16. Intangible assets and property, plant and equipment

Changes in intangible assets and goodwill

Changes in property, plant and equipment

16.1 Impairment of cash generating units with own goodwill

For the purposes of impairment testing, goodwill is allocated to the following cash-generating units and the cash flows of these cash-generating units are discounted at the following discount rates:

The recoverable amount attributable to the cash generating unit “Sales” exceeds the carrying amount by EUR 62.5 million (previous year: EUR 50.0 million). In the event of a decrease in future cash flows by 21.9% (previous year: 21.8%), or an increase in the interest rate by 1.8% (previous year: 1.3%), the carrying amount corresponds to the present value of the future cash flows.

The recoverable amount of the “Waste Management/Austria” cash-generating unit exceeds the carrying amount by EUR 16.3 million (previous year: EUR 32.4 million), while the recoverable amount of CEVAK a.s. exceeds the carrying amount by EUR 86.7 million (previous year: EUR 75.8 million). In the event of a decrease in future cash flows by 6.9% (previous year: 22.9%), or an increase in the interest rate by 0.4% (previous year: 0.7%), the carrying amount of the “Waste Management Segment/Austria” cash-generating unit corresponds to the present value of the future cash flows. A decrease in CEVAK a.s.' future cash flows by 10% would not result in an impairment.

16.2 Impairment of cash generating units without own goodwill

Timelkam CCGT (combined cycle gas-turbine) power plant

Due to the current situation on the market, impairment testing was performed for the Timelkam CCGT power plant (Energy Segment). The maximum output of the power plants amounts to 422 MW, maximum district heating supply is 100 MW. Efficiency was estimated at 55.7%. Annual electricity generation was recognised at up to 1,815 GWh per year (previous year: 1,741 GWh). The assumptions for the future electricity and gas prices are based, where available, on market data; if no market data were available, estimates were made based on market studies. The estimated electricity price is EUR 155 to EUR 209 /MWh (previous year: EUR 93 to EUR 196/MWh). Expenses for maintenance and repair were recognised according to maintenance plans and contracts. Other material expense items such as personnel costs, insurance and infrastructure costs are annually increased by an estimated increase rate. The discount rate is 5.9% (previous year: 5.8%). The planning horizon ends in the 2037/2038 fiscal year. Due to lower market expectations in particular, an impairment of EUR 10.2 million (previous year: reversal of impairment of EUR 4.1 million) was recognised. The recoverable amount determined using the DCF method corresponds to the value in use in the amount of EUR 33.5 million (previous year: EUR 47.2 million). Fluctuations in cash flows of 20% resulted in a change of EUR 6.7 million in the recoverable amount. An increase in the interest rate by 0.5% results in a reduction of the recoverable amount by EUR 0.6 million.

16.3 IFRS 16 (Leases)

For leased assets, a right-of-use asset representing its right to use an underlying asset is capitalised and, at the same time, a lease liability recognised in the amount of the present value of the lease payments. Discounting takes place at the lease-specific interest rate. If the lease-specific interest rate cannot be determined, the incremental borrowing interest rate is applied. Depending on the term, an incremental borrowing interest rate of 4.5% or 5.0% was assumed to apply in the 2022/2023 fiscal year. The right of use asset is then amortised and the lease liability carried forward using the effective interest method.

IFRS 16 is not applied to short-term leases and leases concerning an underlying asset of minor value. In accordance with IFRS 16.4, the company has opted out of voluntary application of IFRS 16 for intangible assets.

The Group has been leasing the property at Böhmerwaldstraße 3, Linz, where Group headquarters is located, from Power Tower GmbH since the year 2008. The Group holds a 1% share in the entity.

The entity is not funded by the Group. The leasing contract is for an indefinite period, cancellation by the lessee is only possible 20 years after the start of the contract at the earliest, under certain circumstances only after 23 years. The Group has the unilateral right, but no obligation, to acquire Power Tower GmbH 15 or 20 years after the commencement of the lease. Leasing payments are linked to interest rate developments. The Group is required to perform the ongoing maintenance of the property and fulfill all legal requirements that could also apply to the owner. There are no other additional risks. Power Tower GmbH is to be considered a structured entity pursuant to IFRS 12, but the lack of control means that it is not to be included as a subsidiary in the Consolidated Financial Statements. In accordance with IFRS 16, a right of use asset in the amount of EUR 31.6 million and a lease liability in the amount of EUR 36.0 million have been recognised as of 30 September 2023.

In the 2007/2008 fiscal year, plant and equipment assets were sold and leased back for a term of 15 years (“sale and leaseback”) in the Waste Management Segment. The lease was terminated in the 2022/2023 fiscal year and the outstanding lease liability of EUR 35.7 million repaid. The right of use assets had a carrying amount of EUR 9.9 million as of 30 September 2022 and the corresponding liability amounted to EUR 37.4 million. The assets are now recognised under property, plant and equipment.

As of 30 September 2023, the lease liabilities amount to EUR 81.4 million (previous year: EUR 115.9 million) (up to 1 year: EUR 5.0 million; 1-5 years EUR 19.4 million, more than 5 years EUR 57.0 million) (previous year: up to 1 year: EUR 45.2 million, 1-5 years EUR 12.7 million, more than 5 years EUR 58.0 million). The Statement of Financial Position recognises the lease liabilities in the item for financial liabilities.

For fiscal year 2022/2023, the cash outflows for leases amount to EUR 9,145.8 thousand (previous year: EUR 10,337.6 thousand). Expenses for leases not recognised in accordance with IFRS 16 amount to EUR 2,096.0 thousand (of which current rental and lease expenses: EUR 567.0 thousand, of which marginal rental and lease expenses: EUR 279.7 thousand, of which rental and lease expenses not covered by IFRS 16: EUR 1,249.3 thousand, of which variable rental and lease expenses: EUR 0.0 thousand) (previous year: EUR 1,746.8 thousand; of which: short-term rental and lease expenses: EUR 604.7 thousand, of which marginal rental and lease expenses: EUR 245.5 thousand, of which rental and lease expenses not covered by IFRS 16: EUR 896.6 thousand, of which variable rental and lease expenses: EUR: 0.0 thousand).

The item property, plant and equipment recognises the following right of use assets:

16.4 Further disclosures

Research costs in the amount of EUR 5.0 million (previous year: EUR 5.3 million) were recognised as expenses.

In the 2022/2023 fiscal year, interest on borrowed capital in the amount of EUR 364.0 thousand (previous year: EUR 149.5 thousand) was capitalised. The applied interest rate was 3.5% (previous year 3.6%).

Additions to assets under construction led to outflows of payment instruments in the amount of EUR 59,892.5 thousand (previous year: EUR 60,297.2 thousand). Obligations for the acquisition of property, plant and equipment amount to EUR 312,893.3 thousand (previous year: EUR 46,027.1 thousand). A plot of land with a carrying amount of EUR 452.1 thousand (Holding & Services Segment) is classified as available for sale and will be transferred at the beginning of the fiscal year 2023/2024.