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 2023 is as follows:

Acquisition

x € 1,000

Other goodwill is mainly related to the cash-generating unit (CGU) Infra (€ 13 million). Other intangible assets is mainly related to assets created in-house, software licences and the fair value of the Van Wanrooij’s order book.

In 2022, the Group acquired Van Wanrooij. Heijmans performed a provisional purchase price allocation in 2023 and will make this definitive in 2024. The goodwill of € 90.9 million is the difference between the purchase sum and the fair value of the net identified assets acquired. These assets have been re-measured to market value as part of the purchase price allocation. At Van Wanrooij, this resulted in a substantial fair value step-up of the inventory of land holdings. The remaining goodwill is explained by the fact that the Group has increased its position in property development and construction with this acquisition. Van Wanrooij is an extremely profitable company with a positive outlook, which is in good proportion to the size of the goodwill. The fair value of the order book of Van Wanrooij Bouw amounted to € 6.4 million at the moment of the acquisition on 5 September 2023 and has been recognised under Other intangible assets and will be amortised within one year. See also note 6.2 Business combinations.

The remaining amortisation term for the intangible asset that was part of the Burgers Ergon acquisition was three years at year-end 2023, 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.

Impairment tests

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 valuation using the discounted cash flow method. Future cash flows are discounted using the post-tax WACC. The WACC in 2023 was 9.6% (2022: 9.2%). The WACC is calculated using various components on the basis of publicly available information. This includes macro-economic indicators, as well as data from other listed companies used as a peer group.

The value in use of the cash-flow generating business units is based on their expected future cash flows. The 2024 and 2025 budget is the basis for the cash flow projection. Revenue and gross margin in the budget are based on the order book, past experience and strategic ambitions. For the period from 2026 to 2030, a growth rate of 1.2% (2022: 0%) is assumed, based on estimates for economic growth in the Netherlands. For the period after 2030 (the so-called terminal value in the discounted cash flow method), a growth rate of 0% (2022: 0%) is assumed. The gross margin for the period after 2026 was assumed to be constant from a conservative point of view and based on an average of the budget and past margins.

A sensitivity analysis was performed at Building & Technology and Infra on the basis of three significant key parameters that have an impact on Goodwill impairment: WACC, growth rate and gross margin. With respect to the relevant cashflow generating units, changes that can reasonably be expected in key variables would not result in an impairment.

Heijmans acquired Van Wanrooij on 5 September 2023 and subsequently carried out a provisional purchase price allocation (PPA) in which it determined Van Wanrooij's goodwill. In this purchase price allocation, the company's assets were valued and the difference between the market value and acquisition price is the goodwill. The results realised 2023, the outlook for 2024 and market developments have developed positively between the valuation date and year-end, so there is no impairment trigger.