Notes to the consolidated financial statements: principles

1 Accounting and valuation principles

General disclosures

Repower Group prepares its financial statements in accordance with the entire Accounting and Reporting Recommendations (Swiss GAAP FER), providing a true and fair view of the assets, liabilities, financial position and profit or loss of the Repower Group.

In individual cases roundings can mean that figures in this report do not add up to the exact total specified, and that the specified percentages do not exactly result from the stated figures.

The 2024 consolidated financial statements of the Repower Group were authorised by the board of directors on 4 April 2025 and are still subject to the approval of the annual general meeting on 14 May 2025.

Review of Repower’s accounting standards

The cash flow statement is now calculated on the basis of the net cash and cash equivalents fund (Swiss GAAP FER 4 / 3ff.). In addition to the cash and cash equivalents funds previously used, this fund also includes short-term loans arising from overdrafts that are used as part of an agreed overdraft facility. Net cash and cash equivalents give a more realistic picture of the financial situation.

However, as of the balance sheet date and in the previous year, there were no significant short-term loans to be taken into account, meaning that no adjustment of the previous year’s comparative figures was made.

The Swiss GAAP FER 28 Government Grants recommendation was applied for the first time this financial year. This did not result in any changes in accounting treatment. However, the accounting principles relevant for Repower are now detailed in the Accounting and valuation principles section.

Introduction of the Global Anti-Base Erosion (GloBE) Model Rules

The Global Anti-Base Erosion (GloBE) Model Rules published by the OECD stipulate a minimum tax of 15 per cent per country (Pillar Two). The Repower Group, with its national companies in Italy, Germany and Switzerland, has examined the extent to which it is subject to the Pillar Two income tax requirement. Further explanations of the effects of these rules, particularly in relation to Switzerland and the introduction of the Qualified Domestic Minimum Top-up Tax (QDMTT) from 1 January 2024, can be found in Note 14 Income taxes.

2 Principles of consolidation

Scope of consolidation

The present consolidated financial statements encompass the financial statements of Repower AG and all investments where Repower holds, directly or indirectly, more than 50 per cent of the votes or can exercise control in some other way. These investments are fully consolidated. Associates and joint ventures are included in the financial statements in accordance with the equity method (share of equity).

List of interests

Fully consolidated companies

Joint ventures carried at equity

Associates carried at equity

The stated shareholdings represent the group shares attributable to the parent company Repower AG, Brusio.

All subsidiaries, associates and joint ventures with the exception of Grischelectra AG, which closes its accounts on 30 September, close their accounts at the end of the calendar year.

Ovra electrica Ferrera SA, Trun, is a power plant company in which the local municipality holds a 51 per cent stake. The Repower Group bears full operating responsibility for this company via Repower AG, and sells 100 per cent of the energy generated on the market. The Repower Group thus exercises overall control and Ovra electrica Ferrera SA is fully consolidated.

Under the contractual arrangements governing the interest in Elettrostudio Energia S.r.l., Grischelectra AG, Resol Ciminna S.r.l. and Terra di Conte S.r.l., all relevant decisions on these companies must be made unanimously by the parties involved. None of the parties involved can control the companies. They therefore constitute joint ventures that Repower values at equity.

Corporate transactions

In 2024, a number of corporate transactions resulted in changes to the scope of consolidation, affecting the consolidated balance sheet and the cash flow statement. Selected matters are summarised below and then explained in more detail.

A total of CHF 10,111 thousand was paid out for the acquisition of additional shares in Erreci S.r.l. and Erreci Impianti S.r.l. and in Kraftwerk Morteratsch AG. CHF 6,058 thousand of this fell to Erreci S.r.l. and Erreci Impianti S.r.l. (where the interest was increased from 30 to 70 per cent in each case) and CHF 4,053 thousand to Kraftwerk Morteratsch AG (where the interest was increased from 10 to 100 per cent). Control over the entities was acquired through these transactions. The payments are recognised in the cash flow statement as investments in group companies (less cash and cash equivalents acquired). Also recognised were additions to goodwill of CHF 15,394 thousand (Erreci companies) and CHF 1,416 thousand (KW Morteratsch AG).

The acquisition of additional shares in Renewable S.p.A. led to the recognition of goodwill of CHF 16,046 thousand and the disposal of minority interests of CHF 44,642 thousand. The associated payments of CHF 60,507 thousand are recognised in the cash flow statement under the sale of minority interests.

The establishment of Madrisa Solar AG resulted in payments of CHF 4,400 thousand which, together with purchase price payments of CHF 1,522 thousand for the interest in Elettrostudio Energia S.r.l., acquired already last year, were recognised as payments for additions of investments in associates and joint ventures.

Establishment of new entities

In 2024, Repower Moesano SA, a Repower subsidiary with its registered office in Grono, was established. Starting in 2027 it will supply electricity to the municipalities of Buseno and Cama, as well as to Media Mesolcina Energia (the electricity company supplying Grono, Lostallo and Soazza). The municipalities have the option of investing in the company. This represents an expansion of Repower’s supply area and reinforces its long-term energy partnership in the Moesa region.

Repower, EKZ and the municipality of Klosters founded Madrisa Solar AG in equal shares. Repower recognises this entity as an associate. Repower made a cash contribution of CHF 4,400 thousand recognised under payments for additions of investments in associates and joint ventures in cash flow from investing activities. From 2025, the alpine solar installation, located over 2,000 metres above sea level, will generate around 17 GWh of power a year and supply more than 3,500 households. It involves total gross investment of around CHF 70 million. The electricity generated will be used by EKZ and the Klosters-Madrisa cableways. The project will contribute to the promotion of renewables and help assure the supply of electricity in winter.

In 2024, Repower established a subsidiary called Resol Brullo S.r.l. to construct a photovoltaic installation in Sicily with a capacity of 10 MW. The project is currently in the approval phase.

Acquisition of control of Erreci S.r.l. and Erreci Impianti S.r.l.

In the first half of 2024, Repower Italia S.p.A. acquired a further 40 per cent of the shares in Erreci S.r.l. and Erreci Impianti S.r.l., as a result of which Repower Italia S.p.A. now holds 70 per cent of the shares and has gained control. Both companies operate in the Market Italy segment and specialise in the development and construction of photovoltaic systems and in energy trading. Previously, they were carried at equity as associates.

The most important components of the balance sheets of the Erreci companies acquired at the time of initial consolidation on 1 January 2024 are shown in the following table:

The acquisition of control gives rise to goodwill of CHF 12,297 thousand, which results from the comparison of the purchase price of CHF 15,945 thousand and the acquired pro rata net assets of 40 per cent or CHF 3,648 thousand. Goodwill is amortised over 5 years from the date of acquisition and reported under intangible assets.

The goodwill resulting from the initial consolidation of the Erreci companies, which was previously recognised as part of the investments in associates and joint ventures, amounts to CHF 3,097 thousand and is now allocated to intangible assets. It is amortised over its remaining useful life based on an original useful life of 5 years.

The portion of the difference between the current values and the carrying amounts attributable to the previously held investment was recognised in retained earnings in the amount of CHF 299 thousand.

Minority interests of CHF 2,736 thousand were recognised with the acquisition.

The purchase price of CHF 15,945 thousand contains an earn-out component of CHF 1,748 thousand that is not due until a later date. The components of the purchase price that were cash-relevant in 2024, minus the cash and cash equivalents acquired, are recognised at a value of CHF 6,058 thousand as investments in group companies (less cash and cash equivalents acquired).

The net sales of Erreci S.r.l. and Erreci Impianti S.r.l. totalled CHF 23,977 thousand in 2024 and were included in full in the consolidated income statement.

Acquisition of control of Kraftwerk Morteratsch AG

On 16 December 2024, Repower acquired the remaining 90 per cent of  shares in Kraftwerk Morteratsch AG from the previous majority shareholder Reichmuth Infrastructure, thereby becoming the sole owner. Kraftwerk Morteratsch AG, which was previously recognised as a joint venture at equity, is fully included in the consolidated financial statements from this date.

Repower acquired the company for a total of CHF 4,966 thousand. This amount consists of CHF 2,699 thousand for the acquisition of the shares and CHF 2,267 for the takeover of the previous loan to Kraftwerk Morteratsch AG owned by the transferring shareholder. The acquisition of the company involves in particular the transfer to Repower of tangible assets with a value of CHF 7,325 thousand and non-current financial liabilities in the amount of CHF 6,874 thousand, including the loan to Kraftwerk Morteratsch AG. The resulting goodwill of CHF 1,416 thousand is subject to scheduled amortisation over a useful life of 12 years.

The components of the purchase price that were cash-relevant in 2024, minus the cash and cash equivalents acquired, are recognised at a value of CHF 4,053 thousand as investments in group companies (less cash and cash equivalents acquired).

The net sales of Kraftwerk Morteratsch AG amounted to CHF 1,239 thousand up to the time of its acquisition and CHF 4 thousand after the acquisition and its inclusion as a fully consolidated company.

Acquisition of an additional 35 per cent in Repower Renewable

On 14 November 2024, the Repower Group acquired the remaining 35 per cent of the shares in Repower Renewable S.p.A. from Omnes Capital; the Repower Group now owns 100 per cent of the company. The Repower Renewable Group operates and develops wind, solar and hydropower assets in Italy.

The costs of acquiring the additional 35 per cent of the shares came to CHF 60,688 thousand, of which CHF 60,507 thousand became cash-relevant in 2024. This was recognised in the cash flow statement under the purchase of minorities in cash flow from investing activities. Goodwill of CHF 16,046 thousand resulting from the transaction represents the difference between the acquisition costs and the outgoing minority interests of CHF 44,642 thousand recognised in the consolidated statement of changes in equity under the purchase / sale of minority interests. This goodwill is subject to scheduled amortisation over a useful life of 15 years.

Increase in the capital of Roma Gas & Power S.r.l.

In both 2023 and 2024, Repower unilaterally increased the capital of Roma Gas & Power S.r.l., thereby acquiring further shares in the company. These measures led to an increase in Repower’s interest in the company, with the result that it now holds 100 per cent of the shares. Apart from a reclassification within equity between the minority and majority shareholders of the Repower Group, the transaction had no effect on Repower’s group balance sheet

Mergers and liquidations

In 2024, Roma Gas & Power S.r.l. and REV S.r.l. were merged into Repower Vendita Italia S.p.A. The merger of Erreci Impianti S.r.l. with Erreci S.r.l. also took place.

In 2024, the winding-up of Alvezza SA was completed successfully.

Acquisition of Tre Rinnovabili S.r.l.

On 5 November 2024, Repower Renewable acquired the entire shares of Tre Rinnovabili S.r.l., a wind farm project in Sicily with a capacity of 29.9 MW. Since the transaction essentially entailed the acquisition of a power generation asset, it is recognised as an asset acquisition. The main things recognised on the consolidated balance sheet were assets under construction of CHF 4,277 thousand and deferred tax liabilities of CHF 1,090 thousand.

Consolidation method

Capital consolidation is done in accordance with the purchase method. When an entity is purchased its assets and liabilities as of the date of acquisition are revalued in accordance with uniform group principles. Any remaining goodwill (the difference between the purchase price and the share of equity) is capitalised and amortised over five years or a maximum of 20 years. Assets and liabilities and income and expenses at fully consolidated entities are integrated in their entirety in the consolidated financial statements. Minority interests in the equity and minority interests in the profits of fully consolidated entities are stated separately.

Intragroup receivables and liabilities, income and expenses and investments are netted out and interim gains eliminated. Investments in associates and joint ventures are accounted for using the equity method.

Conversion of foreign currencies

Each group company determines the functional currency in which it draws up its individual financial statements. Company financial statements in foreign currencies are converted as follows: assets and liabilities at the closing rate on the balance sheet date, equity at historical rates. The income and cash flow statements are converted at the average rate for the year. The resulting translation differences are recognised directly in equity. On the disposal of entities, the translation differences attributable to them are reclassified to profit or loss.

Foreign currency transactions contained in the individual financial statements of consolidated entities are converted at the relevant daily rate, and foreign currency balances are converted on the closing date at the closing rate on the balance sheet date. The resulting differences in rates are recognised in profit or loss.

The following exchange rates were used for the most important foreign currency:

Cash flow statement

The net cash and cash equivalents fund forms the basis of the consolidated cash flow statement. In addition to cash and cash equivalents, this fund also includes short-term loans arising from overdrafts that are used as part of an agreed overdraft facility. Cash flow from operating activities is calculated by the indirect method.

3 Accounting and valuation principles

Tangible assets

Tangible assets are initially recognised at the lower of cost (acquisition or manufacturing cost). Repower does not capitalise borrowing costs. Self-constructed tangible assets are to be capitalised if the expenses incurred can be individually recognised and measured. Own costs capitalised are measured on the basis of hours actually incurred, which are multiplied by hourly rates calculated for the current financial year. For the purposes of subsequent measurement, Repower does scheduled straight-line amortisation over the expected useful life. Estimated useful lives are calculated in accordance with the recommendations of the Association of Swiss Electricity Companies and are within the following ranges for each category:

Government grants

Grants and contributions from public funds are recognised if there is sufficient certainty that the associated conditions will be met and the value can be reliably estimated. Government grants related to assets are offset against the corresponding acquisition or production costs of the asset. This reduces the depreciation basis and results in correspondingly lower depreciation over the useful life of the asset.

Intangible assets

Intangible assets are initially recognised at the lower of cost (acquisition or manufacturing cost). Provided the prerequisites for capitalisation under FER 10 / 4 are met, intangible assets generated internally are capitalised. Amortisation is done on a straight-line basis. The estimated useful lives for the individual categories are within the following ranges:

Impairment

Assets are tested for impairment on every balance sheet date. If there is evidence of impairment, an impairment test is carried out to calculate the recoverable value. The recoverable value is the higher of net selling price and value in use. If the carrying amount exceeds the recoverable value, an adjustment is made in the income statement by way of unscheduled amortisation. If there is a material improvement in the facts considered in the course of calculating the recoverable value, an impairment recognised in earlier reporting periods will be fully or partially reversed in the income statement, with the exception of goodwill.

Investments in associates and joint ventures

Investments in associates and joint ventures are recognised using the equity method, in other words according to the share of equity. Any goodwill is a component of the interest in the entity. The goodwill is amortised on a straight-line basis and thus flows directly into the Repower Group’s consolidated income statement via earnings from associates and joint ventures.

Non-current financial assets

Non-current financial assets comprise financial investments, loans receivable and fixed-term deposits. Investments, loans receivable and fixed-term deposits are recognised at cost less any impairment. Financial investments are investments that are not classified as an investment in subsidiaries, joint ventures or associates and that are intended to be held on a long-term basis. Items that are realised within 12 months of the balance sheet date are recognised as current financial assets on the balance sheet.

Deferred taxes

Deferred income taxes take into account temporary valuation differences between the assets and liabilities valued according to uniform group guidelines in accordance with Swiss GAAP FER compared with the values applicable under tax law. Tax loss carryforwards and interest carryforwards are recognised if they are likely to be offset against future profits for tax purposes.

Inventory

Inventories are goods used in the regular course of business for the purposes of disposal, manufacturing goods or providing services. They are initially recognised at the lower of cost (acquisition or manufacturing cost). The closing inventory is valued at the lower of average cost or net market price. Settlement discounts received are recognised as financial income.

Repower provides services for third parties. Only immaterial contracts are recognised under inventories recognised at acquisition or production cost.

Trade accounts receivable

Trade accounts receivable comprise receivables from business activities where the delivery or service has already been fulfilled but the debtor’s payment has not been received. Receivables are measured at nominal value taking due account of necessary impairment.

Other current and non-current receivables

Contracts that are material for Repower in the context of its service business are recognised under other receivables provided the criteria set out in Swiss FER 22 Long-Term Orders are met. They are recognised in proportion to revenue net of any amounts already invoiced and prepayments received. The percentage of completion for application of the percentage of completion method is calculated individually for each contract using the cost to cost method.

Other current and non-current receivables still include all other receivables. They are measured at nominal value taking due account of necessary impairment.

Prepaid expenses and accrued income / deferred income and accrued expenses

Prepaid expenses and accrued income / deferred income and accrued expenses are designed to ensure that assets and liabilities at the balance sheet date are presented correctly and that income and expense are recognised on an accrual basis in the income statement.

In particular, goods and services delivered or received but not yet invoiced are recognised in prepaid expenses and accrued income / deferred income and accrued expenses.

Current financial assets

The balance sheet item current financial assets comprises loans receivable and fixed-term deposits, derivatives and other securities that are realised within 12 months of the balance sheet date or held for trading. Loans receivable and fixed-term deposits are recognised at cost less any impairment. Derivatives are recognised at current values. Other securities that are not intended to be held long term and that are recognised as current financial assets are measured at current values if available. If no current value is available, they are recognised at no higher than their acquisition costs less any impairments.

Replacement values of held-for-trading positions

Contracts in the form of forward transactions (forwards and futures) conducted with the intention of achieving a trading profit or margin are treated as derivative financial instruments and recognised as held-for-trading positions or replacement values. On the balance sheet date, all open derivative financial instruments from energy trading transactions are measured at fair value through profit or loss, and the positive and negative replacement values are recognised under assets and liabilities. Positive replacement values represent receivables. Negative replacement values represent liabilities. The replacement value is the difference in price compared to the closing price.

