[17] Goodwill and other intangible assets
With effect from 1 December 2016, the activities of the LMH, STILL and FS segments were allocated to the new Industrial Trucks & Services segment (see also note [41] for more details). The goodwill previously reported and monitored by senior management for internal purposes in the LMH and STILL segments is being transferred to the operating units in the Industrial Trucks & Services segment (LMH EMEA, STILL EMEA, KION APAC and KION Americas). The goodwill will therefore be reported and monitored at the level of the four operating units in the future.
Goodwill is broken down by segment as follows: > TABLE 061
Goodwill broken down by segment |
|
061 |
in € million |
2016 |
2015 |
Industrial Trucks & Services |
1,504.9 |
1,497.2 |
LMH EMEA |
813.4 |
817.1 |
STILL EMEA |
546.5 |
534.8 |
KION Americas |
23.5 |
23.5 |
KION Asia Pacific |
121.6 |
121.8 |
Supply Chain Solutions |
2,100.9 |
50.9 |
Dematic |
2,024.8 |
– |
Egemin Automation |
76.1 |
50.9 |
Total goodwill |
3,605.8 |
1,548.1 |
The change in goodwill in 2016 mainly resulted from the acquisition of Dematic and other businesses, from which goodwill totalling €1,962.1 million arose. Currency effects also had an impact. The change in the amount of goodwill in 2015 primarily resulted from the acquisition of Egemin Automation, which gave rise to goodwill of €50.9 million.
The Group intends to retain and further strengthen the Linde, STILL, OM STILL and KION brand names on a long-term basis. Brand names worth €466.3 million are assigned to the LMH EMEA CGU (31 December 2015: €466.5 million) and brand names worth €115.0 million to the STILL EMEA CGU (31 December 2015: €115.2 million). These assets are not amortised as they have an indefinite useful life. As at 31 December 2016, the brand names allocated to the KION APAC CGU had a residual value of €8.3 million (31 December 2015: €8.7 million), of which €8.3 million was attributable to brand names with an indefinite useful life (31 December 2015: €8.6 million). In 2016, a value of €349.7 million was attributed to the Dematic brand name and allocated to the Dematic CGU as part of purchase price allocation. As at 31 December 2016, this figure had risen to €367.6 million as a result of currency effects. A value of €1.5 million was originally attributed to the Retrotech brand name, which was integrated into the Egemin Automation CGU. This brand name is being amortised over six years. As a result, the brand names allocated to the Egemin Automation CGU increased to a carrying amount of €9.9 million as at 31 December 2016 (31 December 2015: €8.6 million), of which €8.6 million was attributable to brand names with an indefinite useful life (31 December 2015: €8.6 million). The KION brand name is allocated to the Corporate Services segment and had a carrying amount as at 31 December 2016 of €5.1 million (31 December 2015: €5.1 million). This asset is not amortised as it has an indefinite useful life. > TABLE 062
Intangible assets |
|
|
|
|
062 |
in € million |
Goodwill |
Brand names |
Technology & development |
Sundry intangible assets |
Total |
Balance as at 01/01/2015 |
1,497.1 |
595.4 |
210.0 |
110.1 |
2,412.5 |
Group changes |
48.9 |
8.6 |
– |
16.3 |
73.7 |
Currency translation adjustments |
2.2 |
0.4 |
0.9 |
0.7 |
4.2 |
Additions |
– |
– |
40.9 |
13.0 |
53.8 |
Disposals |
– |
– |
–0.3 |
–0.6 |
–0.9 |
Amortisation |
– |
–0.3 |
–53.3 |
–33.2 |
–86.9 |
Impairment |
– |
– |
–4.1 |
– |
–4.1 |
|
|
|
|
|
|
Balance as at 31/12/2015 |
1,548.1 |
604.1 |
194.1 |
106.2 |
2,452.5 |
Gross carrying amount as at 31/12/2015 |
1,548.1 |
605.6 |
451.3 |
297.0 |
2,902.1 |
Accumulated amortisation |
– |
–1.5 |
–257.3 |
–190.8 |
–449.6 |
|
|
|
|
|
|
Balance as at 01/01/2016 |
1,548.1 |
604.1 |
194.1 |
106.2 |
2,452.5 |
Group changes |
1,974.9 |
353.5 |
519.1 |
824.3 |
3,671.8 |
Currency translation adjustments |
82.8 |
14.9 |
22.5 |
34.9 |
155.1 |
Additions |
– |
– |
50.6 |
22.1 |
72.6 |
Disposals |
– |
– |
–0.0 |
–0.1 |
–0.1 |
Amortisation |
– |
–0.3 |
–57.0 |
–57.9 |
–115.2 |
|
|
|
|
|
|
Balance as at 31/12/2016 |
3,605.8 |
972.2 |
729.2 |
929.5 |
6,236.7 |
Gross carrying amount as at 31/12/2016 |
3,605.8 |
974.1 |
938.5 |
1,159.5 |
6,677.9 |
Accumulated amortisation |
– |
–1.9 |
–209.3 |
–230.0 |
–441.2 |
The carrying amount for technology and development assets went up to €729.2 million as at 31 December 2016 (31 December 2015: €194.1 million), principally as a consequence of the acquisition of Dematic. Development costs of €50.6 million were capitalised in the reporting year (2015: €40.9 million). Total research and development costs of €147.1 million (2015: €130.5 million) were expensed. Amortisation expenses of €57.0 million were also recognised (31 December 2015: €53.3 million); these expenses are reported under cost of sales.
Impairment losses of €4.1 million were recognised on capitalised development costs in 2015 to reflect the lack of opportunities to use them in future following the early discontinuation of production of a model series. They are reported in other expenses. The impairment losses related to the Industrial Trucks & Services segment.
Other intangible assets relate in particular to licences, patents, software and customer relationships.
The change to the basis of consolidation in 2016 was due almost entirely to the acquisition of the Dematic Group (2015: acquisition of Egemin Automation).