11. Intangible Assets
CHF million |
|
EDP software & consultancy |
|
Customer relationships |
|
Brands & IP |
|
Goodwill |
|
Other intangible assets |
|
2021 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Acquisition costs as at January 1, 2021 |
|
132.8 |
|
117.8 |
|
459.8 |
|
706.5 |
|
21.1 |
|
1,438.0 |
Additions |
|
23.5 |
|
– |
|
0.5 |
|
– |
|
– |
|
24.0 |
Retirements |
|
– 2.2 |
|
– |
|
– |
|
– |
|
– 0.8 |
|
– 3.0 |
Transfers |
|
– 4.3 |
|
– |
|
– |
|
– |
|
– 16.7 |
|
– 21.0 |
Currency translation |
|
– 0.4 |
|
4.3 |
|
– |
|
25.3 |
|
– 0.2 |
|
29.0 |
Acquisition costs as at December 31, 2021 |
|
149.4 |
|
122.1 |
|
460.3 |
|
731.8 |
|
3.4 |
|
1,467.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization as at January 1, 2021 |
|
83.6 |
|
49.8 |
|
– |
|
– |
|
3.7 |
|
137.1 |
Additions |
|
14.2 |
|
8.2 |
|
– |
|
– |
|
1.4 |
|
23.8 |
Impairments |
|
0.4 |
|
– |
|
– |
|
– |
|
0.7 |
|
1.1 |
Retirements |
|
– 2.2 |
|
– |
|
– |
|
– |
|
– |
|
– 2.2 |
Transfers |
|
– |
|
– |
|
– |
|
– |
|
– 2.4 |
|
– 2.4 |
Currency translation |
|
– 0.8 |
|
1.7 |
|
– |
|
– |
|
– 0.1 |
|
0.8 |
Accumulated amortization as at December 31, 2021 |
|
95.2 |
|
59.7 |
|
– |
|
– |
|
3.3 |
|
158.2 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net intangible assets as at December 31, 2021 |
|
54.2 |
|
62.4 |
|
460.3 |
|
731.8 |
|
0.1 |
|
1,308.8 |
CHF million |
|
EDP software & consultancy |
|
Customer relationships |
|
Brands & IP |
|
Goodwill |
|
Other intangible assets |
|
2020 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
Acquisition costs as at January 1, 2020 |
|
119.8 |
|
129.5 |
|
459.8 |
|
763.1 |
|
20.0 |
|
1,492.2 |
Additions |
|
22.4 |
|
– |
|
– |
|
– |
|
0.8 |
|
23.2 |
Acquisition of subsidiary (note 2) |
|
0.1 |
|
– |
|
– |
|
12.6 |
|
2.8 |
|
15.5 |
Retirements |
|
– 3.8 |
|
– |
|
– |
|
– |
|
– |
|
– 3.8 |
Transfers |
|
– 0.7 |
|
– |
|
– |
|
– |
|
0.4 |
|
– 0.3 |
Currency translation |
|
– 5.0 |
|
– 11.7 |
|
– |
|
– 69.2 |
|
– 2.9 |
|
– 88.8 |
Acquisition costs as at December 31, 2020 |
|
132.8 |
|
117.8 |
|
459.8 |
|
706.5 |
|
21.1 |
|
1,438.0 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated amortization as at January 1, 2020 |
|
76.4 |
|
46.1 |
|
– |
|
– |
|
2.9 |
|
125.4 |
Additions |
|
13.2 |
|
8.4 |
|
– |
|
– |
|
0.8 |
|
22.4 |
Impairments |
|
0.3 |
|
– |
|
– |
|
– |
|
0.3 |
|
0.6 |
Retirements |
|
– 3.7 |
|
– |
|
– |
|
– |
|
– |
|
– 3.7 |
Currency translation |
|
– 2.6 |
|
– 4.7 |
|
– |
|
– |
|
– 0.3 |
|
– 7.6 |
Accumulated amortization as at December 31, 2020 |
|
83.6 |
|
49.8 |
|
– |
|
– |
|
3.7 |
|
137.1 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Net intangible assets as at December 31, 2020 |
|
49.2 |
|
68.0 |
|
459.8 |
|
706.5 |
|
17.4 |
|
1,300.9 |
Customer relationships of CHF 62.4 million (CHF 68.0 million in prior year) relate to the acquisition of Russell Stover Chocolates, LLC in 2014 and have a remaining useful life of 8 years. The same applies for the largest share (CHF 459.8 million) of the position “brands and intellectual property” (“IP”)(CHF 459.8 million in prior year) as well as the majority of goodwill, whereof CHF 719.8 million of the total CHF 731.8 million (CHF 693.9 million of CHF 706.5 million in prior year) relate to the acquisition of Russell Stover Chocolates, LLC. Both positions have an indefinite useful life. The remaining goodwill of CHF 12.0 million (CHF 12.6 million in prior year) relates to the acquisition of Lindt & Sprüngli Retail S.r.l.
The position “transfers” contains balance sheet reclassifications of net CHF 14.4 million from other intangible assets into right-of-use assets in 2021.
Research and development expenditures amounted to CHF 17.1 million (CHF 14.8 million in prior year) and are expensed as incurred.
Impairment test of goodwill and other intangible assets with infinite life segment “North America”
The impairment test of goodwill and other intangible assets with infinite life (i.e., “brands and intellectual property”) relates to the acquisition of Russell Stover Chocolates, LLC in 2014 and is performed on the operating segment “North America”. The impairment test of the position “brands and intellectual property” is, on one hand also performed on the segment “North America” and, on the other hand, performed on a stand-alone basis for the position brand and intellectual property only. The impairment test of goodwill is done using the discounted cash flow method, while the test for the brand and intellectual property is based on license income (“licence income approach”). Once the values-in-use are derived, these are compared against the carrying amounts.
The recoverable amount equals to the net present value of discounted future cash flows. It was determined based on planning assumptions over the next years plus a residual value. The planning assumptions are based on budget and mid-term plans, adjusted for, example given, expansion investments to ensure assets are only considered in their status quo. The EBIT-margin is based on historical data and industry specific benchmarks of the Lindt & Sprüngli Group. The discount rate reflects time value of money and characteristic risks for the asset being tested for impairment. The terminal growth rate is adjusted for inflation.
The main planning assumptions are summarized as follows:
|
|
2021 |
|
2020 |
||||
|---|---|---|---|---|---|---|---|---|
Period of cash flow projections |
|
5 years |
|
5 years |
||||
Annual sales growth1 |
|
6.5% |
|
5.5% |
||||
Annual EBIT-margin evolution |
|
Improvement |
|
Improvement |
||||
Terminal growth |
|
2.5% |
|
2.2% |
||||
Discount rate post tax |
|
5.4% |
|
5.5% |
||||
|
||||||||
Moreover, a sensitivity analysis is conducted in the goodwill impairment test. The following changes (increases and decreases) in the main planning assumptions are elaborated:
- Discount rate post tax 80 basis points
- Terminal growth 40 basis points
- Annual sales growth 200 basis points
- EBIT-margin evolution 200 basis points
No impairment need was identified in any of the sensitivity simulations.