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12. Intangible fixed assets

 

Goodwill

Customer base

Brands and licenses

Development costs

Other intangible fixed assets

Total

1 January 2020

      

Acquisition prices

83.8

26.0

34.1

56.5

52.3

252.7

Cumulative amortization/impairments

-3.4

-17.2

-8.9

-25.0

-25.3

-79.8

Book value

80.4

8.8

25.2

31.5

27.0

172.9

       

Movements

      

Capital expenditure

   

2.6

13.7

16.3

Exchange rate differences

-10.3

-2.2

-0.2

-0.3

-0.3

-13.3

Amortization

 

-1.8

-0.5

-2.4

-5.5

-10.2

Net movement in book value

-10.3

-4.0

-0.7

-0.1

7.9

-7.2

       

31 December 2020

      

Acquisition prices

73.2

22.6

33.2

41.6

64.9

235.5

Cumulative amortization/impairments

-3.1

-17.8

-8.7

-10.2

-30.0

-69.8

Book value

70.1

4.8

24.5

31.4

34.9

165.7

       

Movements

      

Capital expenditure

   

2.6

11.5

14.1

Exchange rate differences

4.5

0.1

0.2

0.5

0.2

5.5

Acquisition of group companies

3.1

2.0

0.1

2.9

 

8.1

Amortization

 

-0.8

-0.5

-3.3

-8.5

-13.1

Impairment

  

-19.9

-3.4

 

-23.3

Other

    

0.9

0.9

Net movement in book value

7.6

1.3

-20.1

-0.7

4.1

-7.8

       

31 December 2021

      

Acquisition prices

81.0

25.6

34.1

47.9

75.5

264.1

Cumulative amortization/impairments

-3.3

-19.5

-29.7

-17.2

-36.5

-106.2

Book value

77.7

6.1

4.4

30.7

39.0

157.9

Amortization rates

 

7 - 20%

5 - 10%

5 - 33.3%

33.3%

 

The 'Other' line item relates to transfers from Property, plant, and equipment.

Goodwill impairment test

Goodwill is allocated to Corbion's cash-generating units identified as the operating segments. The operating segments Sustainable Food Solutions and Lactic Acid & Specialties represent the levels to which company goodwill is allocated for the purposes of impairment testing. Incubator does not contain any goodwill.

Key reasons for this approach are:

  • It represents a non-arbitrary, reasonable, and consistent basis for the allocation of goodwill.

  • The allocation is in line with the expected synergies at the time of an acquisition with benefits for more than one entity.

  • The allocation represents the lowest level where goodwill is monitored by the Board of Management, while not being larger than the operating segments.

Breakdown of the book value of the goodwill by segment

 

As at 31-12-2021

As at 31-12-2020

Sustainable Food Solutions

75.5

67.9

Lactic Acid & Specialties

2.2

2.2

Total operations

77.7

70.1

The recoverable amount of both segments is determined using a value-in-use method. The main assumptions used are derived from the financial and business plans for 2022 which have been approved by the Board of Management. From 2023 onwards a stable growth of 1% is taken into account in combination with a relatively constant cost structure.

The future cash flows are discounted on the basis of the WACC before tax.

Overview of the WACC used

 

As at 31-12-2021

As at 31-12-2020

 

pre-tax

post-tax

pre-tax

post-tax

Sustainable Food Solutions

6.9%

5.8%

8.2%

6.7%

Lactic Acid & Specialties

7.2%

5.8%

8.5%

6.7%

In addition, sensitivity analyses have been carried out in respect of the assumptions using:

  • A terminal value growth of 0%.

  • A discount rate of +1%.

Both assumptions applicable at the same time would not lead to any impairment.

Given the above assumptions and the outcome of analyses, the Board of Management has concluded that the value in use of both segments is not lower than the book value of the segments including goodwill.

Impairment testing other intangible fixed assets

In 2021, the following impairments were recorded:

FiberLive

A partial impairment of € 19.6 million (recorded partly in the 'Brands and licenses' and partly in the 'Development costs' category) related to our FiberLive activities (part of the Lactic Acid & Specialties segment). This was based on a reassessment of volume development and timing due to slower than expected technological developments. The impairment on the intangible fixed assets has been recorded on the income statement line item 'Research and development costs'. Further, an impairment of € 2.0 million on Property, plant, and equipment has been recorded on the income statement line item 'Cost of sales' for which reference is made to Note 10. 
The post-tax discount rate used is 5.8%. No terminal growth rate has been applied. The recoverable amount (based on value in use) of the projected cash flows underlying the impairment calculation amounts to € 2.4 million and is sensitive to various assumptions, especially the volume, technological and price development. 

FDCA

A full impairment of € 3.8 million (recorded in the 'Brands and licenses' category) related to our FDCA business (part of the Incubator segment) based on a reassessment of volume development and timing due to slower than expected technological developments. The impairment has been recorded on the income statement line item 'Research and development costs'.