Annual Report 2022

9. Leases

9.1 Right-of-use assets

The right-of-use assets are split as follows:

CHF million

 

Buildings

 

Vehicles

 

Other fixed assets

 

2021
Total

Right-of-use assets gross as at January 1, 2021

 

548.8

 

18.4

 

4.0

 

571.2

Accumulated depreciation

 

– 151.8

 

– 8.8

 

– 1.8

 

– 162.4

Right-of-use assets net as at January 1, 2021

 

397.0

 

9.6

 

2.2

 

408.8

Additions

 

82.3

 

6.3

 

0.9

 

89.5

Depreciation of the period

 

– 69.3

 

– 6.1

 

– 1.0

 

– 76.4

Impairments

 

– 2.1

 

–

 

–

 

– 2.1

Decreases in scope

 

– 3.2

 

– 0.2

 

–

 

– 3.4

Transfers

 

18.2

 

–

 

–

 

18.2

Currency translation

 

1.5

 

– 0.1

 

– 0.1

 

1.3

Other

 

0.2

 

–

 

–

 

0.2

Right-of-use assets net as at December 31, 2021

 

424.6

 

9.5

 

2.0

 

436.1

Retirements1

 

15.0

 

4.4

 

–

 

19.4

CHF million

 

Buildings

 

Vehicles

 

Other fixed assets

 

2022
Total

Right-of-use assets gross as at January 1, 2022

 

637.8

 

19.8

 

4.8

 

662.4

Accumulated depreciation

 

– 213.2

 

– 10.3

 

– 2.8

 

– 226.3

Right-of-use assets net as at January 1, 2022

 

424.6

 

9.5

 

2.0

 

436.1

Additions

 

47.7

 

5.6

 

1.8

 

55.1

Depreciation of the period

 

– 68.5

 

– 5.5

 

– 1.2

 

– 75.2

Impairments

 

– 1.8

 

–

 

–

 

– 1.8

Decreases in scope

 

– 9.7

 

– 0.4

 

–

 

– 10.1

Transfers

 

–

 

–

 

–

 

–

Currency translation

 

– 6.9

 

– 0.2

 

– 0.1

 

– 7.2

Other

 

–

 

0.1

 

–

 

0.1

Right-of-use assets net as at December 31, 2022

 

385.4

 

9.1

 

2.5

 

397.0

Retirements1

 

20.1

 

5.5

 

1.1

 

26.7

1

This position represents the impact of expired leases. Expired leases have no impact on the net book value of the right-of-use assets, but reduce historical costs and accumulated depreciation.

The position “additions” includes new contracts, extensions and increases in scope of existing contracts. The position “decreases in scope” includes agreed upon (early) terminations, termination options reasonably certain to be exercised and decreases in the leased asset. Right-of-use assets shown in buildings contain in particular leases of external warehouses, retail stores and offices.

The additions in the current year are mainly caused by new openings of retail stores and extensions of already existing leases for external warehouses, retail stores and offices like in prior year.

The position “transfers” (CHF 18.2 million) comprised of balance sheet reclassifications in prior year. CHF 14.4 million were related to reclassifications from intangible assets into right-of-use assets and CHF 3.8 million to reclassifications from property, plant and equipment into right-of-use assets.

9.2 Other lease information

CHF million

 

2022

 

2021

Interest expenses (included in financial expenses)

 

13.3

 

14.1

Expenses relating to short-term leases (included in operating expenses)1

 

8.0

 

3.4

Expenses relating to variable lease payments (included in operating expenses)2

 

27.7

 

21.6

Total cash outflow for leases (including interest)

 

88.7

 

87.1

Income from subleasing

 

7.8

 

7.6

1

Expenses related to short-term leases of low value assets are shown in the position “expenses relating to short-term leases”.

2

This position only includes variable lease payments, which are not yet included in the lease liabilities.

Some store leases contain variable payment terms that are linked to sales. The applied percentage to sales varies case by case and can reach up to 100 percent. Variable lease payments also consist of incidental leasing expenses. Variable lease payments are recognised in operating expenses in the period in which the condition that triggers those payments occurs.

In few instances, the Lindt & Sprüngli Group subleases leased assets. Subleasing mainly occurs for buildings such as offices or warehouses. Predominantly, the subleases classify as operating leases. In case of an operating lease the right-of-use asset of the head lease is not derecognized. In case of a financial lease the right-of-use asset of the head lease is derecognized and a lease receivable against the sublessee is recognized.

Several leasing contracts across the Lindt & Sprüngli Group include extension and termination options. The majority of these options are exercisable only by the Lindt & Sprüngli Group and not by the respective lessor. These options allow the Lindt & Sprüngli Group both planning certainty as well as flexibility. In case the exercise of such an option is reasonably certain, they are considered in the expected lease term.

The maturity of lease liabilities amounting to CHF 430.1 million as at December 31, 2022, (CHF 469.0 million in prior year) is shown in note 4, lease commitments in note 29.