Notes to the consolidated financial statements: notes

1 Net sales from goods and services

Revenue from the delivery of electricity and other goods is recognised as net sales from goods and services as soon as the delivery has been made and the benefits, risks and powers of disposal have been transferred to the purchaser. Revenue from services is recognised in the period in which the services are rendered.

Net sales from goods and services are stated exclusive of sales tax based on the amounts invoiced for these goods and services.

Net revenue from energy business includes both realised and unrealised revenue from held-for-trading positions. Energy derivatives used for hedging purposes or for proprietary trading remain off-balance sheet and are only recognised in the income statement upon delivery or settlement (see Note 26 and Note 35).

Declining energy prices have a curbing effect on net sales and energy procurement costs (see Note 6).

Revenues from services and other usual business activities include CHF 13,070 thousand from the disposal of photovoltaic projects of the newly-acquired Erreci companies.

2 Own costs capitalised

As in the prior year, own costs capitalised result mainly from services in connection with the renovation of power plants and investments in the Repower electricity grid.

3 Change in inventory of sales orders

The change in inventory of sales orders relates to work in progress in inventories. The balance reported for 2024 is mainly attributable to the Market Italy segment, while the balance reported for 2023 relates to the Market Switzerland and Market Italy segments in almost equal measure.

The changes in inventory in 2024 include income of CHF 10,809 thousand in the Market Italy segment relating to the capitalisation of connection systems within inventories (see Note 21). These systems are being built on behalf of and for Terna in connection with the construction of subsidiary Resol Ghislarengo S.r.l.’s photovoltaic installations. Given that costs of materials were recognised in the same amount (see Note 9), the production of these connection systems has no effect on group earnings.

4 Other operating income

Revenues from other operating activities in the Market Italy segment in 2023 includes a gain of CHF 7,347 thousand from the contribution of a photovoltaic project to the joint venture Resol Ciminna S.r.l.

5 Earnings from associates and joint ventures

In 2023, the line associates in the other segments and activities segment contains an impairment of CHF 1,061 thousand on the interest in EVUlution AG (see Note 17).

6 Energy procurement

Declining energy prices have a curbing effect on net sales and energy procurement costs (see Note 1).

Energy procurement consists of CHF 1,399 thousand (prior year CHF 1,206 thousand) in income from the release of provisions for long-term contracts; of this amount, income of CHF 509 thousand (prior year CHF 266 thousand) falls to the Market Switzerland segment and income of CHF 890 thousand (prior year CHF 940 thousand) falls to the Market Italy segment (see Note 28).

7 Concession fees

The reduction in other concession fees relates primarily to monetary compensation for free energy, the price of which is agreed with the municipalities. This change has a positive effect on the Market Switzerland segment.

8 Personnel expenses

The increase in the number of employees is due in particular to the acquisition of the business of Erreci S.r.l. and Erreci Impianti S.r.l. On the other hand, the accrued performance bonuses and incentives (see Note 33) were lower than in 2023, with the result that personnel expenses remained at almost the same level overall.

9 Materials and third-party services

Materials and third-party services contain expenses for maintaining and operating technical assets, external services for operational processes and the performance of services by third parties.

The increase in materials relates primarily to the Market Italy segment.

On behalf of Terna, connection systems are being produced for the photovoltaic systems of subsidiary Resol Ghislarengo S.r.l.; these systems will be transferred to Terna S.p.A. at the costs incurred. In 2024, costs of materials of CHF 10,809 thousand were incurred (see Note 3).

Erreci S.r.l. and Erreci Impianti S.r.l. have been included in the consolidated financial statements since 1 January. Their business includes, in particular, the development and delivery of solar energy systems, for which costs of materials of CHF 5,775 thousand were incurred.

10 Other operating expenses

The decline in losses on receivables relates primarily to the Market Italy segment.

The increase in other operating expenses in the Market Switzerland segment was essentially due to the recognition of provisions of CHF 7,880 thousand (see Note 28).

11 Depreciation and value adjustments of tangible assets

Depreciation and value adjustments of tangible assets include impairment losses of CHF 2,332 thousand (prior year CHF 12,708 thousand) in the Market Switzerland segment and CHF 0 thousand (prior year CHF 2,878 thousand) in the Market Italy segment (see Note 15).

