to benefits under defined benefit pension plans funded largely by plan assets and have entitlements under healthcare plans funded by provisions.

Furthermore, other countries have pension plans with a low level of benefits or grant mandatory post-employment benefits. Some of these benefits are funded by plan assets, either in full or in part (Netherlands, Belgium, France), or are only funded by provisions (Austria, Türkiye, Poland, Italy, Mexico).

The following amounts were recognized in the balance sheet for defined benefit plans:

The following table shows changes in the net defined benefit liability recognized in the balance sheet:

1 Amounts recognized in the income statement

The change in the present value of the defined benefit obligation is attributable to the following factors:

As of the reporting date, €1,840 million (previous year: €2,188 million) of the defined benefit obligation is attributable to the International plans in the USA, €1,571 million (previous year: €1,577 million) to the plans of TRATON Holding, the German MAN Truck & Bus companies, and the German Group R&D company, and a further €1,077 million (previous year: €1,001 million) to the plans in Sweden.

Changes in the relevant actuarial assumptions would have the following effects on the defined benefit obligation:

The sensitivity analyses shown above consider the change in one assumption at a time, leaving the other assumptions unchanged versus the original calculation, i.e., any correlation effects between the individual assumptions are ignored. To examine the sensitivity of the present value of the defined benefit obligation to a change in assumed life expectancy, the age of the beneficiaries was reduced by one year as part of a comparative calculation. The average duration of the defined benefit obligation weighted by the present value of the defined benefit obligation (Macaulay duration) is nine years (previous year: ten years).

The present value of the defined benefit obligation is spread across the members of the plan as follows:

The maturity profile of payments attributable to the defined benefit obligation is presented in the following table by classifying the present value of the obligations by the maturity of the underlying payments:

Changes in plan assets are shown in the following table:

As of the reporting date, €1,221 million (previous year: €1,378 million) of the fair value of plan assets was attributable to the International plans in the USA, €1,509 million (previous year: €1,438 million) to the plans of TRATON Holding, the German MAN Truck & Bus companies, and the German Group R&D company, and a further €375 million (previous year: €331 million) to the plans in Sweden.

In the next fiscal year, employer contributions to plan assets are expected to amount to €129 million (previous year: €123 million).

The investment of plan assets to cover future pension obligations resulted in total comprehensive income of €257 million (previous year: €223 million).

Plan assets are invested in the following asset classes:

25. Other provisions

Accounting policies: other provisions

Provisions are recognized for a present obligation to a third party arising from a past event that is likely to result in an outflow of resources and whose amount can be measured reliably. The amount of the provision is determined based on estimates of the amount of the loss and the probability of utilization.

Provisions that will not result in an outflow of resources within one year are recognized at their discounted settlement amount as of the reporting date. The discount rate is based on market interest rates. The settlement amount also includes the expected cost increases as of the reporting date. Provisions are not offset against recourse rights.

Estimates and management’s judgment: recognition and measurement of provisions

Recognition and measurement of provisions are based on estimates regarding the amount and probability of the occurrence of future events, as well as the estimation of the discount rate. Whenever possible, past experience or external appraisals are taken into account. Warranty claims arising from unit sales are determined on the basis of estimated future costs and ex gratia arrangements. In addition, assumptions must be made about the nature and extent of future warranty and ex gratia claims. The measurement of restructuring provisions is based on estimates and assumptions regarding the amount of severance payments, the effects of onerous contracts, the timeline for the implementation of measures, and, consequently, the timing of the expected payments. Litigation and other court proceedings lead to complex legal issues and entail numerous uncertainties. The current status of negotiations and estimates by local management and TRATON SE’s Executive Board as well as by external lawyers are taken into account for the measurement.

Obligations arising from unit sales contain provisions that cover all risks attributable to the sale of vehicles and spare parts. These primarily relate to provisions for warranties and statutory or contractual guarantee obligations. They also include provisions for discounts, bonuses, and similar allowances incurred after the reporting date, but for which there is a legal or constructive obligation attributable to sales revenue before the reporting date.

Provisions for obligations to employees are recognized for long-service awards, partial retirement arrangements, severance payments, and similar obligations, among other things.

As of December 31, 2025, there were provisions for civil lawsuits against Scania Vehicles & Services and MAN Truck & Bus in connection with the EU antitrust proceedings. The provisions for litigation and legal risks also contain amounts related to a large number of legal disputes and official proceedings in which TRATON GROUP companies become involved in Germany and internationally in the course of their operating activities. In particular, such legal disputes and other proceedings may occur in relation to suppliers, dealers, customers, and employees. Refer to Note 32. Litigation/legal proceedings for a discussion of the legal risks.

Miscellaneous provisions relate to a large number of identifiable specific risks and uncertain obligations arising from operating activities that are measured at the expected settlement amount. Miscellaneous provisions also contain provisions for litigation in connection with indirect and other taxes.

26. Trade payables

Individual companies of the TRATON GROUP use supplier finance arrangements in which a supplier sells its existing trade receivables to a bank or third-party provider. The arrangements are subject to the following terms and conditions:

• In traditional supplier finance arrangements (single source of financing), the supplier sends the invoice to the TRATON GROUP company after the goods have been delivered. The invoice is approved for payment by TRATON and the supplier offers the existing receivable for purchase to the designated bank. The bank accepts the offer, buys the invoice, and immediately pays a discounted invoice amount to the supplier. TRATON pays the full invoice amount to the bank when it is due.
• In the case of platform-based supplier finance arrangements (multi-bank approach), the supplier sends the invoice to the TRATON GROUP company after delivery of the goods. The invoice is approved for payment by TRATON. The supplier approves the invoices on the platform for early payment. One of the banks/third-party providers on the platform accepts the offer, buys the invoice, and immediately pays a discounted invoice amount to the supplier. TRATON pays the full invoice amount to the bank/third-party provider when it is due.

These continue to be presented in the balance sheet under trade payables because they meet the definition of a trade payable, and the contractual terms (e.g., payment terms) do not change or do not change materially. Collateral is not pledged in this context. Correspondingly, the cash outflow is reported in net cash provided by/used in operating activities.

Trade payables and supplier finance arrangements

The suppler finance arrangements do not result in any material liquidity risks or risks from risk concentrations, and there were no noncash transfers of trade payables to financial liabilities in the reporting period.

For information on the measurement principles applied to trade payables and further information on liquidity risk, refer to Notes 28. Significance of financial instruments for net assets, financial position, and results of operations and 29. Nature and extent of risks arising from financial instruments.