14Goodwill and other intangible assets
|
|
|
2023 |
||||||||||
|
millions of CHF |
|
Goodwill |
|
Trademarks and licenses |
|
Research and development |
|
Computer software |
|
Customer relationship |
|
Total |
|
Acquisition cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1 |
|
1’016.9 |
|
92.5 |
|
16.1 |
|
50.7 |
|
399.5 |
|
1’575.6 |
|
Additions |
|
– |
|
– |
|
0.0 |
|
5.1 |
|
0.9 |
|
6.1 |
|
Disposals |
|
– |
|
– |
|
– |
|
–0.7 |
|
–3.3 |
|
–4.0 |
|
Reclassifications |
|
– |
|
– |
|
2.6 |
|
0.0 |
|
0.5 |
|
3.1 |
|
Currency translation differences |
|
–38.9 |
|
–4.6 |
|
–0.1 |
|
–1.7 |
|
–19.2 |
|
–64.5 |
|
Balance as of December 31 |
|
977.9 |
|
88.0 |
|
18.6 |
|
53.4 |
|
378.5 |
|
1’516.3 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization and impairment losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1 |
|
340.0 |
|
45.8 |
|
9.3 |
|
30.7 |
|
238.6 |
|
664.5 |
|
Additions 1) |
|
– |
|
7.9 |
|
1.3 |
|
2.8 |
|
24.6 |
|
36.6 |
|
Disposals |
|
– |
|
– |
|
– |
|
–0.7 |
|
–3.3 |
|
–4.0 |
|
Currency translation differences |
|
– |
|
–2.4 |
|
–0.0 |
|
–1.2 |
|
–11.9 |
|
–15.5 |
|
Balance as of December 31 |
|
340.0 |
|
51.3 |
|
10.6 |
|
31.5 |
|
248.1 |
|
681.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of January 1 |
|
676.9 |
|
46.7 |
|
6.7 |
|
20.0 |
|
160.8 |
|
911.2 |
|
As of December 31 |
|
637.9 |
|
36.6 |
|
8.0 |
|
21.8 |
|
130.4 |
|
834.8 |
1) In the statement of income, the amortization expense for trademark and licenses is recognized in “Research and development expense” and in “Selling and distribution expense”, the amortization expense for Customer relationship is primarily recognized in “Selling and distribution expense”.
|
|
|
2022 |
||||||||||
|
millions of CHF |
|
Goodwill |
|
Trademarks and licenses |
|
Research and development |
|
Computer software |
|
Customer relationship |
|
Total |
|
Acquisition cost |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1 |
|
1’067.3 |
|
93.8 |
|
9.8 |
|
47.2 |
|
449.5 |
|
1’667.6 |
|
Divestitures of subsidiaries |
|
– |
|
– |
|
– |
|
–0.3 |
|
–1.4 |
|
–1.7 |
|
Classification as held for sale 2) |
|
–8.6 |
|
– |
|
– |
|
–0.8 |
|
–12.6 |
|
–22.0 |
|
Additions |
|
– |
|
– |
|
2.2 |
|
6.4 |
|
0.1 |
|
8.7 |
|
Disposals |
|
– |
|
– |
|
– |
|
–4.1 |
|
–8.6 |
|
–12.6 |
|
Reclassifications |
|
– |
|
– |
|
4.1 |
|
1.8 |
|
0.2 |
|
6.0 |
|
Currency translation differences |
|
–41.8 |
|
–1.3 |
|
–0.0 |
|
0.5 |
|
–27.7 |
|
–70.3 |
|
Balance as of December 31 |
|
1’016.9 |
|
92.5 |
|
16.1 |
|
50.7 |
|
399.5 |
|
1’575.6 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization and impairment losses |
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of January 1 |
|
340.0 |
|
38.1 |
|
8.2 |
|
33.3 |
|
244.2 |
|
663.8 |
|
Divestitures of subsidiaries |
|
– |
|
– |
|
– |
|
–0.3 |
|
–1.4 |
|
–1.7 |
|
Classification as held for sale 2) |
|
– |
|
– |
|
– |
|
–0.3 |
|
–6.4 |
|
–6.7 |
|
Additions |
|
– |
|
8.4 |
|
1.1 |
|
2.3 |
|
27.0 |
|
38.8 |
|
Disposals |
|
– |
|
– |
|
– |
|
–4.1 |
|
–8.6 |
|
–12.6 |
|
Currency translation differences |
|
– |
|
–0.7 |
|
–0.0 |
|
–0.2 |
|
–16.2 |
|
–17.1 |
|
Balance as of December 31 |
|
340.0 |
|
45.8 |
|
9.3 |
|
30.7 |
|
238.6 |
|
664.5 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net book value |
|
|
|
|
|
|
|
|
|
|
|
|
|
As of January 1 |
|
727.3 |
|
55.7 |
|
1.6 |
|
14.0 |
|
205.3 |
|
1’003.8 |
|
As of December 31 |
|
676.9 |
|
46.7 |
|
6.7 |
|
20.0 |
|
160.8 |
|
911.2 |
1) In 2022, Goodwill in the amount of CHF 8.6 million and other intangible assets with a net book value of 6.7 million were allocated to the Russian disposal group and fully impaired. The impairments of CHF 15.3 million were recorded in other operating expenses (see note 11).
Goodwill impairment test
|
|
|
2023 |
||||||
|
millions of CHF |
|
Goodwill |
|
Headroom |
|
Growth rate residual value |
|
Pretax discount rate |
|
Flow Equipment |
|
362.3 |
|
628.5 |
|
2.0% |
|
9.9% |
|
Services |
|
193.8 |
|
1’620.3 |
|
2.0% |
|
10.8% |
|
Chemtech |
|
81.8 |
|
830.0 |
|
2.0% |
|
10.9% |
|
Total as of December 31 |
|
637.9 |
|
3’078.8 |
|
|
|
|
|
|
|
2022 |
||||||
|
millions of CHF |
|
Goodwill |
|
Headroom |
|
Growth rate residual value |
|
Pretax discount rate |
|
Flow Equipment |
|
384.9 |
|
605.7 |
|
2.0% |
|
8.9% |
|
Services |
|
205.0 |
|
1’275.5 |
|
2.0% |
|
10.2% |
|
Chemtech |
|
87.0 |
|
717.6 |
|
2.0% |
|
10.5% |
|
Total as of December 31 |
|
676.9 |
|
2’598.8 |
|
|
|
|
Goodwill is allocated to the smallest cash-generating unit (CGU) at which goodwill is monitored for internal management purposes (i.e., division). The recoverable amount has been determined based on a value-in-use calculation. The three-year strategic plan approved by the Board of Directors in the first quarter of the year forms the basis for the projected cash flows, with two additional periods based on a management calculation. The budget and the three-year strategic plan were approved by the Board of Directors in February 2023. Cash flows beyond the planning period are extrapolated using a terminal value including a growth rate as stated above.
As of December 31, 2023, there is no indication of goodwill impairment. Updating the impairment test would not have resulted in any 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).
Sensitivity analyses were performed with regards to key assumptions, that would not change the conclusions of the impairment test. An increase of the discount rate by 5.0 percentage points or a decrease of the terminal growth rate by 5.0 percentage points would still lead to a recoverable amount exceeding the carrying amount for all CGU's.