ÖBB Annual Report 2023

235 Consolidated Financial Statements Österreichische Bundesbahnen-Holding Aktiengesellschaft Consolidated Financial Statements | Group Management Report 17 In the current reporting year, an indication of a possible impairment of assets was identified at the Postbus CGU due to sharp cost increases and inadequate value hedges in the contracts, which led to a short-term deterioration in the operating result, which is why an impairment test was conducted. In the reporting year 2022, no indication of a possible impairment of assets was identified in any CGU of the ÖBB- Personenverkehr subgroup, which is why no impairment test was conducted. Cash-generating units of the Rail Cargo Group The following CGUs were determined for the Rail Cargo Group subgroup on the basis of the business model, business management and the existence of independent cash flows: “Cargo”, “Intermodal” and “TS-HU”. The freight wagons and the other assets were allocated to the CGUs in accordance with their use. The Cargo CGU contains goodwill, which is the reason for the mandatory annual impairment test being conducted. In the ÖBB Group, the impairment test for this CGU was conducted on the reporting date of 31.12.2023. In the current reporting year, the development of container traffic in connection with the global economy at the Intermodal CGU and the planned sale of a minority interest at the TS-HU CGU also identified an indication of a possible impairment of assets, which is why an impairment test was carried out in each case. In the previous reporting year 2022, the Intermodal CGU was also recognised as an indicator of possible impairment and an impairment test was therefore conducted. Cash-generating units of the ÖBB-Infrastruktur subgroup No indicators of possible impairment were identified for either 2022 or 2023 for a CGU, which is why no impairment tests were conducted. There is currently no indication of impairment for the CGU Rail Infrastructure due to the following preamble to the grant agreements pursuant to Section 42 of the Federal Railways Act: “ÖBB-Infrastruktur AG is a railway infrastructure company whose tasks are in the public interest and are defined in more detail in Section 31 of the Federal Railways Act. The basis for the financing of the company is Section 47 Federal Railways Act, according to which the federal government must ensure that ÖBB-Infrastruktur AG has the funds necessary to fulfil its tasks and maintain its liquidity and equity, insofar as the tasks are covered by the business plan pursuant to Section 42 (6) Federal Railways Act. The commitment regulated by the federal government in this provision is implemented specifically in the grant agreements pursuant to Section 42 (1) and (2) Federal Railways Act. It is the understanding of the contracting parties that the objective of the grant agreements, irrespective of the respective term of the contract, is to permanently ensure the value of the assets of the ÖBB-Infrastruktur AG subgroup used for the tasks pursuant to Section 31 Federal Railways Act, which also complies with the legal mandate of the Federal Railways Act”. More detailed information is provided in the chapter “Transactions and performance relationships with the Republic of Austria, framework plan for infrastructure investments and the liability of the Republic of Austria” in Note 32. Parameters of the impairment tests A weighted average cost of capital customary in the market is used for each CGU for discounting purposes, which reflects the interest rate demanded by the capital market for the provision of debt and equity capital vis-à-vis the CGUs. Specific risks are taken into account through premiums or discounts . The cost of capital of the CGUs includes, for example, pro rata markups for cash flow risks arising outside Germany if their share of the total cash flow of the CGUs is material. In the ÖBB Group, business plans are to be prepared for a period of six years – due to the need for a six-year framework plan pursuant to the provisions of Section 42 (7) Federal Railways Act. The six-year business plans are used for the impairment test. In addition, long-term effects from various developments, projects and measures are taken into account in order to determine a sustainable result level for the perpetual annuity. The cash flow projections after the planning period (perpetuity approach) were based on the corresponding growth rates and accumulation rates for each CGU. The cash flow assumptions for the impairment tests were taken from the calculations of the business plans. The long-term return was fixed independently of the CGU at a return equivalent to the cost of capital. Based on the assumption that the long-term growth of the CGUs is orientated towards the ECB’s inflation target of 2%, growth was taken as 0% to 2.0% (py: 2.0% to 2.1%). The accumulation rates required for the assumed growth were determined using the Gordon / Shapiro growth model. This model methodically maps the dependency of growth, the sustainably achievable return and the reinvestment required.