20. Leases

 

(i) Right-of-use assets – Leasing

NORMA Group has significant leases for the rental of land and buildings. In addition, the Group maintains leases for various company cars and technical equipment under non-cancellable lease agreements. Besides the usual extension options, the leases include, to a minor extent, purchase and termination options that are not taken into account. The lease terms per asset class are as follows:

•Right-of-use assets – land and buildings: 1 month to 78 years

•Right-of-use assets – machinery and tools : 1 to 6 years

•Right-of-use assets – forklifts and warehouse: 1 to 9 years

•Right-of-use assets – office and IT equipment: 1 to 6 years

•Right-of-use assets – company cars: 1 to 7 years

 

The Group’s leases generally do not contain credit terms.

 

(ii) Recognition exemptions

NORMA Group has made use of accounting options for short-term leases (minimum term of no more than twelve months if no purchase option has been agreed) as well as for low-value assets as the lessee and has not recognized these as a right-of-use/lease liability but rather as a current expense – with the exception of leased assets attributable to the asset class “Right-of-use assets – land and buildings”. Furthermore, lessees are granted an accounting option not to separate leasing and non-leasing components, which NORMA Group has made use of, except for the “Right-of-use assets – land and buildings” and “Right-of-use assets – company cars” asset classes.

 

(iii) Extension and termination options

Several of NORMA Group’s real estate leasing contracts contain renewal options. Termination options are included to a minor extent in the area of real estate leasing. Such contract terms are used to give the Group operational flexibility with regard to the contract portfolio. The majority of the existing renewal and termination options can only be exercised by the Group and not by the respective lessor.

As of December 31, 2022, potential additional cash outflows from renewal options amounting to EUR 29,319 thousand (Dec 31, 2021: EUR 5,147 thousand) have not been recognized in the lease liability as it is not reasonably certain that the leases will be renewed. As of December 31, 2022, and 2021, there were no potential reduced cash outflows from termination options.

Changes in estimates of the term and amount of expected lease payments (index-based payments) resulted in increases in the right-of-use assets and lease liabilities of EUR 29 thousand. In addition, changes in estimates resulted in decreases in the right-of-use assets and lease liabilities of EUR 2,694 thousand.

 

(iv) Amounts recognized in the Consolidated Statement of Financial Position

The following items related to leases are shown in the Consolidated Statement of Financial Position:

The maturities of the nominal values and the carrying amounts of the lease liabilities are as follows:

 

 

(v) Amounts recognized in the income statement

The following amounts relating to leases are recognized in the income statement:

 

(vi) Amounts recognized in the Consolidated Statement of Cash Flows

The Consolidated Statement of Cash Flows includes a total of EUR 16,497 thousand for lease payments (2021: EUR 12,339 thousand). Of these, payments of EUR 15,047 thousand were recognized in cash outflow/inflow from financing activities 2021: EUR 11,293 thousand) and payments of EUR 1,450 thousand were recognized in cash inflow from operating activities (2021: EUR 1,046 thousand).

 

(vii) Sale-and-leaseback-transaction

A plot of land, including office and production buildings, which had a net asset value of EUR 6,043 thousand was sold for EUR 9,823 thousand (USD 10,350 thousand) as part of a sale and leaseback transaction.  NOTE 29. NON-CURRENT ASSETS HELD FOR SALE The income resulting from the transaction amounted to EUR 1,891 thousand and is reported under other operating income.

The resulting leaseback, with a minimum term of ten years and four extension options for five years each, which are not sufficiently certain to be exercised, resulted in a right of use of EUR 1,697 thousand and a lease liability of EUR 3,034 thousand. The proceeds from the sale and leaseback transaction were recognized in the cash flow from investing activities in the amount of EUR 6,369 thousand and in the cash flow from financing activities in the amount of EUR 3,454 thousand.