6.12 Intangible assets

Intangible assets consist of goodwill and other identifiable intangible assets.

Cost

x € 1,000

Impairment losses and amortisation

x € 1,000

Carrying amount

x € 1,000

The composition of the carrying amount for goodwill and other intangible assets at year-end 2022 is as follows:

Acquisition

x € 1,000

Other goodwill mainly refers to the Infra as cash-generating unit (€13 million). Other intangible assets mainly refers to assets created in-house and software licences.

In 2022, the Group acquired Dynniq Energy BV. Heijmans performed a purchase price allocation that was completed in 2022. The goodwill of €5.9 million is the difference between the purchase sum and the fair value of the net identified assets acquired. The goodwill can be explained by the fact that this acquisition strengthens the Group’s position in high, medium and low-voltage energy infrastructure, which offers good prospects for growth as a result of planned investment volumes following from the energy transition. The fair value of €2.1 million for the 'Dynniq Energy' trade name in the opening balance sheet, recognised in Other intangible assets, was written off during 2022 since that trade name will no longer be used.

The remaining amortisation term for the intangible asset that was part of the Burgers Ergon acquisition is 4 years, with an annual amortisation charge of €1.0 million.

The amortisation of the other intangible assets is recognised in the statement of profit or loss under other operating expenses.

Impairmenttests

Goodwill is tested annually for impairment, based on the relevant cash-generating unit. For an explanation of the calculation of the recoverable amount, reference is made to the accounting policies.

The impairment tests are based on the value in use calculated by means of the discounted cash flow method. The pre-tax WACC (weighted average cost of capital) used for this calculation amounts to 12.2% (2021: 10.4%), corresponding to a discount rate after tax of 9.2% (2021: 8.1%). The WACC used was set after incorporating the effects of IFRS 16. The WACC used in 2022 was set after incorporating the effects of IFRS 16. The WACC used in 2021 did not incorporate the effects of IFRS 16 and so is not fully comparable.

The value in use of the cash-flow generating business units is based on their expected future cash flows. The period adopted to determine the present value of cash flows is indefinite. In the determination of future cash flows, the medium-term planning for the relevant cash-flow generating unit is used. The assumptions underlying the medium-term planning are partly based on historical experience and external information sources. The medium to long-term planning generally covers a period of 5 years. Cash flows after 5 years are extrapolated using a growth rate of 0% (2021: 0%).

The recoverable amount calculated for the impairment test depends among other things on the growth rate used and the period over which the cash flows are realised. Other important variables are the expected revenue growth, probable margins and working capital requirements.

Expected cash flows are discounted using a pre-tax WACC of 12.2%. If the pre-tax WACC was set 1 percentage point higher, this would not lead to an impairment. Cash flows beyond 5 years are extrapolated without growth percentages. Changes that can reasonably be expected in key variables do not result in an impairment.