The open contracts are measured on the basis of market data from electricity exchanges (e.g. EEX Leipzig). For contracts for which no liquid market exists, measurement is based on a valuation model.

Current transactions are offset at positive and negative replacement value if the respective contract terms provide for this and the intention to offset exists and is legally permitted.

Realised and unrealised income from held-for-trading positions is recognised as net sales from goods and services.

Cash and cash equivalents

The cash and cash equivalents item comprises cash, sight deposits at banks and other financial institutions (e.g. post) and cash equivalents, provided they are held as a cash reserve, are highly liquid and convertible to cash at short notice, and are subject to only negligible fluctuations in value. Cash equivalents have a maximum residual term of 90 days at the balance sheet date.

Provisions

A provision is a probable liability on the basis of an event before the balance sheet date; the amount of the liability and / or the date on which it will fall due is uncertain but can be estimated. Provisions are recognised for actual and statutory obligations and for impending risks and losses. Existing provisions are remeasured on every balance sheet date. Provisions are divided into current provisions (due within twelve months) and non-current provisions (due after twelve months). If there is a material time factor involved, the provision is discounted.

Financial liabilities

Financial liabilities comprise both financing activities and derivatives, and are recognised at nominal or current values. Any differences between the acquisition cost and the redemption value of bonds or registered bonds are amortised on a straight-line basis over the term of the instruments. Interest accrued but not yet charged is accrued and recognised as deferred income and accrued expenses on the balance sheet date. Depending on the term, it is recognised under non-current or current financial liabilities.

Other non-current liabilities

Other non-current liabilities comprise all liabilities not belonging to the other categories that are not due within twelve months after the balance sheet date. In particular, under this item Repower recognises received connection fees and grid cost contributions, which are charged to profit or loss over a period of 35 years.

Trade accounts payable

Trade accounts payable are current liabilities with a remaining term of less than twelve months arising in particular from deliveries, work performances, services and lease agreements. They are recognised at nominal values.

Other current liabilities

This item comprises all other current liabilities that cannot be assigned to payables from goods and services. They are recognised at nominal values.

Pension provisions

On the balance sheet date, employees of Repower AG in Switzerland were members of the PKE Vorsorgestiftung Energie pension fund. This is a legally independent pension fund operating as a defined contribution plan in accordance with the Federal Law on Occupational Pensions for Old Age, Survivors and Disability (BVG). Pension benefit obligations are measured and recognised in accordance with Swiss GAAP FER 16. The economic impacts of pension institutions on the entity are either economic benefits or economic obligations. Economic benefits and economic obligations are evaluated at the balance sheet date and recognised in the entityʼs financial statements. Employer contribution reserves are recognised at nominal or present value as financial assets.

A peculiarity of Italian law is the payment of severance pay. This corresponds to around one monthʼs pay for every year of employment, and must be paid in all cases when an employment relationship is terminated. The provision for this obligation is calculated according to a recognised method specific to the country, and the change is recognised in personnel expenses.

Cash flow hedges

Derivative transactions entered into for the purpose of hedging cash flows with a high probability of occurrence are not recorded on the balance sheet, but are disclosed in the notes.

Leases

A lease is an agreement whereby certain goods are ceded for the use of the lessee in return for a payment. A distinction is made between finance and operating leases. A finance lease is defined as a lease that transfers all material risks and rewards of ownership to the lessee. Otherwise the lease is deemed to be an operating lease. The asset leased under a finance lease is recognised as tangible assets and financial liabilities. Lease instalments paid are apportioned between the finance charge and the reduction in the outstanding liability. Assets leased under operating leases are not recognised on the balance sheet. Paid and received leasing instalments are recognised in the period in which they occur.

Off-balance-sheet business

Contingent assets and liabilities are measured at the balance sheet date and disclosed in the notes. If an outflow of funds without a simultaneous usable inflow of funds is probable and estimable, a corresponding provision is recognised.

Transactions with related parties

Related parties (natural persons and legal entities) are parties which can directly or indirectly exert a significant influence on the groupʼs financial and operational decisions. Organisations that for their part are directly or indirectly controlled by the same related parties are likewise deemed to be related. All material transactions and resulting balances or liabilities vis-à-vis related parties are disclosed in these consolidated financial statements.