Notes to the consolidated financial statements EN

4Acquisitions and divestitures of subsidiaries and transactions with non-controlling interests

Cash flow from acquisitions of subsidiaries

millions of CHF	2022	2021
Cash consideration paid	–	–138.4
Contingent consideration paid	–4.2	–0.5
Cash acquired	–	15.0
Total cash flow from acquisitions, net of cash acquired	–4.2	–123.9

No acquisitions of businesses were made in the year 2022, contingent consideration was paid in 2022 for the GTC Technology US, LLC acquisition in 2019.

Contingent consideration

millions of CHF	2022	2021
Balance as of January 1	5.9	6.6
Assumed in a business combination	–	1.9
Derecognized as discontinued operations	–	–2.2
Payment of contingent consideration	–4.2	–0.5
Currency translation differences	0.2	0.1
Total contingent consideration as of December 31	1.9	5.9
– thereof non-current	–	1.9
– thereof current	1.9	4.0

The outstanding contingent consideration relates to acquisitions in 2021. It is expected to be paid in 2023. It is presented in other current liabilities.

Acquisitions in 2021

The following table summarizes the recognized amounts of assets acquired and liabilities assumed at the date of acquisition, including the resulting goodwill and the total consideration paid.

Net assets acquired

millions of CHF	Nordic Water	Others	Total
Intangible assets	72.3	7.4	79.7
Property, plant and equipment	1.2	1.4	2.5
Lease assets	2.9	1.5	4.4
Deferred income tax assets	0.1	–	0.1
Cash and cash equivalents	14.1	0.9	15.0
Trade accounts receivable	7.3	0.1	7.4
Other current assets	19.9	1.3	21.2
Lease liabilities	–2.9	–1.4	–4.4
Provisions	–1.9	–0.2	–2.1
Deferred income tax liabilities	–18.7	–1.0	–19.7
Other liabilities	–20.1	–0.4	–20.5
Net identifiable assets	74.3	9.4	83.6
Goodwill recognized in balance sheet	54.9	1.7	56.6
Total consideration	129.2	11.1	140.2

Purchase price paid in cash	129.2	9.2	138.4
Contingent consideration	–	1.9	1.9
Total consideration	129.2	11.1	140.2

Divestitures in 2022

In the first half of 2022, the group sold its 100% shareholding in the Brazilian subsidiary Sulzer Services Brasil, Triunfo. The disposal resulted in a loss of CHF 0.6 million, including a loss of CHF 1.0 million from the reclassification of currency translation differences into the income statement. The loss is recorded in other operating expenses. In the first half of 2022, the group announced its intention to wind down its business in Poland, comprising of the two subsidiaries Sulzer Turbo Services Poland and Sulzer Pumps Wastewater Poland. The group assessed that it no longer has control over the two subsidiaries and deconsolidated the Polish business at the end of the first half of 2022. The investment retained was classified as investment in associates, the fair value of the investment retained at the date of the loss of control amounted to zero. The deconsolidation resulted in a loss of CHF 6.2 million and includes a loss of CHF 1.2 million from the reclassification of currency translation differences into the income statement. The loss is recorded in other operating expenses.

Cash flow from divestments

millions of CHF	2022	2021
Cash consideration received	7.8	1.6
Cash disposed of	–4.6	–2.8
Total cash flow from divestitures, net of cash derecognized	3.2	–1.2

Net assets derecognized

The assets and liabilities derecognized during the year 2022 as part of the divestitures are reflected in the below table.

millions of CHF		Total
Property, plant and equipment		2.5
Deferred income tax assets		0.2
Inventories and advance payments to suppliers		2.0
Trade accounts receivable		9.0
Contract assets		0.6
Other current receivables		1.9
Cash and cash equivalents		4.7
Non-current provisions		–0.3
Trade payables		–2.6
Contract liabilities		–0.7
Other current liabilities		–4.8
Net assets derecognized		12.5

Transactions with non-controlling interests

millions of CHF	2022	2021
Carrying amount of non-controlling interests acquired (disposed)	–0.8	5.4
Consideration received (paid) for non-controlling interests in cash	0.4	–17.3
Increase (Decrease) in equity attributable to owners of Sulzer Ltd	–0.4	–11.9