Audited information

in CHF m

 

Goodwill

 

Technology

 

Customer relationships

 

Trade names

 

Other

 

Total 2016

Cost

 

 

 

 

 

 

 

 

 

 

 

 

As per 1 January

 

1 263

 

192

 

270

 

108

 

330

 

2 163

Additions

 

 

 

 

 

39

 

39

Acquired in business combinations (see )

 

176

 

31

 

114

 

2

 

22

 

345

Disposals

 

–7

 

 

–2

 

 

–10

 

–19

Exchange rate differences

 

5

 

 

7

 

 

–2

 

10

At 31 December

 

1 437

 

223

 

389

 

110

 

379

 

2 538

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated amortization and impairment

 

 

 

 

 

 

 

 

 

 

 

 

As per 1 January

 

–244

 

–121

 

–174

 

–69

 

–205

 

–813

Disposals

 

7

 

 

2

 

 

10

 

19

Amortization

 

 

–15

 

–10

 

–9

 

–21

 

–55

Exchange rate differences

 

10

 

 

–2

 

 

3

 

11

At 31 December

 

–227

 

–136

 

–184

 

–78

 

–213

 

–838

 

 

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

1 210

 

87

 

205

 

32

 

166

 

1 700

in CHF m

 

Goodwill

 

Technology

 

Customer relationships

 

Trade names

 

Other

 

Total 2015

Cost

 

 

 

 

 

 

 

 

 

 

 

 

As per 1 January

 

1 324

 

187

 

187

 

74

 

259

 

2 031

Additions

 

 

 

 

 

27

 

27

Acquired in business combinations (see )

 

4

 

2

 

1

 

 

9

 

16

Disposals

 

 

–30

 

 

–3

 

–3

 

–36

Reclassifications

 

30

 

42

 

87

 

37

 

63

 

259

Exchange rate differences

 

–95

 

–9

 

–5

 

 

–25

 

–134

At 31 December

 

1 263

 

192

 

270

 

108

 

330

 

2 163

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated amortization and impairment

 

 

 

 

 

 

 

 

 

 

 

 

As per 1 January

 

–210

 

–86

 

–51

 

–38

 

–159

 

–544

Disposals

 

 

30

 

 

3

 

3

 

36

Amortization

 

 

–15

 

–8

 

–7

 

–24

 

–54

Impairment (see )

 

–7

 

 

 

 

–4

 

–11

Reclassifications

 

–30

 

–53

 

–115

 

–27

 

–34

 

–259

Exchange rate differences

 

3

 

3

 

 

 

13

 

19

At 31 December

 

–244

 

–121

 

–174

 

–69

 

–205

 

–813

 

 

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

1 019

 

71

 

96

 

39

 

125

 

1 350

Amortization is allocated to the line in the income statement, which represents the function to which the intangible asset pertains.

In 2016 no impairments were recognized. Impairments recognized in 2015 arose as a result of the restructuring measures and the disposal projects.

As per end of 2016, other intangible assets include costs in the amount of CHF 49 million (2015: CHF 44 million) capitalized in connection with the REACH regulation and CHF 46 million (2015: CHF 23 million) of capitalized internally generated intangibles.

Impairment test for goodwill. Goodwill is allocated to the Group’s cash generating units (CGU). Cash generating units consist of Business Units which are for external reporting purposes reported under the corresponding (reportable segments, see ).

Goodwill is allocated to the following CGUs:

in CHF m

 

31.12.2016

 

31.12.2015

Industrial & Consumer Specialties

 

70

 

46

Masterbatches

 

175

 

174

Pigments

 

18

 

18

Functional Minerals

 

143

 

143

Catalysis

 

628

 

622

Oil & Mining Services

 

176

 

16

Total net book value

 

1 210

 

1 019

The recoverable amount for all CGUs is determined based on their value-in-use. The value-in-use calculations use projections based on financial budgets approved by the Board of Directors covering a four-year period. Beyond this four-year period growth in accordance with market growth (2%) is assumed. The main assumptions used for cash flow projections are in percent of sales and sales growth. The assumptions regarding these two variables are based on Management’s past experience and future expectations of business performance. The pre-tax discount rates used are based on the Group’s weighted average cost of capital. The assumed pre-tax discount rate was 10.27% for all cash generating units (2015: 11.31%).

For all CGUs it was assumed that they achieve sales growth in line with or higher than market growth based on the specific strategic plans for the respective CGUs. It was also assumed that the EBITDA in percent of sales will improve over present performance as a result of the continuous improvement measures implemented. The conclusion was that the net present value of the expected cash flows exceeds the carrying amount of the net assets allocated on a value-in-use basis of all CGUs.

The estimated recoverable amount of the CGU exceeds its carrying amount including goodwill by CHF 247 million. The recoverable amount would be equal to the carrying amount if the assumed average annual sales growth rate during the planning period were reduced by 2.0%, or alternatively, if the operating margin was reduced by 2.6% of sales.

Business area

In 2013 Clariant adjusted its reporting segments and grouped its businesses with similar end-user markets and growth drivers into four distinct Business Areas: Care Chemicals, Catalysis, Natural Resources, and Plastics & Coatings. VIEW ENTIRE GLOSSARY

Cash flow

Economic indicator representing the operational net inflow of cash and cash equivalents during a given period. VIEW ENTIRE GLOSSARY

EBITDA

Earnings before interest, taxes, depreciation, and amortization. VIEW ENTIRE GLOSSARY

Catalyst

A substance that lowers the activation energy, thereby increasing the rate of a chemical reaction without being consumed by the reaction itself (Clariant Business Unit Catalysts). VIEW ENTIRE GLOSSARY

FURTHER READING