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Goodwill
Goodwill increased from € 60.7 million in the previous year to € 82.0 million in 2012.
The change is attributable mainly to the acquisition of Midwest Instrument Company, USA.
The divisions of the operating subgroups (business groups) in the Heraeus Group are
the cash generating units to which the acquired companies are assigned. In individual
cases, a cash generating unit is also formed one level below the divisions, at the level
of business units. For Heraeus Electro-Nite, the country companies are used as the cash
generating units.
The discounted cash flow method (DCF method) is used to determine the value in use
of the respective unit based on the anticipated free cash flows. A total planning period
of five years is used. The data for the first three years is obtained from the current midterm
planning. General assumptions concerning additional price and cost developments
in the respective unit are used for the subsequent years. The long-term growth rates are
dependent on the respective division and are between 0% and 2% (previous year: between
0% and 2%). The weighted average costs of capital (WACC) of the Group or of the respective
subgroup plus a risk premium after tax are used as the discount rate. Discount rates
between 8% and 10% p.a. (previous year: between 8% and 12% p.a.) are currently
being applied.
Goodwill is broken down among the business groups as follows:
in € million deC. 31, 2012 deC. 31, 2011
Heraeus Precious Metals 35.6 33.7
Heraeus Materials Technology 21.0 21.8
Heraeus Electro-Nite 19.4 3.7
Heraeus Dental 4.8 0.3
Heraeus Noblelight 1.2 1.2
Goodwill 82.0 60.7
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