Annual Report 2014

Etex Annual Report 2014
Financial report
Consolidated financial statements
Impairment testing
In December 2014, impairment reviews were performed for a certain number of assets where impairment indicators arose. The carrying
value of capital employed has been compared with the recoverable amount of the cash-generating unit. This review did not result in
any impairment. The recoverable amount of the cash-generating units was based on its value in use. The value in use was determined
by discounting the future cash flows generated from the continuing use of the unit and was based on the following key assumptions,
excluding Argentina (where discount rate amounts to 29.5 % and growth rate is consistent with inflation):
• Cash flows were projected based on actual operating results and the 3 year business plan (extended to 10 years
when the financial projections of a long-term strategy development is available for the cash-generating unit),
• Cash flows for further periods were extrapolated using a constant growth rate in a range of 1.5 % to 5 %
depending on the countries involved and their respective inflation rates,
• Cash flows are discounted using the weighted average cost of capital (WACC) in a range of 7.9 % to 12.0 %
depending on the countries involved (a range of 9.83 % to 12.75 % in 2013).
In connection with the impairment testing process, the future cash flows were subjected to stress tests that included changes
in individual macroeconomic parameters as part of a sensitivity analysis. More specifically, an increase of 100 basis points in
the WACC indicated a potential need for an impairment charge of € 7.8 million.
Note 8 – Goodwill and business combinations
8.1 Reconciliation of the carrying amount of goodwill
IN THOUSANDS OF EUR 2013 2014
Gross book value 262,631 252,264
Accumulated impairment losses -21,689 -21,516
Net book value at the beginning of the year 240,942 230,748
Additions through business combinations 4,776 -
Translation differences -3,623 -1,519
Disposals -11,347 -
Impairment loss of the year - -637
Net book value at the end of the year 230,748 228,592
Gross book value 252,264 251,119
Accumulated impairment losses -21,516 -22,527
The impairment loss of € 637 thousand relates to the company A+B, producing paint and sprays for passive fire protection, with
operations in Russia and Ukraine. In 2013, the € 11,347 thousand disposal movement relates to the divested La Chape Liquide and
Gyvlon subsidiaries to which part of the Gypsum Europe goodwill value had been allocated.
The main components of the carrying amount of goodwill are the following:
IN THOUSANDS OF EUR 2013 2014
Creaton, Germany (2005) 92,893 92,893
Gypsum Europe (2011) 51,492 51,492
Gypsum Brazil (2011) 16,688 16,631
Cafco (2007) 16,199 16,199
Microtherm (2010) 14,832 14,832
Projiso (2006) 11,196 11,196
Ivarsson, Denmark (2005) 8,522 8,538
Intumex (2000) 8,504 8,504
A+B (2013) 4,466 2,351
Others 5,956 5,956
Total 230,748 228,592
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