We seal damp and protect

NOTES – GROUP
14 Intangible assets
sek m 2015 2014
Capitalized expenditure for development work 139 138
Capitalized expenditure for IT 137 122
Concessions, patents, licenses, trademarks and similar rights 412 405
Goodwill 10,910 10,485
Market and customer-related intangible assets 562 581
Advance payments related to intangible assets 67 70
Total 12,227 11,801
Impairment testing of goodwill and other assets
Goodwill and other assets are tested for impairment annually or more frequently if there are indications of a
decline in value. This testing is based on defined cash-generating units matching the business areas applied
in segment reporting. For a more detailed presentation of the Group’s business areas, see pages 12–21.
The recoverable amount has been determined on the basis of calculations of value in use. These
calculations are based on internal budgets and forecasts of the next five years. The most important assessments
relate to sales growth during the forecast period and the operating margin trend. The assessments of
management are based on both historical experience and current information relating to the market trend.
Following the forecast period, the cash flows were extrapolated using an assumed sustainable rate of growth
of 2 percent (2), which is in line with the assessed sustainable growth rate in the respective market.
Changes in working capital and in capital expenditure requirements have also been taken into account.
The projected future cash flows according to these assessments thus form the basis for the calculation.
When calculating the present value of future cash flows, a weighted average cost of capital (WACC) of 8.0
percent (8.0) after tax was applied to all business areas. Since all of the segments have a similar risk profile
and operate in the same markets, the risk in the cash flows is similar, which justifies use of the same return
requirement. Reconciliation was also conducted against an external assessment of a reasonable cost of
capital. The net debt/equity ratio was assumed to be 75 percent (75).
The calculations indicated no need for impairment in any of the business areas. A sensitivity analysis
shows that, with a rate of growth reduced by 50 percent beyond the next five years and an increase in the
cost of capital of 1 percentage point to 9.0 percent after tax, there would still be no need for impairment
for any of the business areas. A 1-percentage point reduction in estimated sales growth during the forecast
period would also not lead to the need for any impairment.
Goodwill by segment
sek m 2015 2014
Trelleborg Coated Systems 1,937 1,893
Trelleborg Industrial Solutions 1,311 1,347
Trelleborg Offshore & Construction 1,386 1,210
Trelleborg Sealing Solutions 5,400 5,454
Trelleborg Wheel Systems 877 582
Group items –1 –1
Total 10,910 10,485
In addition to goodwill, the Group has trademarks totaling SEK 339 M (344) with limited useful lives.
14
Capitalized
expenditure for
development work
Capitalized
expenditure for IT
Concessions, patents,
licenses and
trademarks
Goodwill
Market and
customer-related
intangible assets
Advance payments
related to
intangible
assets
Total intangible
assets
sek m 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014 2015 2014
Accumulated cost 184 171 516 489 740 730 11,232 11,058 644 631 78 70 13,394 13,149
Accumulated amortization according
to plan –45 –33 –379 –369 –324 –321 –97 –192 –82 –50 –11 0 –938 –965
Accumulated impairment losses 0 0 0 2 –4 –4 –225 –381 – – – – –229 –383
Carrying amount 139 138 137 122 412 405 10,910 10,485 562 581 67 70 12,227 11,801
Balance, January 1 138 56 122 100 405 351 10,485 8,576 581 32 70 58 11,801 9,173
Acquisitions – 72 – 0 0 25 535 1,031 15 540 – 0 550 1,668
Divested operations – – – – – – –3 –39 – – – – –3 –39
Capital expenditures 12 7 19 20 19 6 – – 0 1 23 29 73 63
Divestments and disposals – – – –1 – – – – – – 0 – 0 –1
Amortization according to plan for
the year –13 –5 –37 –31 –15 –13 – – –42 –15 – – –107 –64
Impairment losses for the year – – 0 – – – –9 0 – – – – –9 0
Reclassifications – – 33 27 11 4 1 – 0 – –23 –21 22 10
Translation difference for the year 2 8 0 7 –8 32 –99 917 8 23 –3 4 –100 991
Carrying amount 139 138 137 122 412 405 10,910 10,485 562 581 67 70 12,227 11,801
Amortization for the year, by function
Cost of goods sold –1 –1 –9 –8 –4 –2 – – –1 –1 – – –15 –12
Selling expenses – –2 –3 –3 –1 0 – – –2 –4 – – –6 –9
Administrative expenses –1 0 –24 –19 –7 –7 – – –2 0 – – –34 –26
Research & development costs –1 –1 –1 –1 –2 –3 – – – – – – –4 –5
Other operating expenses –10 –1 0 0 –1 –1 – – –37 –10 – – –48 –12
Total amortization –13 –5 –37 –31 –15 –13 – – –42 –15 – – –107 –64
Annual Report 2015 Trelleborg AB 97