Note 21. Investments accounted for using the equity method

Investments accounted for using the equity method comprise the following:

The main investments accounted for using the equity method include, in particular, the interest in Lenzing Papier GmbH (LPP), Lenzing, which is allocated to the “Others” segment, and LD Florestal S.A. (LDF), Indianópolis, Brazil, which is allocated to the Pulp Division segment. For the strategic importance of the other investments accounted for using the equity method and their relationship with the Lenzing Group, please see note 38.

Investments accounted for using the equity method developed as follows:

The Lenzing Group recognizes both, measurement effects and the results from investments accounted for using the equity method, together in income from investments accounted for using the equity method.

In the 2023 financial year, an impairment of EUR 7,564 thousand (2022: EUR 3,114 thousand) ) was recognized on the outstanding purchase price receivables and non-current loans due from the buyer of EFB (and its subsidiaries) (see note 37, credit risk). The carrying amounts of the outstanding purchase price receivables and non-current loans due from the buyer of EFB (and its subsidiaries) total EUR 0 thousand as at December 31, 2023 (December 31, 2022: EUR 7,564 thousand and are reported under financial assets. They carry standard bank interest rates.

The Lenzing Group holds a lien on the remaining shares of EFB. In addition, a long-term performance-related purchase price component exists, which depends on the company’s future profitability and is recognized as at December 31, 2023, in the amount of EUR 0 thousand (December 31, 2022: EUR 4,087 thousand) as a discounted present value and was reported under other non-current assets as at December 31, 2022. In addition, the buyer was granted a credit line of up to EUR 1,376 thousand (December 31, 2022: EUR 3,091 thousand), which can be utilized in the event of predefined adverse changes in EFB’s general conditions on the sales market until December 31, 2025, at the latest. As of December 31, 2023, and in the previous year as at December 31, 2022 this credit line had not been utilized.

The Lenzing Group held 20 percent of capital and voting rights as at December 31, 2023 (December 31, 2022: 20 percent). The core business of EFB, which is not publicly listed, is the production and marketing of wood-based cellulosic fibers. The relations between the Lenzing Group and this company are described in note 38.

The following table provides summarized financial information on EFB in accordance with IFRS (100 percent):

The reconciliation of equity to the carrying amount of the investment in EFB is as follows:

The Lenzing Group held 40 percent of capital and voting rights in LPP as at December 31, 2023 (December 31, 2022: 40 percent). The core business of LPP, which is not publicly listed, is the production of cellulose-based products, in particular paper. The relations between the Lenzing Group and this company are described in note 38.

The following table provides summarized financial information on LPP in accordance with IFRS (100 percent):

The reconciliation of equity to the carrying amount of the investment in LPP is as follows:

The Lenzing Group held 50 percent of the capital and voting rights in LDF as at December 31, 2023 (December 31, 2022: 50 percent). The core business of LDF, which is not publicly listed, is granting rights of use. The relations between the Lenzing Group and this company are described in note 38.

The following table provides summarized financial information on LDF in accordance with IFRS (100 percent):

The reconciliation of equity to the carrying amount of the investment in LDF is as follows:

The investments in associates represent shares in companies in which the Lenzing Group can exert significant influence over financial and operating policies. Joint ventures are joint arrangements managed by the Lenzing Group together with one or more partners, whereby the Lenzing Group has rights to the net assets of the arrangement.