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Notes on financial instruments

The reclassification and measurement of financial instruments from IAS 39 to IFRS 9 may be presented as follows:

Classes

 

 

 

Measurement category IAS 39

 

Measurement category IFRS 9

 

Carrying amount IAS 39 03/31/2018

 

Valuation adjust­ments acc. to IFRS 9

 

Carrying amount IFRS 9 04/01/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

Other financial assets – non-current

 

At amortized cost

 

Loans and receivables

 

At amortized cost

 

6.1

 

0.0

 

6.1

 

 

Available for sale at cost

 

 

11.4

 

 

1

 

At fair value through profit or loss

 

Available for sale at fair value

 

At fair value through profit or loss

 

32.1

 

0.0

 

32.1

 

 

Fair value option

 

At fair value through profit or loss

 

1.4

 

0.0

 

1.4

Trade and other receivables

 

At amortized cost

 

Loans and receivables

 

At amortized cost

 

1,599.5

 

0.0

 

1,599.5

 

 

 

At fair value through profit or loss

 

144.1

 

0.0

 

144.1

 

At fair value through profit or loss

 

Derivate (Held for Trading)

 

At fair value through profit or loss

 

13.5

 

0.0

 

13.5

 

At fair value through profit or loss

 

Derivate (Hedge Accounting)

 

No IFRS 9 category

 

15.9

 

0.0

 

15.9

Other financial assets – current

 

At fair value through profit or loss

 

Fair value option

 

At fair value through profit or loss

 

388.1

 

0.0

 

388.1

Cash and cash equivalents

 

At amortized cost

 

Loans and receivables

 

At amortized cost

 

705.8

 

0.0

 

705.8

Assets 2017/18

 

 

 

 

 

 

 

2,917.9

 

0.0

 

2,906.51

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities – current

 

At amortized cost

 

At amortized cost

 

2,783.6

 

0.0

 

2,783.6

Financial liabilities – non current

 

At amortized cost

 

At amortized cost

 

1,315.6

 

0.0

 

1,315.6

Trade and other payables

 

At amortized cost

 

At amortized cost

 

2,633.8

 

0.0

 

2,633.8

 

At fair value through profit or loss

 

Derivate (Held for Trading)

 

At fair value through profit or loss

 

17.8

 

0.0

 

17.8

 

At fair value through profit or loss

 

Derivate (Hedge Accounting)

 

No IFRS 9 category

 

4.4

 

0.0

 

4.4

Liabilities 2017/18

 

 

 

 

 

 

 

6,755.2

 

0.0

 

6,755.2

 

 

 

 

 

 

 

 

 

 

 

 

 

1
Reclassification of other equity investments in affiliated companies from the valuation category AfS at cost to “Other shares in companies” as of April 1, 2018.

In millions of euros

The initial application of IFRS 9 in the voestalpine Group does not materially affect the classification of financial assets and liabilities.

The most important reclassification from the previous measurement categories under IAS 39 to the new measurement categories under IFRS 9 concerns a portfolio of trade receivables and other receivables that is slated for sale as of the next sales date in the context of factoring programs. While these receivables were measured at cost in the loans and receivables category until now, as of April 1, 2018, they have been measured at fair value through profit or loss (FVTPL) due to their allocation to the “sale” business model, which has not led to any material valuation adjustments, however.

The voestalpine Group has been holding an equity instrument in the amount of EUR 32.1 million as of March 31, 2018, which had been classified as available for sale at fair value. Pursuant to IFRS 9, it has been classified as FVTPL since April 1, 2018.

Until now, other equity investments in affiliated companies not included in the consolidated financial statements on account of their secondary significance were recognized as available for sale at cost. Since April 1, 2018, however, they have been presented in “Other shares in companies.” They were reclassified at the carrying amount of EUR 11.4 million.

The classification of financial liabilities remains unchanged; here, solely the measurement categories were updated to reflect the wording of IFRS 9.

Categories of financial instruments

Classes

 

Financial assets measured at amortized cost

 

Financial assets measured at fair value

 

Total

Categories

 

Loans and receivables

 

Available for sale at cost

 

Available for sale at fair value

 

Financial assets measured at fair value through profit or loss

 

 

 

 

 

 

 

 

 

 

Derivate (Held for trading and hedge accounting)

 

Other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Assets 03/31/2018

 

 

 

 

 

 

 

 

 

 

 

 

Other financial assets – non-current

 

6.1

 

11.4

 

32.1

 

 

 

1.4

 

51.0

Trade and other receivables

 

1,743.6

 

 

 

 

 

29.4

 

 

 

1,773.0

Other financial assets – current

 

 

 

 

 

 

 

 

 

388.1

 

388.1

Cash and cash equivalents

 

705.8

 

 

 

 

 

 

 

 

 

705.8

Carrying amount (= Fair value)

 

2,455.5

 

11.4

 

32.1

 

29.4

 

389.5

 

2,917.9

 

 

 

 

 

 

 

 

 

 

 

 

 

In millions of euros

Categories

 

Financial assets measured at amortized cost

 

Financial assets measured at fair value

 

Total

 

 

 

 

Hedge Accounting

 

Other financial assets measured at fair value through profit or loss

 

 

 

 

 

 

 

 

 

 

 

Assets 09/30/2018

 

 

 

 

 

 

 

 

Other financial assets – non-current

 

5.6

 

 

 

33.7

 

39.3

Trade and other receivables

 

1,473.5

 

3.6

 

157.2

 

1,634.3

Other financial assets – current

 

 

 

 

 

256.0

 

256.0

Cash and cash equivalents

 

264.0

 

 

 

 

 

264.0

Carrying amount (= Fair value)

 

1,743.1

 

3.6

 

446.9

 

2,193.6

 

 

 

 

 

 

 

 

 

In millions of euros

Classes

 

Financial liabilities measured at amortized cost

 

Financial liabilities measured at fair value

Total

Categories

 

Financial liabilities measured at amortized cost

 

Financial liabilities measured at fair value through profit or loss – derivatives (Held for trading and hedge accounting)

 

 

 

 

 

Carrying amount

 

Fair value

 

Carrying amount (= Fair value)

 

Carrying amount

 

Fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities 03/31/2018

 

 

 

 

 

 

 

 

 

 

Financial liabilities – non-current

 

2,783.6

 

2,804.6

 

 

 

2,783.6

 

2,804.6

Financial liabilities – current

 

1,315.6

 

1,324.5

 

 

 

1,315.6

 

1,324.5

Trade and other payables

 

2,633.8

 

2,633.8

 

22.2

 

2,656.0

 

2,656.0

Total

 

6,733.0

 

6,762.8

 

22.2

 

6,755.2

 

6,785.0

 

 

 

 

 

 

 

 

 

 

 

In millions of euros

Categories

 

Financial liabilities measured at amortized cost

 

Financial liabilities measured at fair value

 

Total

 

 

 

 

Hedge Accounting

 

Other financial liabilities measured at fair value through profit or loss

 

 

 

Carrying amount

 

Fair value

 

Carrying amount (= Fair value)

 

Carrying amount (= Fair value)

 

Carrying amount

 

Fair value

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities 09/30/2018

 

 

 

 

 

 

 

 

 

 

 

 

Financial liabilities – non-current

 

2,376.3

 

2,376.4

 

 

 

 

 

2,376.3

 

2,376.4

Financial liabilities – current

 

1,756.7

 

1,758.1

 

 

 

 

 

1,756.7

 

1,758.1

Trade and other payables

 

2,309.4

 

2,309.4

 

1.6

 

15.5

 

2,326.5

 

2,326.5

Total

 

6,442.4

 

6,443.9

 

1.6

 

15.5

 

6,459.5

 

6,461.0

 

 

 

 

 

 

 

 

 

 

 

 

 

In millions of euros

The carrying amount of the financial assets and liabilities represents an adequate approximation of the fair value if there is no difference between the fair value and the carrying amount.

The fair values of financial liabilities measured at amortized cost, excluding bonds issued, fall under Level 2. The Valuation is performed according to the discounted cash flow method, whereby the input parameters for the calculation of the market values are the foreign exchange rates, interest rates, and credit spreads observable on the market. Based on the input parameters, the fair values are calculated by discounting the estimated future cash flows at typical market interest rates.

Bonds issued are measured using Level 1 inputs according to the quoted price as of the reporting date.

The table below analyzes financial assets and financial liabilities that are measured at fair value on a recurring basis. These measurements are based on a fair value hierarchy that categorizes the inputs for the valuation methods used to measure fair value into three levels. The three levels are defined as follows:

Inputs

Level 1

 

Comprises quoted prices (unadjusted) in active markets for identical assets or liabilities that the entity can access at the measurement date.

Level 2

 

Comprises inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly.

Level 3

 

Comprises unobservable inputs for the asset or liability.

Level of the fair value hierarchy for recurring fair value measurements

 

 

Level 1

 

Level 2

 

Level 3

 

Total

 

 

 

 

 

 

 

 

 

03/31/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

 

 

Derivatives (Held for trading and hedge accounting)

 

 

 

29.4

 

 

 

29.4

Fair value option (securities)

 

389.5

 

 

 

 

 

389.5

Available for sale at fair value

 

 

 

 

 

32.1

 

32.1

 

 

389.5

 

29.4

 

32.1

 

451.0

 

 

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 

 

Financial liabilities measured at fair value through profit or loss – derivatives (Held for trading and hedge accounting)

 

 

 

22.2

 

 

 

22.2

 

 

0.0

 

22.2

 

0.0

 

22.2

 

 

 

 

 

 

 

 

 

09/30/2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Financial assets

 

 

 

 

 

 

 

 

Other financial assets – non-current

 

1.6

 

 

 

32.1

 

33.7

Liabilities from derivatives – hedge accounting

 

 

 

3.6

 

 

 

3.6

Trade and other receivables

 

 

 

34.3

 

122.9

 

157.2

Other financial assets – current

 

256.0

 

 

 

 

 

256.0

 

 

257.6

 

37.9

 

155.0

 

450.5

 

 

 

 

 

 

 

 

 

Financial liabilities

 

 

 

 

 

 

 

 

Liabilities from derivatives – hedge accounting

 

 

 

1.6

 

 

 

1.6

Trade and other payables

 

 

 

15.5

 

 

 

15.5

 

 

0.0

 

17.1

 

0.0

 

17.1

 

 

 

 

 

 

 

 

 

In millions of euros

The securities valued at EUR 257.6 million are shown as FVTPL in financial assets and are allocated to the “sale” business model. This group of financial assets is managed pursuant to the documented risk management and investment strategy based on their fair value, and their performance is observed and reported based on the fair value as well.

Derivative transactions (Level 2) are measured using the discounted cash flow method. This entails determining the value that would be realized if the hedging position were sold. The observable currency exchange rates and raw materials prices as well as the interest rates are the input for the calculation of fair values. The fair values are calculated based on the inputs by discounting expected future cash flows at typical market interest rates.

voestalpine recognizes reclassifications between different levels of the fair value hierarchy as of the end of the reporting period in which the change occurred. No reclassifications were made in the business year 2017/18 and from April 1, 2018, through September 30, 2018.

The reconciliation of Level 3 financial assets measured at fair value from the opening balance to the closing balance is depicted as follows:

Level 3 – FVTPL – Other financial assets – non-current

 

 

04/01–09/30/2017

 

04/01–09/30/2018

 

 

 

 

 

Opening balance

 

32.1

 

32.1

 

 

 

 

 

Total of gains/losses recognized in the income statement:

 

0.0

 

0.0

Finance costs/Finance income

 

0.0

 

0.0

Closing balance

 

32.1

 

32.1

 

 

 

 

 

 In millions of euros

Level 3 includes the investment in Energie AG Oberösterreich that is measured at fair value as “FVTPL.” The fair value of this company can be reliably determined based on the valuation report performed once a year for Energie AG Oberösterreich as a whole and taking into account all relevant information.

Significant sensitivities in the determination of fair values can result from changes in the underlying market data of comparable entities and the input factors used to determine net present value (in particular discount rates, long-term forecasts, plan data, etc.).

Level 3 – FVTPL – Trade and other receivables

 

 

 

 

 

 

Opening balance as of 04/01/2018

 

144.1

 

 

 

Disposals

 

–144.1

Additions

 

122.9

Closing balance as of 09/30/2018

 

122.9

 

 

 

 In millions of euros

The receivables in this portfolio are sold monthly on a rolling basis as part of the Group’s factoring programs. The results attributable to this portfolio are immaterial.

The credit risk associated with the respective debtor is the most important factor in the fair value determination of the portfolio entitled “Trade and other receivables earmarked for factoring.” Hence any increase/decrease by 1% in the established default rates would result in a change in the fair value of this portfolio in the same amount; as a rule, however, the fair value change is disproportionately low, because credit insurance has been purchased for material portions of the portfolio.


About voestalpine

In its business segments, voestalpine is a globally leading technology and capital goods group with a unique combination of material and processing expertise. With its top-quality products and system solutions using steel and other metals, it is a leading partner to the automotive and consumer goods industries in Europe and to the aerospace, oil and gas industries worldwide. The voestalpine Group is also the world market leader in turnout technology, special rails, tool steel, and special sections.

Facts

50 Countries on all 5 continents
500 Group companies and locations
51,600 Employees worldwide

Earnings FY 2017/18

€ 13 Billion

Revenue

€ 2 Billion

EBITDA

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