5. Property, Plant and Equipment

Audited information

in CHF m

 

Land

 

Buildings

 

Machinery and equipment

 

Furniture, vehicles, computer hardware

 

Assets under construction

 

Total 2017

Cost

 

 

 

 

 

 

 

 

 

 

 

 

As per 1 January

 

404

 

1 785

 

2 746

 

396

 

427

 

5 758

Additions

 

1

 

17

 

59

 

25

 

146

 

248

Acquired in business combinations

 

 

3

 

6

 

–5

 

5

 

9

Reclassified to held for sale

 

–8

 

–8

 

–3

 

 

 

–19

Disposals

 

–1

 

–7

 

–20

 

–12

 

 

–40

Reclassifications

 

3

 

104

 

215

 

11

 

–333

 

Exchange rate differences

 

22

 

51

 

118

 

14

 

–11

 

194

At 31 December

 

421

 

1 945

 

3 121

 

429

 

234

 

6 150

Accumulated depreciation and impairment

 

 

 

 

 

 

 

 

 

 

 

 

As per 1 January

 

–105

 

–1 180

 

–1 988

 

–280

 

 

–3 553

Reclassified to held for sale

 

 

2

 

2

 

 

 

4

Disposals

 

 

6

 

19

 

9

 

 

34

Depreciation

 

 

–51

 

–145

 

–35

 

 

–231

Impairment (see )

 

 

–1

 

–2

 

–2

 

 

–5

Exchange rate differences

 

–11

 

–32

 

–93

 

–13

 

 

–149

At 31 December

 

–116

 

–1 256

 

–2 207

 

–321

 

 

–3 900

 

 

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

305

 

689

 

914

 

108

 

234

 

2 250

in CHF m

 

Land

 

Buildings

 

Machinery and equipment

 

Furniture, vehicles, computer hardware

 

Assets under construction

 

Total 2016

Cost

 

 

 

 

 

 

 

 

 

 

 

 

As per 1 January

 

408

 

1 722

 

2 673

 

340

 

427

 

5 570

Additions

 

 

11

 

56

 

15

 

215

 

297

Acquired in business combinations

 

4

 

17

 

20

 

28

 

1

 

70

Reclassified to held for sale

 

–6

 

 

 

 

 

–6

Disposals

 

–13

 

–17

 

–27

 

–22

 

 

–79

Reclassifications

 

11

 

54

 

114

 

42

 

–221

 

Exchange rate differences

 

 

–2

 

–90

 

–7

 

5

 

–94

At 31 December

 

404

 

1 785

 

2 746

 

396

 

427

 

5 758

Accumulated depreciation and impairment

 

 

 

 

 

 

 

 

 

 

 

 

As per 1 January

 

–108

 

–1 142

 

–1 975

 

–262

 

 

–3 487

Reclassified to held for sale

 

1

 

 

 

 

 

1

Disposals

 

1

 

7

 

26

 

21

 

 

55

Depreciation

 

 

–47

 

–133

 

–30

 

 

–210

Impairment (see )

 

 

–3

 

–6

 

 

 

–9

Reclassifications

 

 

1

 

16

 

–17

 

 

Exchange rate differences

 

1

 

4

 

84

 

8

 

 

97

At 31 December

 

–105

 

–1 180

 

–1 988

 

–280

 

 

–3 553

 

 

 

 

 

 

 

 

 

 

 

 

 

Net book value

 

299

 

605

 

758

 

116

 

427

 

2 205

Impairments recognized in 2017 and 2016 arose as a result of restructuring measures entailing site closures.

In 2016 Clariant sold office buildings in Germany and in China realizing a gain of CHF 23 million.

As at 31 December 2017, commitments for the purchase of property, plant and equipment concerned various projects mainly in Germany, the Unites States, and in China and totalled CHF 50 million (2016: CHF 49 million).

As per 31 December 2017, property, plant and equipment acquired by way of finance lease, with costs of CHF 30 million (2016: CHF 18 million) and a net book value of CHF 17 million (2016: CHF 9 million) were recorded.

Investment properties (Clariant as a lessor in operating leases)

As a result of the continous efforts to increase efficiency and to optimize the structure of its facilities Clariant sometimes vacates certain production or adminstrative sites. In order to minimize expenses Clariant seeks to find tenants for these facilities.

As a consequence such facilities, which generate income exclusively from rental contracts, are considered as investment property in line with the requirements of IAS40, Investment Property.

All investment property is valued at cost less depreciation.

Investment property in Clariant is almost entirely located in Switzerland and Germany. The gross book value of investment property amounted to CHF 721 million on 31 December 2017 (CHF 651 million on 31 December 2016).

Accumulated depreciation on investment property amounted to CHF 541 million on 31 December 2017 (CHF 484 million on 31 December 2016).

The net book value amounted to CHF 180 million on 31 December 2017 (CHF 167 million on 31 December 2016).

Depreciation amounted to CHF 2 million in 2017 (CHF 2 million in 2016).

Income from investment properties amounted to CHF 16 million in 2017 (CHF 15 million in 2016) and is recorded in SG&A in the segment Corporate.

Expected minimum lease income varies between CHF 7 million and CHF 13 million (2016: CHF 8 million and CHF 13 million) per annum for the next five years and amounts to CHF 105 million for later periods (2016: CHF 107 million).

Since all investment property consists of industrial and administrative sites which have been in use for several decades there is no active market which would give information on possible market prices, is such sites were to be sold to a third party. The fair values of the investment properties were therefore determined by way of external appraisals and value-in-use calculations. As of 31 December 2017 the estimated fair value of investment property amounted to CHF 223 million (CHF 189 million on 31 December 2016).

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