9. Property, plant and equipment

The reconciliation of the carrying amounts of property, plant and equipment for the periods presented in the Consolidated Financial Statements as of March 31, 2023, is as follows:

As of March 31, 2023, restrictions on the disposal of property, plant and equipment were EUR 0.0 million (March 31, 2022: EUR 0.5 million). Furthermore, as of March 31, 2023, commitments for the purchase of property, plant and equipment were EUR 421.6 million (March 31, 2022: EUR 263.9 million).

Borrowing costs related to qualifying assets in the amount of EUR 10.0 million (2021/22: EUR 3.6 million) were capitalized in the reporting period. The calculation was based on an average borrowing rate of 1.9% (2021/22: 1.3%).

In the business year 2022/23, the Management Board resolved and the Supervisory Board approved the sale of a property in Düsseldorf, Germany, which was largely not required for operating purposes and had a carrying amount of EUR 23.4 million. This led to negotiations with several interested parties. The sale is in line with the strategy of selling assets not required for operating purposes. The proceeds from the sale of this property in the business year just ended came to EUR 156.0 million. A lease agreement was concluded for those portions of the property that are required for operating purposes. The property was allocable to the High Performance Metals Division.

Right-of-use assets as per IFRS 16

The Group leases mainly land, buildings, and manufacturing facilities as well as vehicle fleets including locomotives. Most of the leases contain renewal options and rights to terminate, some of which are also stipulated in conjunction with non-cancelable lease terms.

In some cases, the Group has the option to purchase the assets at the end of the contractually agreed period.

The lease payments typically are either fixed or based on market interest rates or indices (e.g., the consumer price index (CPI)). A few leases provide for variable lease payments (e.g., usage-based leases).

The carrying amount of each class of right-of-use assets pursuant to IFRS 16, which are shown in property, plant and equipment, is as follows:

Lease expenses in the Consolidated Income Statement

The total cash outflows for leases are EUR 70.0 million (2021/22: EUR 63.9 million). In addition to repayments, this also includes cash outflows from short-term leases, low-value asset leases, and variable lease payments.

Based on the contracts concluded as of the reporting date, the variable lease rates will not increase significantly in the coming years.

As of March 31, 2023, there were no material leases that had not yet been made available and thus had not yet been recognized.

The effect of the measurement of residual value guarantees and purchase options on the carrying amount is deemed negligible.

Effect of renewal and termination options

Renewal and termination options can be exercised without the lessor’s approval. The fact that leases contain termination and renewal options gives the operating units of the voestalpine Group, which are responsible for utilizing the assets, a high degree of operational flexibility. The resulting flexibility and thus the range of potential future lease payments that have not yet been recognized in the statement of financial position is high. voestalpine generally assumes that renewal options will be exercised.

As regards the maturity analysis of lease liabilities, see Note 20. Financial liabilities.

Reconciliation of depreciation, amortization, and impairment of property, plant and equipment and intangible assets by functional classification

Other operating expenses for the business year 2022/23 contain EUR 178.9 million (2021/22: EUR 80.2 million) in impairment losses on property, plant and equipment, other intangible assets, and goodwill.