Impairment losses and reversal of impairment losses

The general descriptions of plans and models—as specified in Note 11, Impairment losses and reversal of impairment losses, of the Annual Report 2023/24—still apply.

IMPAIRMENT TESTS OF CASH GENERATING UNITS OR GROUPS OF CASH GENERATING UNITS CONTAINING GOODWILL

The voestalpine Group generally determines the recoverable amount of cash-generating units using the value in use approach. A management decision to restructure the goodwill-carrying Automotive Components business unit with goodwill of EUR 38.8 million was made on September 23, 2024 and communicated to the workforce on October 18, 2024. This leads to a change in cash flow planning, which may not yet be taken into account when determining the value in use as of September 30, 2024. The recoverable amount was therefore determined on the basis of an income-based fair value less costs to sell. The forecast cash flows are discounted to a present value using a capital value-oriented method (discounted cash flow method). Accordingly, the uncertainties described in the Consolidated Financial Statements associated with a discounted cash flow valuation and, in particular, uncertainties relating to the assessment of the cash flow effects of the restructuring—in particular the success of non-personnel-related measures, the amount of savings, and their timing—apply.

The restructuring is a response to structural changes and declining customer demand in the automotive sector by reorganizing the Automotive Components locations in Germany. In future, the plants in Dettingen, Schmölln, Schwäbisch Gmünd, and Böhmenkirch will work together in a production network, each with its own technology and product specialization. The business operations in Birkenfeld are to be discontinued, taking into account the results of negotiations with the works council and IG Metall.

The fair value measurement is categorized in its entirety in Level 3 of the fair value hierarchy, as significant input factors (in particular cash flows) are not observable on the market.

The comparison of the recoverable amount determined and the carrying amount as of September 30, 2024, does not result in any need for impairment. As of September 30, 2024, a perpetual annuity was calculated with a growth rate of 1.37% (2023/24: 1.37%). The after-tax WACC was 8.78% (2023/24: 9.32%), the pre-tax WACC was 11.11% (2023/24: 12.14%).

The discount rate and the cash flows are the most important forward-looking assumptions. There is the risk that any change in these assumptions will necessitate a material adjustment of the carrying amounts in the future.

For the goodwill-carrying units Automotive Components and HPM Production, any increase in the after-tax discount rate by one percentage point or any decrease in cash flows by 10% or 20% would trigger the following shortfall in the carrying amounts: