22. Trade payables from bills of exchange and trade payables from reverse factoring agreements

voestalpine offers for selected suppliers to participate in different supply chain finance models. This largely concerns bills of exchange payable as well as reverse factoring models.

This involves giving suppliers the option to receive early payment by selling their receivables to a financial institution at a discount. voestalpine pays at the time the associated bill of exchange is due or at the time the invoice under the reverse factoring agreement is due.

The invoice amounts arise from supply and service relationships. They are an integral part of working capital. voestalpine paid a total of EUR 1.8 million in interest expense that it incurs in connection with these models. The company also provides Group guarantees to the financial institutions. The payment terms are usually extended by up to 135 days.

The payments to the financial institutions at the time the bills of exchange are presented and the reverse factoring liabilities paid are shown in the cash flows from operating activities because they are considered a part of the Group’s ordinary operating cycle and continue to be elements of its operating costs, i.e., payments for goods and services.