ANNUAL REPORT 2011 - Kuehne + Nagel

84
Consolidated Financial Statements 2011 _ _ _ _ _ _ Other Notes
Impairment testing of goodwill
The Group has performed impairment tests of goodwill at the end
of the financial years 2011 and 2010. For the purpose of impairment
testing, goodwill is allocated to cash generating units which
are expected to benefit from the synergies of the corresponding
business combination. The allocation of goodwill to reportable
segments and geographical regions is illustrated in note 20.
For the goodwill allocated to the cash generating units, the
impairment tests are based on calculations of value in use. Cash
flow projections are based on actual operating results and threeyear
business plans. Cash flows beyond the three-year period are
extrapolated using estimated long-term growth rates. The growth
rates do not exceed the long-term average growth rate for the
logistics industry in which the cash generating units operate.
Future cash flows are discounted based on the weighted average
cost of capital (WACC), taking into account risks that are specific
to the cash generating units tested for impairment.
Key assumptions used for value-in-use calculations of goodwill:
Business acquired USCO ACR Group, Alloin Group, Multiple Total
Group Europe 1 France units 2
Year of acquisition
Carrying amount of
2001 2006 2009 2004–2011
goodwill in CHF million 83 291 88 234 696
Cash-generating unit within segment Contract Contract Road & Rail All
Logistics Logistics Logistics Segments
Basis for recoverable amount Value in use Value in use Value in use Value in use
Pre-tax discount rate in per cent 2011 12.2 11.6 –13.5 12.3 11.1 – 17.9
Pre-tax discount rate in per cent 2010 13.3 12.0–14.6 12.3 11.2–12.7
Projection period 3 years 3 years 3 years 3 years
Terminal growth rate in per cent 1.5 1.5 1.5 1.5
1 ACR Group Europe goodwill relates to Great Britain (CHF 98 million), France (CHF 69 million), the Netherlands (CHF 57 million) and other various countries (CHF 67 million).
2 Including cash generating units without significant goodwill Cordes & Simon Group, Germany (CHF 38 million), G.L. Kayser Group, Germany (CHF 36 million)
and J. Martens Group, Norway (CHF 30 million), RH Group, United Kingdom (CHF 53 million), Cooltainer, New Zealand (CHF 21 million), Eichenberg Group, Brazil
(CHF 23 million), J. Van de Put, the Netherlands (CHF 12 million).
Key assumptions have not changed from previous year with the
exception of discount rates used. For both 2011 and 2010, all
recoverable amounts exceeded their carrying amounts and consequently
no impairment of goodwill was recognised for the
years 2011 and 2010.
Management considers that it is not likely for the assumptions
used to change so significantly as to eliminate the excess. A
sensitivity analysis for the three major acquisitions – USCO
Group, ACR Group and Alloin Group – has been prepared with
the following outcome: