Annual Report 2023

5. Employees

5.1. Staff costs

 

 

2023

 

2022

Wages and salaries

 

(1,840)

 

(1,537)

Social security

 

(372)

 

(319)

Employee benefits (note 5.2)

 

(50)

 

(43)

Other staff costs

 

(269)

 

(204)

Total

 

(2,531)

 

(2,103)

Other staff costs include, among others, labour accident insurance, social responsibility costs, training costs, occasional hires and indemnities.

The average number of Group employees during the year was 131,108 (2022: 125,402).

The number of employees at the end of the year was 134,379 (2022: 131,094).

5.2. Employees benefits

Accounting policies

Post-employment benefits (retirement)

Defined contribution plans

Defined contribution plans are pension plans for which the Group makes defined contributions to independent entities (funds), and for which it has no legal or constructive obligation to pay any additional contribution at the time when the employees come into use of those benefits.

The contributions are based on a percentage of remuneration of the employees included in the plans.

The funds are open to employee private contributions, with no guaranties given by the Group over those contributions.

Group contributions to defined contribution plans are recognised as expenses at the time they are due.

Defined benefit plans

Defined benefit plans are pension plans where the Group guarantees a certain benefit to the employees included in the plan at the time such employees retire, with the respective responsibilities assured directly by the Group.

The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the defined benefit obligation at the end of the reporting period. The defined benefit obligation is calculated annually by independent actuaries using life annuity method, taking into account that the plans only include retired employees. The present value of the defined benefit obligation is determined by discounting the estimated future cash outflows using interest rates of high-quality corporate bonds that are denominated in the currency in which the benefits will be paid, and that have maturities close to those related liability.

No service costs are recognised since the current defined benefit plans only include retired employees. The net interest is recognised in the income statement on a yearly basis.

Remeasurements (actuarial gains and losses) arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise.

At the time of amendments to the defined benefit plans, past-service costs are immediately considered due and are recognised immediately in the income statement.

Other benefits

Post-employment benefits (Compensation plan to Group employees)

The post-employment compensation plan for employees of the Group, which consists of an annual contribution to a foundation that guarantees its independent management by third parties. These contributions have the characteristics of a defined contribution plan, given that the Group has no responsibility for making contributions, in addition to the annual amount defined by the Board of Directors. Additionally, the Group does not assume any risk, namely on the value of the assets in which its contributions are invested, nor on the final value of the benefits to be attributed, with this risk falling entirely on the plan participants.

Award due to at retirement date

In accordance with the Polish legislation in force, when an employee reaches retirement age (regardless of whether he retires at that time or not), he can request the payment of a premium corresponding to one month’s salary, which he can only receive once during its professional life.

Accordingly, the responsibilities for this award which constitutes a defined benefit plan, are determined annually based on an actuarial calculation carried out by a specialised independent entity.

The cost of past and current services, net interest as well remeasurements (actuarial gains or losses) are recognised as costs of the year.

Seniority awards

The programme of seniority awards which exists in some of the Group’s Companies includes a component of defined contribution and a defined benefit.

The defined contribution component consists in a life insurance granted to the employees covered by this programme, starting from a specific number of years of service. This benefit is awarded only when employees reach the age defined in the programme and the costs related to this component are recognised in the year to which they relate.

The component of defined benefit consists of an award in the year that employees complete a number of years of service. Accordingly, the liabilities for this component are determined annually based on actuarial valuations, carried out by a specialised independent entity.

The cost of current services, net interest as well as remeasurements (actuarial gains or losses) are recognised as costs of the year.

Amounts recognised in the balance sheet as employee benefits:

 

 

Employee benefits

 

 

2023

 

2022

Retirement benefits – defined benefit plan paid for by the Group

 

13

 

11

Seniority awards – defined benefit plan

 

60

 

54

Award due to at retirement date – defined benefit plan

 

5

 

3

Total

 

78

 

69

Amounts recognised in the income statement in staff costs and remeasurements reflected in equity in other comprehensive income:

 

 

Income statement

 

Other comprehensive income

 

 

2023

 

2022

 

2023

 

2022

Retirement benefits – defined contribution plan

 

8

 

6

 

 

Retirement benefits – defined benefit plan paid for by the Group

 

 

 

3

 

Seniority awards – defined benefit plan

 

11

 

6

 

 

Award due to at retirement date – defined benefit plan

 

2

 

1

 

 

Post-employment compensation – defined contribution plan

 

30

 

30

 

 

Total

 

50

 

43

 

3

 

The changes in each plan are detailed below:

 

 

Defined contribution plans for active employees

 

Defined benefit plans for
former employees

 

Other long-term benefits granted to employees

 

 

2023

 

2022

 

2023

 

2022

 

2023

 

2022

Balance as at 1 January

 

 

 

11

 

13

 

57

 

56

Interest costs

 

 

 

 

 

3

 

1

Current service cost

 

38

 

36

 

 

 

7

 

7

Actuarial (gains)/losses

 

 

 

 

 

 

 

 

 

 

 

 

Changes in financial assumptions

 

 

 

 

(1)

 

 

(2)

Changes in experience

 

 

 

3

 

1

 

3

 

1

Contributions or retirement pensions paid

 

(38)

 

(36)

 

(2)

 

(1)

 

(7)

 

(6)

Balance as at 31 December

 

 

 

12

 

11

 

65

 

57

Actuarial assumptions used in the calculation of the responsibilities for defined benefit plans and other long-term benefits:

 

 

Portugal

 

Poland

 

 

2023

 

2022

 

2023

 

2022

Mortality table

 

TV88/90

 

TV 88/90

 

GUS 2020

 

GUS 2020

Discount rate

 

3.80%

 

3.30%

 

5.30%

 

6.50%

Pensions growth rate

 

4.00%

 

4.00%

 

n/a

 

n/a

Salaries growth rate

 

 

 

 

 

 

 

 

short term

 

4.00%

 

5.00%

 

9.9%-15%

 

9.9%-15%

long term

 

3.00%

 

3.00%

 

4%-5%

 

4%-5%

The mortality assumptions used are those most commonly adopted in Portugal and Poland, are based on actuarial advice in accordance with published statistics and experience in each country. The assumption’s sensitivity analysis is described in note 2.6..

Expected future payments

The expected maturity for the next 10 years for the liabilities associated with defined benefit plans is as follows:

 

 

Less than 1 year

 

Between 1 and 5 years

 

Between 5 and 10 years

Retirement benefits – defined benefit plan paid for by the Group

 

2

 

5

 

4

Award due to at retirement date – defined benefit plan

 

1

 

3

 

4

Seniority awards – defined benefit plan

 

8

 

29

 

54

Total

 

11

 

36

 

62

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