4.6Goodwill
For impairment testing, goodwill acquired through business combinations and brands with an indefinite useful life are allocated to the respective cash-generating unit (CGU) and monitored by management. Rieter tests whether goodwill and intangible assets with an indefinite useful life have suffered any impairment on an annual basis. For 2025 and 2024, the recoverable amount of the CGUs was determined on value-in-use calculations.
A segment-level summary of allocation of goodwill, the CGU, and the respective key assumptions used, are presented below:
CHF million | Machines & Systems | SSM | Accotex | Temco | Bräcker | After Sales | 2025 |
|---|---|---|---|---|---|---|---|
Machines & Systems | 56.1 | – | – | – | – | – | 56.1 |
Components | – | 43.5 | 16.0 | 19.5 | 5.0 | – | 84.0 |
After Sales | – | – | – | – | – | 48.9 | 48.9 |
Goodwill | 189.0 | ||||||
Key assumptions: | |||||||
Sales volume (% growth) | – | 15.8% | 16.9% | 12.6% | 8.6% | – | |
Long-term sales growth rate | 1.9% | 1.2% | 2.0% | 2.0% | 1.6% | 1.7% | |
Pre-tax discount rate | 14.5% | 13.1% | 15.3% | 14.4% | 14.0% | 13.7% |
CHF million | Machines & Systems | SSM | Accotex | Temco | Bräcker | After Sales | 2024 |
|---|---|---|---|---|---|---|---|
Machines & Systems | 57.0 | – | – | – | – | – | 57.0 |
Components | – | 43.5 | 16.2 | 19.7 | 5.0 | – | 84.4 |
After Sales | – | – | – | – | – | 50.6 | 50.6 |
Goodwill | 192.0 | ||||||
Key assumptions: | |||||||
Sales volume (% growth) | – | 18.7% | 10.6% | 12.2% | – | – | |
Long-term sales growth rate | 1.7% | 1.5% | 2.0% | 2.0% | – | 1.8% | |
Pre-tax discount rate | 14.2% | 12.9% | 14.1% | 12.2% | – | 13.2% |
Based on the performed impairment tests using the key assumptions mentioned above, there is no need for an impairment charge at December 31, 2025 and 2024.
Gross profit and cash flows depend on sales volume, sales growth and related cost of goods sold. The results of the impairment tests for Machines & Systems, SSM, Bräcker and After Sales confirm the carrying amount of the respective CGUs without an indication of impairment. No reasonably possible changes in key assumptions would cause the recoverable amount to equate to the carrying amount of goodwill.
Regarding Accotex and Temco, there is currently no indication of a long-term decrease in the market, the market share, or the profitability. Gross profit and cash flows depend on sales volume, sales growth and related cost of goods sold. The results of the impairment tests confirm the carrying amount of the CGUs without an indication for impairment, but showed only a small headroom for Accotex and Temco. Rieter performed sensitivity analyses in order to determine which reasonably possible changes in key assumptions would cause the recoverable amount to fall short of the carrying amount of goodwill.
The sensitivity analysis for Accotex showed that the recoverable amount would fall short of the carrying amount of Accotex if the pre-tax discount rate would be increased by 1.0 percentage points (2024: +2.0 percentage points), the sales volume growth would be reduced by 1.5 percentage points (2024: -3.4 percentage points), or the long-term sales growth rate would be decreased by 1.2 percentage points (2024: -2.2 percentage points). The recoverable amount of Accotex exceeds the carrying amount by CHF 3.6 million (2024: CHF 7.9 million).
The sensitivity analysis for Temco showed that the recoverable amount would fall short of the carrying amount of Temco if the pre-tax discount rate would be increased by 0.5 percentage points (2024: no reasonable change), the sales volume growth would be reduced by 0.6 percentage points (2024: no reasonable change), or the long-term sales growth rate would be decreased by 0.6 percentage points (2024: no reasonable change). The recoverable amount of Temco exceeds the carrying amount by CHF 2.2 million (2024: CHF 16.8 million).
Sales growth rates are calculated as compound average growth rate derived from the underlying business plans. Long-term sales growth rates are based on long-term inflation assumptions assuring rates are in line or below external market information provided by industry specialists. Pre-tax discount rates are determined on the basis of the weighted cost of capital using market participants information.
Significant accounting estimates and judgments
For the goodwill impairment test, Rieter uses financial plans for the next four years as approved by the Board of Directors and the Group Executive Committee. These plans are extrapolated to a period of five years. Management thereby makes assumptions related to sales growth rates and profit margins. Expected future cash flows are discounted with a market-specific discount rate.