28 Leases

IFRS 16 Leases requires lessees to recognize all leases in the form of a right-of-use asset and corresponding lease liability. The value of the right of use is corrected for any initial direct costs incurred as well as reimbursements received. The lease liability is measured at the present value of the outstanding lease payments. They are presented in the income statement as financing activities so that the right-of-use asset is amortized on a straight-line basis and the lease liability is rolled forward using the effective interest method. Renewal, termination and purchase terms are taken into account during initial measurement of the lease liability if their exercise has become reasonably certain (especially property leases). Sale-and-leaseback agreements are presented using the same principles.

Lease agreements may contain renewal and termination options. The Group assumes in the case of larger contracts (for example for buildings) that it is generally possible to make a sufficiently reliable estimate of exercise of the options, if this is to be made within the next five years. For key production and administrative buildings, options to be exercised later can also be classified as sufficiently likely, which means they will also be taken into account. In the case of smaller contracts for exchangeable goods, on the other hand, it is regularly assumed that there will be no extension.

The Group makes use of the simplification rule of recognizing leases with a maximum total term of 12 months (also taking into consideration the reasonably certain exercise of existing contractual options) and leases pertaining to low-value assets in a similar way to the previous operating lease model. The expense is then recognized on a straight-line basis over the term. The Company classifies assets as low-value assets, as defined in the standard, insofar as the acquisition cost of a relevant new device is less than/equal to €5k (or a similar amount in foreign currency).

The number and scope of vehicle leasing contracts in the Group are stable overall and change only slightly over time. Under this assumption, the accounting of vehicle leases in accordance with IFRS 16 is based on a simplification according to which a fixed amount (fixed value) is recognized for the amount of the right-of-use assets and lease liabilities for all of a company’s vehicle leases. These fixed values are reviewed regularly every five years and adjusted if necessary.

Lessors must assess as of the commencement date whether a lease is a finance lease or an operating lease. The lease is a finance lease if all significant risks and rewards are transferred. In this case, a receivable is recognized in the amount of the net investment in the lease. The corresponding interest income is presented in the financial result. Lease payments under operating leases are recognized as income on a straight-line basis over the lease term.

Carl Zeiss Meditec Group as lessee

In the property segment, the Group rents primarily administrative and production buildings. The rights of use to other equipment, furniture and fixtures mainly relate to rented vehicles. The terms of the lease agreement are negotiated individually and contain a multitude of different conditions.

The table below shows the separately presented rights of use to assets that are recognized under fixed assets as part of a leasing arrangement. The other changes presented are mainly the result of disposals and contract adjustments as well as currency effects.

In fiscal year 2024/25 liabilities from leases were paid in the amount of €23,365k (prior year: €23,303k). The interest expenses from the compounding of lease liabilities are recognized in the financial result and amount to €4,094k (prior year: €4,114k). The total payment for leasing liabilities, including payments for short-term and low-value leases not recognized in financing cash flow, amounted to €26,016k in the fiscal year under review (prior year: €26,385k). At the end of the reporting period there were future cash outflows amounting to €132,456k; please refer to Note 26 “Financial instruments and risk management” for the maturity analysis of the undiscounted lease payments.

Further disclosures on leases:

Termination and extension options deemed improbable in the amount of €23,759k mainly relate to the rental of an administration building including visitor and exhibition space in Berlin and a Group administration building in Jena Göschwitz. In fiscal year 2024/25, no leases were entered into whose term has not yet started.

Carl Zeiss Meditec Group as lessor

Operating leases

Within the scope of selling its products, the Company offers some financing models in the form of lease agreements, which, due to their nature, are to be classified as operating leases.

Risks from lease agreements arise in particular due to agreed conditions or purchase volumes not being adhered to. In many cases, in order to hedge against such risks, the underlying contracts may include the payment of minimum purchases despite the absence of acceptance or the transfer of the leased asset back to the lessor, including an appropriate compensation payment for the premature termination of the contract. Key measures to minimize risk prior to the conclusion of the agreement also include a customer credit check, a feasibility analysis of the lease agreement, and a comprehensive analysis of the customer’s realistic requirements.

The leasing income in the current fiscal year amounts to €5,233k. No leasing income was generated from variable lease payments that are not dependent on an index or interest.

The future accumulated minimum lease and rental payments from binding operating lease agreements amount to the following:

The carrying amount of the property, plant and equipment underlying the operating leases amounts to €4,731k at the end of the reporting period, with €1,142k relating to technical plant and machinery and €3,589k to other equipment, furniture and fixtures.

Finance leases

In some cases the Company offers financing models within the scope of selling its products, in the form of lease agreements, which, due to their nature, must be classified as finance leases.

For information on risks arising from finance leases, please refer to the statements in the “Operating leases” section.

In the fiscal year under review, income from finance leases amounted to €2,231k (prior year: €1,980k).

The outstanding minimum rental and lease payments from finance leases are as follows:

The change in the carrying amount of the net investment in finance leases in the fiscal year under review is due, as in the prior fiscal year, exclusively to newly concluded agreements and to scheduled lease payments by the lessee. Valuation allowances for the expected credit loss on leasing receivables are included in trade receivables.