12 Amortisation and value adjustments of intangible assets

Amortisation and value adjustments of intangible assets comprise impairment losses of CHF 0 thousand (prior year CHF 394 thousand) (see Note 16).

13 Net financial income

Substantial fixed-term deposits with a term of less than one year led to a year-on-year increase in interest income.

Currency translation in the amount of CHF 6,358 thousand (prior year CHF –12,822 thousand) stems primarily from Repower AG. A large proportion of this company’s assets and liabilities are denominated in euros, the main currency of the energy business. Exchange rate fluctuations between the euro and the Swiss franc can lead to currency gains or losses between the time these positions arise and the time they mature. Gains and losses from forward exchange transactions, which are recognised as currency derivatives in financial income and expenses, had a compensating effect, as in the previous year.

The prior-year impairment losses of CHF 2,259 thousand include the full write-down of the loan to EVUlution AG of CHF 2,252 thousand (see Note 18).

14 Income taxes

The reconciliation between the actual tax burden and the expected tax burden for the financial years ending on 31 December 2024 and 2023 is as follows:

The tax losses and interest carryforwards that have not yet been offset, as well as the deferred taxes capitalised and not capitalised on them, for the financial years ending 31 December 2024 and 2023, are as follows:

The capitalised deferred taxes on loss and interest carryforwards are included in the deferred tax assets and liabilities stated in Note 19.

Global minimum taxation

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 corresponding Ordinance on the Minimum Taxation of Large Corporate Groups (MindStV) came into force on 1 January 2024.

In the countries outside Switzerland in which Repower operates via its group companies, Italy and Germany, corresponding tax legislation, in force from 1 January 2024, has also been enacted. The Repower Group has evaluated the potential tax liabilities arising from implementation of the regulations.

The assessment of the potential impact on Pillar Two income taxes is based on current tax returns, country-by-country reporting (CBCR) and the financial reports of the entities included in the Group. Although the tax level of 15 percent for Switzerland was not reached when applying the safe harbour relief, the capital tax, also claimed as creditable tax under the GloBE Model Rules, will increase the effective tax rate to over 15 percent. The Group does not expect any significant effects from the minimum tax regulation.

15 Tangible assets

Land and buildings connected with power generation and grid facilities are stated under generation and grid assets.

The stated grants / contributions received are essentially contributions received in connection with the total modernisation of Robbia power plant.

The additions to assets under construction in 2024 include the power generation project of acquired entity Tre Rinnovabili S.r.l., recognised as an asset acquisition: assets under construction (CHF 4,277 thousand), deferred taxes (CHF 1,090 thousand) (see Note 19).

Impairment of tangible assets

In 2024 and 2023, impairments were recognised in the Market Switzerland segment, and in 2023 there were also impairments in the Market Italy segment. The main items are explained in the notes.

Market Switzerland segment

Taschinas power plant benefits from guaranteed electricity prices until 2036, but from 2037 will be subject to market price volatility. Owning to lower price forecasts, the earnings prospects were revised downwards, which led to an impairment of CHF 1,659 thousand (previous year CHF 11,802 thousand).

The realignment of the e-mobility business entails the dissolution of the PLUG’N ROLL legacy business, for which impairments of CHF 673 thousand were recognised in 2024.

Repower plans to close the Landquart paper factory power plant ahead of schedule in favour of another project. As a result, an impairment of CHF 1,104 thousand was recognised in 2023, of which CHF 394 thousand was on intangible assets (see Note 16).

Market Italy segment

In 2023 a fire in Melfi and hail in Varmo damaged solar panels, leading to an impairment loss of CHF 2,878 thousand.

Contributions to joint ventures

The disposals of gross assets in 2023 include assets totalling CHF 5,906 thousand that were contributed to the joint venture Resol Ciminna S.r.l. (see Note 4).

Leased power plants

The net carrying amount of the generation assets held as part of the finance leasing agreement, which are recognised in power plants, totalled CHF 7,999 thousand (prior year CHF 7,620 thousand) at the closing date.

Total lease liabilities come to CHF 4,004 thousand (prior year CHF 4,707 thousand).

16 Intangible assets

The goodwill recognised as additions to the scope of consolidation results from the acquisition of additional shares in Erreci S.r.l., Erreci Impianti S.r.l. (CHF 15,394 thousand) and Kraftwerk Morteratsch AG (CHF 1,416 thousand), previously carried at equity, through which these entities became subsidiaries, and the acquisition of the entire minority interests in Repower Renewable S.p.A. (CHF 16,046 thousand).

The impairment losses of CHF 394 thousand recognised in 2023 relate to the Landquart paper factory power plant (see Note 15).

17 Investments in associates and joint ventures

The addition of CHF 4,400 thousand in 2024 relates to the establishment of Madrisa Solar AG, which Repower recognises as an associate.

The disposal of consolidated companies in the amount of CHF 5,677 thousand is the result of the increase in the interests in Erreci S.r.l. and Erreci Impianti S.r.l. to 70 per cent and the increase in the interest in KW Morteratsch SA to 100 per cent. These increased interests gave Repower control of these companies, which were previously recognised as associates or joint ventures.

The addition of CHF 15,336 thousand in 2023 is the result of the establishment of joint venture Resol Ciminna S.r.l. with a participating interest of 50 per cent (CHF 13,030 thousand) and the acquisition of an interest of 20 per cent in Elettrostudio Energia S.r.l. (CHF 2,306 thousand), both carried at equity.

In 2023 an impairment loss of CHF 1,061 thousand, corresponding to the entire investment, was recognised on the interest in EVUlution AG via earnings from associates and joint ventures in the other segments and activities segment (see Note 5). At the same time the loan that existed, which was not part of the net investment in the company, was fully impaired through financial expenses in the amount of CHF 2,252 thousand (see Note 13 and Note 18).

18 Non-current financial assets

Repower holds interests of 7.0 per cent and 6.5 per cent respectively in the partner plants AKEB Aktiengesellschaft für Kernenergie-Beteiligungen, Lucerne, and Kraftwerke Hinterrhein AG, Thusis.

Other participations include further interests in entities that do not belong to Repower Group’s scope of consolidation. The interests carried at equity are a component of investments in associates and joint ventures (see Note 17).

The balances in the loans receivable line relate to loans to associates and joint ventures amounting to CHF 1,652 thousand (prior year CHF 410 thousand). Accumulated impairments of CHF 2,252 thousand (prior year CHF 2,252 thousand) were recognised under this item (see . Note 17).

19 Deferred income tax assets and liabilities

The tax rates used to calculate deferred tax items are 14.8 per cent for Switzerland, 28.0 per cent for Italy, and 29.0 per cent for Germany.

Given that offsetting loss carryforwards against future earnings and offsetting interest carryforwards against future earnings for tax purposes involves uncertainty, deferred taxes on offsettable loss and interest carryforwards are not capitalised (see Note 14).

The addition from asset acquisition contains deferred tax liabilities from the acquisition of the Tre Rinnovabili S.r.l. power generation project (see Note 15).

20 Other non-current liabilities

The other non-current receivables of CHF 7,420 thousand relate to anticipated investment grants for Robbia power plant, which went back into operation in 2024 after a comprehensive modernisation. The final investment grant will be determined by the Swiss Federal Office of Energy (SFOE) after notification of the net amount of energy generated at the end of the fifth full year of operation and is therefore expected in 2030. The final investment grant depends in particular on the net amount of energy generated annually.

21 Inventories

In the 2024 financial year, CHF 167 thousand in impairments on inventories was recognised as costs of materials (prior year CHF 8 thousand).

22 Trade accounts receivable

The decline in trade accounts receivable stems mainly from the Market Italy segment’s sales business.

The stated receivables from goods and services also include claims on associates and joint ventures amounting to CHF 64 thousand (prior year CHF 298 thousand).

Trade accounts receivable are measured by applying individual and lump-sum adjustments to the non-impaired positions based on their maturity structure and historical experience.

23 Other current liabilities

The item security deposits paid contains security deposits paid by Repower, in particular in connection with its regular trading activities. These deposits, which result from both on-exchange and OTC transactions, are designed to hedge trading risks and assure the fulfilment of contractual obligations.

The prior year’s other receivables include receivables in connection with the total modernisation of Robbia power plant in the amount of CHF 4,480 thousand. The plant is already in operation. The investment grants that are anticipated but have not yet been received are granted by the Swiss Federal Office of Energy after notification of the net amount of energy generated at the end of the fifth full year of operation and recognised as other non-current liabilities (se. Note 20).

24 Prepaid expenses and accrued income

25 Current financial assets

A high level of fixed-term deposits was maintained during the year, resulting in corresponding interest income (see Note 13). To repay a bond of CHF 150,000 thousand (see Note 29) and fund additional investments, Repower did not renew the fixed-term deposits at year-end.

26 Replacement values of held-for-trading positions

The replacement values of held-for-trading positions, which include forwards concluded to achieve trading income or margins in the energy trading business, fell by CHF 31,700 thousand, predominantly in the Market Switzerland segment (see Note 35).

27 Cash and cash equivalents

At the balance sheet date, Repower also has the following unused bank credit lines:

28 Provisions

Provisions for onerous contracts

In 2024, provisions of CHF 7,880 thousand were recognised for the first time in the Market Switzerland segment (see Note 10).

Repowerʼs contractual obligation to make Silvaplana power plant operational again entails costs of CHF 4,000 thousand which are not covered by future ash flows and have been recognised as a provision.

Provisions of CHF 1,500 thousand were recognised for onerous contracts. While Repower is focusing its e-mobility activities on DC charging solutions for heavy vehicles, existing contracts outside this field of business must still be honoured.

Provisions of CHF 2,380 thousand were also recognised. This provision is the result of onerous contracts connected with the delivery of power by Repower to the municipalities in Misox and the Calanca Valley and a discount of 5 cents/kWh to support the purchase of electricity for 2025 and 2026.

The reversal of the provision for onerous contracts comes to CHF 1,399 thousand (prior year CHF 1,206 thousand) and relates to contracts for certificates of origin and transport capacity (see Note 6).

On the balance sheet date the provisions for onerous contracts come to a total of CHF 10,616 thousand (prior year CHF 3,403 thousand). Of this, CHF 2,736 thousand (prior year CHF 2,935 thousand) falls to transport capacity in the Market Italy segment and CHF 0 thousand to certificates of origin in the Market Switzerland segment (prior year CHF 468 thousand). The newly recognised provisions of CHF 7,880 described above are recognised in the Market Switzerland segment.

Severance pay

When an employment relationship is terminated in Italy, the employee is entitled to severance pay corresponding to almost one month’s pay for each year of employment (see Note 34).

Dismantling provisions

The dismantling provisions category contains various provisions for the dismantling of operating installations. The recognition of the provision the previous year contains costs of CHF 3,000 thousand for the dismantling of a power plant that had already been taken out of service, recognised as third-party services in the Market Switzerland segment.

29 Current and non-current financial liabilities

Negative amounts presented in the table are scheduled allocations of net expenditures.

The bond with a nominal amount of CHF 150,000 thousand recognised as at 31 December 2023 as a current financial liability was repaid as scheduled in 2024. The bond was exchange-listed.

30 Other non-current liabilities

Connection fees and grid cost contributions consist of accrued connection fees and grid cost contributions received from customers, which are charged to profit or loss over a period of 35 years via net sales from goods and services in the Market Switzerland segment.

Advance payments on energy deliveries are recognised every year as income of CHF 745 thousand in the profit and loss item net sales from goods and services in the Market Switzerland segment. Minor divergences from the change recognised in the balance sheet result from rounding effects.

31 Trade accounts payable

The stated liabilities from goods and services also include liabilities vis-à-vis associates and joint ventures amounting to CHF 1,167 thousand (prior year CHF 1,132 thousand).

32 Other current liabilities

Excise taxes include in particular invoiced excise tax liabilities of the Market Italy segment’s sales business in the amount of CHF 8,822 thousand (previous year CHF 1,783 thousand).

The customer prepayments item includes advance payments of CHF 9,099 thousand (previous year CHF 0 thousand) for future deliveries of inventories. These relate to the installation of photovoltaic systems in the Market Italy segment in connection with the business of the Erreci companies, included since 2024.

Owing to less good results from companies in the Market Switzerland segment there was a year-on-year decline in income tax liabilities.

In the previous year, other current liabilities included high margin payments in connection with exchange trading in the Market Switzerland segment.

33 Deferred income and accrued expenses

The year-on-year decline in accrued other personnel expenses is particularly the result of the lower accrual of performance bonuses and incentives in the Market Switzerland segment.

