16. Leases
Right-of-use assets
|
in thousand CHF |
Real estate |
Other right of-use assets |
Total right-of-use assets |
|
Net carrying amount as at 31.12.2022 |
226,489 |
196 |
226,685 |
|
Addition |
22,104 |
139 |
22,243 |
|
Reassessment of existing lease contracts |
31,297 |
5 |
31,302 |
|
Depreciation |
–52,726 |
–118 |
–52,844 |
|
Impairment |
–37 |
– |
–37 |
|
Reversal of impairment |
508 |
– |
508 |
|
Addition to scope of consolidation |
5,756 |
– |
5,756 |
|
Disposal from scope of consolidation |
–4,025 |
– |
–4,025 |
|
Translation differences |
– |
–6 |
–6 |
|
Net carrying amount as at 31.12.2023 |
229,366 |
217 |
229,583 |
|
Addition |
19,055 |
88 |
19,143 |
|
Reassessment of existing lease contracts |
28,905 |
–7 |
28,898 |
|
Depreciation |
–52,718 |
–117 |
–52,834 |
|
Impairment |
–98 |
– |
–98 |
|
Reversal of impairment |
49 |
– |
49 |
|
Addition to scope of consolidation |
4,376 |
– |
4,376 |
|
Translation differences |
– |
1 |
1 |
|
Net carrying amount as at 31.12.2024 |
228,936 |
182 |
229,118 |
Lease liabilities
|
in thousand CHF |
2024 |
2023 |
|
Net carrying amount as at 1 January |
236,041 |
233,178 |
|
Addition |
19,143 |
22,243 |
|
Reassessment of existing lease contracts |
28,902 |
31,299 |
|
Interest expense on lease liabilities |
3,116 |
2,972 |
|
Repayment of lease liabilities (including interest) |
–55,691 |
–55,173 |
|
Addition to scope of consolidation |
4,376 |
5,756 |
|
Disposal from scope of consolidation |
– |
–4,228 |
|
Translation differences |
1 |
–6 |
|
Net carrying amount as at 31 December |
235,887 |
236,041 |
|
– of which current lease liabilities |
52,693 |
50,484 |
|
– of which non-current lease liabilities |
183,195 |
185,557 |
Leases recognised in profit or loss
|
in thousand CHF |
2024 |
2023 |
|
Rental income from operating leases (included in other income) |
551 |
1,690 |
|
Short-term lease expense (included in other operating costs) |
–1,494 |
–1,282 |
|
Low-value lease expense (included in other operating costs) |
–731 |
–51 |
|
Variable lease expense (included in other operating costs) |
–4,339 |
–4,045 |
|
Depreciation of right-of-use assets |
–52,834 |
–52,580 |
|
Impairment of right-of-use assets |
–98 |
–37 |
|
Reversal of impairment of right-of-use assets |
49 |
508 |
|
Interest expense on lease liabilities |
–3,116 |
–2,951 |
The total cash outflow for leases including short-term leases, leases of low-value-assets and variable lease expenses was CHF 62.3 million (previous year: CHF 60.3 million).
Maturity profile of undiscounted lease liabilities
|
in thousand CHF |
2024 |
2023 |
|
Up to 3 months |
13,922 |
13,477 |
|
In 3 to 12 months |
41,317 |
39,648 |
|
In 2 years |
49,867 |
47,719 |
|
In 3 years |
40,933 |
39,588 |
|
In 4 to 5 years |
56,091 |
57,021 |
|
In 6 to 10 years |
38,745 |
43,829 |
|
In more than 10 years |
4,520 |
5,003 |
|
Total future cash flows from undiscounted lease liabilities |
245,395 |
246,284 |
Possible future cash outflows related to extension options in an amount of CHF 213.8 million (previous year: CHF 192.6 million) are not included in lease liabilities because it is not reasonably certain that these options will be exercised.
The cash outflows for variable lease expenses in 2025 is expected to be similar to the amount recognised in 2024.
Galenica has entered into various lease contracts that have not yet commenced as at 31 December 2024. The future lease payments for these non-cancellable lease contracts amount to CHF 40.1 million (previous year: CHF 40.3 million).
Accounting principles leases
Galenica has lease contracts for furniture, vehicles and a large number of contracts for real estate, mainly store locations, which include fixed rental payments and variable sales-based components. The significant majority of these lease contracts concerns locations of the pharmacies in the operating segment Products & Care.
Galenica determines the lease term as the non-cancellable term of the lease, together with any periods covered by an option to extend the lease if it is reasonably certain at inception of the contract to be exercised. Galenica has the option, under some of its leases, to lease the assets for additional terms of several (three, five or more) years. Galenica applies judgement in evaluating whether it is reasonably certain to exercise the option to renew. In doing so, Galenica considers all relevant factors including economic incentives. Galenica reassesses the lease term if there is a significant event or change in circumstances that is within its control and affects its ability to exercise, or not to exercise, the option to renew (e.g. a change in business strategy of the underlying asset).
Galenica uses the recognition exemptions for lease contracts that have a lease term of 12 months or less and do not contain a purchase option (short-term leases), and lease contracts for which the underlying asset is of low value (low-value assets).