14Goodwill and other intangible assets
|
|
|
2021 |
||||||||||
|
millions of CHF |
|
Goodwill |
|
Trademarks and licenses |
|
Research and development |
|
Computer software |
|
Customer relationship |
|
Total |
|
Acquisition cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1 |
|
1’286.0 |
|
221.6 |
|
15.3 |
|
58.3 |
|
628.4 |
|
2’209.6 |
|
Acquired through business combination |
|
56.6 |
|
11.0 |
|
– |
|
– |
|
68.7 |
|
136.3 |
|
Derecognized as discontinued operations |
|
–265.4 |
|
–78.8 |
|
–5.8 |
|
–16.7 |
|
–239.8 |
|
–606.6 |
|
Additions |
|
– |
|
– |
|
0.3 |
|
6.7 |
|
0.0 |
|
6.9 |
|
Disposals |
|
– |
|
–61.2 |
|
–0.0 |
|
–2.4 |
|
–0.7 |
|
–64.4 |
|
Currency translation differences |
|
–9.9 |
|
1.2 |
|
–0.0 |
|
1.4 |
|
–7.1 |
|
–14.4 |
|
Balance as of December 31 |
|
1’067.3 |
|
93.8 |
|
9.8 |
|
47.2 |
|
449.5 |
|
1’667.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization and impairment losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1 |
|
340.0 |
|
148.7 |
|
11.4 |
|
46.5 |
|
316.1 |
|
862.6 |
|
Derecognized as discontinued operations |
|
– |
|
–66.2 |
|
–4.4 |
|
–13.9 |
|
–112.7 |
|
–197.2 |
|
Additions |
|
– |
|
16.9 |
|
1.3 |
|
2.8 |
|
45.9 |
|
66.8 |
|
Disposals |
|
– |
|
–61.2 |
|
–0.0 |
|
–2.3 |
|
–0.7 |
|
–64.2 |
|
Impairments |
|
– |
|
– |
|
– |
|
– |
|
0.2 |
|
0.2 |
|
Currency translation differences |
|
– |
|
–0.1 |
|
–0.0 |
|
0.2 |
|
–4.6 |
|
–4.5 |
|
Balance as of December 31 |
|
340.0 |
|
38.1 |
|
8.2 |
|
33.3 |
|
244.2 |
|
663.8 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of January 1 |
|
946.0 |
|
73.0 |
|
4.0 |
|
11.8 |
|
312.3 |
|
1’347.0 |
|
As of December 31 |
|
727.3 |
|
55.7 |
|
1.6 |
|
14.0 |
|
205.3 |
|
1’003.8 |
|
|
|
2020 |
||||||||||
|
millions of CHF |
|
Goodwill 1) |
|
Trademarks and licenses |
|
Research and development |
|
Computer software |
|
Customer relationship |
|
Total |
|
Acquisition cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1 |
|
1’260.8 |
|
220.9 |
|
14.6 |
|
52.9 |
|
609.8 |
|
2’159.0 |
|
Acquired through business combination |
|
48.8 |
|
9.2 |
|
– |
|
0.3 |
|
32.0 |
|
90.3 |
|
Additions |
|
– |
|
0.0 |
|
0.6 |
|
6.9 |
|
– |
|
7.5 |
|
Disposals |
|
– |
|
–5.9 |
|
– |
|
–1.5 |
|
–0.1 |
|
–7.5 |
|
Currency translation differences |
|
–23.7 |
|
–2.5 |
|
0.0 |
|
–0.3 |
|
–13.3 |
|
–39.7 |
|
Balance as of December 31 |
|
1’286.0 |
|
221.6 |
|
15.3 |
|
58.3 |
|
628.4 |
|
2’209.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1 |
|
340.0 |
|
138.4 |
|
9.8 |
|
45.4 |
|
274.5 |
|
808.1 |
|
Additions |
|
– |
|
15.4 |
|
1.6 |
|
3.2 |
|
45.7 |
|
65.9 |
|
Disposals |
|
– |
|
–5.9 |
|
– |
|
–1.4 |
|
–0.0 |
|
–7.4 |
|
Impairments |
|
– |
|
– |
|
0.0 |
|
0.9 |
|
– |
|
0.9 |
|
Currency translation differences |
|
– |
|
0.8 |
|
–0.0 |
|
–1.6 |
|
–4.1 |
|
–4.9 |
|
Balance as of December 31 |
|
340.0 |
|
148.7 |
|
11.4 |
|
46.5 |
|
316.1 |
|
862.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of January 1 |
|
920.8 |
|
82.5 |
|
4.9 |
|
7.6 |
|
335.2 |
|
1’350.9 |
|
As of December 31 |
|
946.0 |
|
73.0 |
|
4.0 |
|
11.8 |
|
312.3 |
|
1’347.0 |
1) The balance sheet as of December 31, 2020, has been adjusted following the finalization of the purchase price accounting and measurement period adjustments related to acquisitions in 2020. A reconciliation to the previously published balance sheet is provided in note 4.
Goodwill impairment test
|
|
|
2021 |
||||||
|
millions of CHF |
|
Goodwill |
|
Headroom |
|
Growth rate residual value |
|
Pretax discount rate |
|
Flow Equipment |
|
416.3 |
|
545.0 |
|
2.0% |
|
8.3% |
|
Services |
|
222.0 |
|
1’208.2 |
|
2.0% |
|
10.5% |
|
Chemtech |
|
88.9 |
|
684.2 |
|
2.0% |
|
9.5% |
|
Discontinued operations |
|
– |
|
– |
|
n/a |
|
n/a |
|
Total goodwill as of December 31 |
|
727.3 |
|
2’437.4 |
|
|
|
|
|
|
|
2020 |
||||||
|
millions of CHF |
|
Goodwill 1) |
|
Headroom |
|
Growth rate residual value |
|
Pretax discount rate |
|
Flow Equipment |
|
373.6 |
|
235.3 |
|
2.0% |
|
8.8% |
|
Services |
|
217.2 |
|
1’021.0 |
|
2.0% |
|
10.2% |
|
Chemtech |
|
89.8 |
|
594.8 |
|
1.5% |
|
10.3% |
|
Discontinued operations |
|
265.4 |
|
1’762.3 |
|
2.0% |
|
5.8% |
|
Total goodwill as of December 31 |
|
946.0 |
|
3’613.5 |
|
|
|
|
1) The balance sheet as of December 31, 2020, has been adjusted following the finalization of the purchase price accounting and measurement period adjustments related to acquisitions in 2020. A reconciliation to the previously published balance sheet is provided in note 4.
Goodwill is allocated to the smallest cash-generating unit at which goodwill is monitored for internal management purposes (i.e., division or business unit). The recoverable amount of these units is determined over a five-year cash flow projection period.
The calculation is based on the budget for the first period (2021), the three-year strategic plan for the subsequent two periods (2022–2023), and a management calculation for the next two periods (2024–2025). The budget and the three-year strategic plan were approved by the Board of Directors in February 2021. Cash flows beyond the planning period are extrapolated using a terminal value including the growth rates as stated above.
As of December 31, 2021, there is no indication for goodwill impairment. Updating the impairment test would not have resulted in a goodwill impairment.
Sensitivity analyses
The recoverable amount from cash-generating units is measured on the basis of value-in-use calculations significantly impacted by the terminal growth rate used to determine the residual value, the discount rate and the projected cash flows. The table above shows the amount by which the estimated recoverable amount of the CGU exceeds its carrying amount (headroom).
Management identified that for the CGU Flow Equipment a reasonably possible decrease in the terminal growth rate by 5 percentage points could cause the carrying amount to exceed the recoverable amount (2020: decrease by 2.3 percentage points).
Management determined there are no other reasonably possible changes in key assumptions that would result in a goodwill impairment.