34 Pension schemes

Economic benefit / economic liability and pension benefit expenses

The overfunded pension institutions relate to Repower’s employees in Switzerland, who are covered by the joint pension scheme of the PKE Vorsorgestiftung Energie foundation. On 31 December 2024 the coverage ratio was 120.3%.

The item “Pension institutions without own assets” relates to the obligation to pay severance pay in Italy (see Note 28). The change in the stated provision related to pension benefit expenses in the income statement comes to CHF 688 thousand at the average exchange rate.

35 Derivative financial instruments

The line “netting” refers to the netting of energy derivatives transactions entered into with the same counterparty and with whom there are enforceable netting agreements.

Cash flow hedges used as hedging transactions are not recognised on the balance sheet and therefore do not yet impact the balance sheet. Off-balance-sheet energy and interest derivatives are used to hedge future cash flows with a high probability of occurrence.

36 Transactions with related parties

The balances and liabilities reported on the balance sheet and the transactions contained in the income statement vis-à-vis related parties are related to business with the main shareholders and Repower AG entities, associates, partner works and joint ventures controlled by them.

The following balance sheet and profit and loss items contain the following amounts vis-à-vis related third parties:

Transactions are at market prices, or in the case of Grischelectra AG at annual costs.

Canton Graubünden’s energy business is transacted via Grischelectra AG, which is included as a related party in the table above. Canton Graubünden is deemed to be a related party in its capacity as a shareholder. Official business such as levying taxes, concession-related charges, fees, etc., is done on a statutory basis and is therefore not included here.

Compensation paid to members of the board of directors and executive board is disclosed in the Corporate Governance section.

37 Segment reporting

Segment reporting is done by geographic market and reflects internal management and reporting structures. The information provided is that used by management for steering and assessing the business performance and development of the individual segments. For each business segment, internal steering, performance measurement and capital allocation are carried out on the basis of the segment’s income before interest and income taxes (EBIT). Segment income is calculated on the basis of the accounting and valuation principles used at group level.

38 Treasury shares

Purchases / disposals of treasury shares relate to Repower AG registered shares. In the year under review, Repower AG bought 1,321 shares (prior year 962) at CHF 164.30 (prior year CHF 168.14) and sold 1,057 shares (prior year 731) at an average price of CHF 167.15 (prior year CHF 171.71).

39 Off-balance-sheet liabilities

In the course of regular business the group granted guarantees, bank guarantees and sureties in favour of third parties, directly and via commercial banks. These came to CHF 226,873 thousand (prior year CHF 226,965 thousand).

There is a binding service agreement for the Teverola power plant that runs until 2038. As of 31 December 2024, the payments in this connection came to CHF 19,143 thousand (prior year CHF 18,834 thousand). Furthermore, on the balance sheet date there were various long-term full maintenance contracts for hydro, solar and wind power plants in Germany and Italy amounting to CHF 14,239 thousand (prior year CHF 14,398 thousand).

At the reporting date of the financial year under review, the outstanding minimum lease payments consisted of CHF 9,141 thousand for property and buildings (prior year CHF 3,144 thousand).

The procurement contracts are primarily electricity supply agreements.

Obligations to take delivery of electrical energy on the basis of the interests in AKEB Aktiengesellschaft für Kernenergie, Lucerne, Kraftwerke Hinterrhein AG, Thusis, and Grischelectra AG are not included in the above table. The volume and price of electricity delivered depend on actual future production and costs incurred by these companies.

Pledges are recognised under the relevant assets.

40 Events occurring after the balance sheet date

On 7 January 2025, Repower Group increased its interest in Energiefinanzierungs AG (ENAG) from 12.5 per cent to 22.25 per cent. Owing to the increased interest, the investment will be recognised as an associate in the future. As part of this transaction, Repower also acquires an electricity purchase right of 40 MW running for 15 years.

In February 2025, the partner of Ciminna S.r.l. exercised its put option, whereupon Repower acquired all the shares. Ciminna S.r.l. is developing a 67 MW photovoltaic installation combined with sustainable agriculture. In December 2024, the project was awarded non-repayable investment contributions and a guaranteed electricity tariff for 20 years. Previously carried at equity, from 2025 Ciminna S.r.l. will be fully consolidated.

Since 31 December 2024 there have been no other events which require disclosure.

The financial statements were approved for publication by the board of directors on 4 April 2025. They are subject to the approval of the annual general meeting, which will take place on 14 May 2025.