3.4 Leases
Right-of-use assets CHF million | 2024/25 | |||||
Buildings | Vehicles and other assets | Total | ||||
Cost | ||||||
Balance April 1 | 317.0 | 9.1 | 326.1 | |||
Changes through business combinations | 1.3 | 1.3 | ||||
Additions | 49.0 | 1.7 | 50.7 | |||
Disposals | (16.8) | (0.6) | (17.4) | |||
Exchange differences | (11.0) | (0.4) | (11.3) | |||
Balance March 31 | 339.5 | 9.8 | 349.3 | |||
Accumulated depreciation | ||||||
Balance April 1 | (52.8) | (3.7) | (56.5) | |||
Depreciation | (71.7) | (2.5) | (74.2) | |||
Disposals | 16.8 | 0.6 | 17.4 | |||
Exchange differences | 1.9 | 0.1 | 2.0 | |||
Balance March 31 | (105.7) | (5.5) | (111.3) | |||
Net book value | ||||||
Balance April 1 | 264.2 | 5.4 | 269.6 | |||
Balance March 31 | 233.7 | 4.3 | 238.0 | |||
Right-of-use assets CHF million | 2023/24 | |||||
Buildings | Vehicles and other assets | Total | ||||
Cost | ||||||
Balance April 1 | 328.2 | 9.7 | 337.9 | |||
Changes through business combinations | 6.0 | 6.0 | ||||
Additions | 50.7 | 1.8 | 52.5 | |||
Disposals | (61.0) | (2.2) | (63.2) | |||
Exchange differences | (6.9) | (0.2) | (7.1) | |||
Balance March 31 | 317.0 | 9.1 | 326.1 | |||
Accumulated depreciation | ||||||
Balance April 1 | (46.0) | (3.4) | (49.5) | |||
Depreciation | (74.4) | (2.6) | (77.0) | |||
Disposals | 61.0 | 2.2 | 63.2 | |||
Exchange differences | 6.6 | 0.2 | 6.8 | |||
Balance March 31 | (52.8) | (3.7) | (56.5) | |||
Net book value | ||||||
Balance April 1 | 282.2 | 6.3 | 288.4 | |||
Balance March 31 | 264.2 | 5.4 | 269.6 | |||
Lease liabilities CHF million | 2024/25 | 2023/24 | ||
Balance April 1 | 279.1 | 296.9 | ||
Changes through business combinations | 1.3 | 6.0 | ||
Additions | 50.7 | 52.5 | ||
Interest expense | 7.2 | 6.7 | ||
Payments | (80.4) | (81.7) | ||
Exchange differences | (9.2) | (1.2) | ||
Balance March 31 | 248.6 | 279.1 | ||
thereof short-term | 68.7 | 74.3 | ||
thereof long-term | 179.9 | 204.8 |
The maturity analysis of lease liabilities is disclosed in Note 4.7
Lease disclosures CHF million | 2024/25 | 2023/24 | ||
Expenses relating to short-term leases | 12.9 | 9.4 | ||
Expenses relating to leases of low-value assets (excluding short-term leases of low-value assets) | 0.0 | 0.3 | ||
Expenses relating to variable lease payments | 5.7 | 6.0 |
The total cash outflow for leases in the financial year 2024/25 amounted to CHF 99.0 million (prior year CHF 97.4 million). The future lease payments relating to variable lease payments amount to CHF 5.7 million (prior year CHF 6.0 million).
Accounting policies
The group leases buildings for retail stores as well as for office, laboratory, manufacturing and storage use. The leasing terms vary significantly across countries. The leases of office space typically run for a period of up to 10 years, and leases of retail stores typically for a period of 3 to 5 years. Leases of vehicles and other assets have an average lease term of 3.6 years. Some leases include an option to renew the lease for an additional period after the end of the contract term.
The Group recognizes a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, and, subsequently at cost less accumulated depreciation and impairment losses and also includes adjustments for certain remeasurements of the lease liability.
The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date and are discounted using the Groupʼs incremental borrowing rate if the interest rate implicit in the lease is not readily determinable. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. It is remeasured when there is a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised.
Accounting judgements and estimates
The Group uses judgement to determine the lease term for some lease contracts which include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term which significantly affects the amount of lease liabilities and right-of-use assets recognized. Extension options and termination options are re-assessed only when a significant event or change in circumstances occurs that is within the control of the Group and affects whether it is reasonably certain to exercise an option.