18. Goodwill

Goodwill amounts to €3,780 million (previous year: €4,045 million).

In 2012, the measurement of stock tender rights resulted in a goodwill decrease of €19 million at Media-Saturn (previous year: decrease of €52 million).

In 2009, the non-controlling shareholders of METRO Cash & Carry Romania were granted stock tender rights by METRO GROUP. The subsequent measurement of these stock tender rights resulted in a goodwill decrease of €2 million (previous year: decrease of €26 million).

In the context of the divestment of the cash & carry business in the United Kingdom, goodwill of MAKRO Cash & Carry UK amounting to €37 million was reclassified to “assets held for sale”. This was fully impaired as part of the write-down of this disposal group to its fair value less costs to sell.

By contractual agreement of 30 November 2012, METRO GROUP and the French retail group Groupe Auchan agreed on the sale of Real’s Eastern European business to Groupe Auchan. Since the agreement’s effective date, all assets and liabilities that fall under the agreement are treated as a disposal group pursuant to IFRS 5. In this context, goodwill of Real Poland and Real Russia was reclassified to the item “assets held for sale”.

At the closing date, the breakdown of goodwill among the major cash-generating units was as shown below:

 Download XLS (18 kB)

 

31/12/2011

31/12/2012

 

 

 

 

 

 

 

WACC

 

WACC

 

€ million

%

€ million

%

Real Germany

1,083

6.7

1,083

5.9

METRO Cash & Carry France

398

6.5

398

5.9

METRO Cash & Carry Netherlands

352

7.0

352

6.0

METRO Cash & Carry Poland

255

7.4

258

6.6

METRO Cash & Carry Germany

223

6.7

223

5.9

Media-Saturn Germany

218

8.2

211

7.7

METRO Cash & Carry Hungary

239

8.9

189

8.7

METRO Cash & Carry Italy

171

7.1

171

6.6

METRO Cash & Carry Belgium

145

6.8

145

6.0

METRO Cash & Carry Portugal

91

7.9

91

8.5

Redcoon group

83

9.3

83

8.8

Media-Saturn Italy

73

8.7

71

8.5

Galeria Kaufhof department stores Belgium

57

7.1

57

6.9

METRO Cash & Carry Romania

58

9.0

56

8.5

METRO Cash & Carry Spain

51

6.9

51

7.2

Real Poland

132

7.4

0

6.6

Other companies < €50 million or corporate assets

416

 

341

 

 

4,045

 

3,780

 

In accordance with IFRS 3 in conjunction with IAS 36, goodwill is tested for impairment once a year. This is carried out at the level of a group of cash-generating units. In the case of goodwill, this group is the organisational unit sales line per country. In the impairment test, the cumulative carrying amount of the group of cash-generating units is compared with the recoverable amount. The recoverable amount is defined as the fair value less costs to sell, which is calculated from discounted future cash flows. Expected future cash flows are based on a qualified planning process under consideration of the intra-Group experience as well as macroeconomic data collected by third-party sources. As a rule, the detailed planning period comprises 3 to 6 years. As in the previous year, the growth rates considered at the end of the detailed planning period are generally 1.0 percent. The capitalisation rate as the weighted average cost of capital (WACC) is determined using the capital asset pricing model. In the process, an individual peer group is assumed for all groups of cash-generating units operating in the same business segment. In addition, the capitalisation rates are determined on the basis of an assumed basic interest rate of 2.5 percent (previous year: 4.0 percent) and a market risk premium of 6.5 percent (previous year: 5.0 percent) in Germany. Country-specific risk premiums based on the respective country rating are applied to the equity cost of capital and to the debt cost of capital. The capitalisation rates after taxes determined individually for each group of cash-generating units range from 5.9 to 10.7 percent (previous year: 6.4 to 15.0 percent).

As of 31 December 2012, the prescribed annual impairment test confirmed the recoverability of all capitalised goodwill with the exception of METRO Cash & Carry Hungary and METRO Cash & Carry Greece. Goodwill impairments of €50 million and €20 million, respectively, were conducted for METRO Cash & Carry Hungary and METRO Cash & Carry Greece.

In addition to the impairment test, 3 sensitivity analyses were conducted for each group of cash-generating units. The first sensitivity analysis was based on the assumption of a 1 percentage point lower growth rate. In the second sensitivity analysis, the interest rate for each group of cash-generating units was raised by 10.0 percent. In the third sensitivity analysis, a lumpsum discount of 10.0 percent was applied to assumed perpetual EBIT. With the exception of METRO Cash & Carry Germany and Real Germany, these changes to the underlying assumptions would not result in impairment losses at any of the groups of cash-generating units. In the goodwill impairment test at METRO Cash & Carry Germany, the fair value less costs to sell exceeded the carrying amount by €64 million. The corresponding amount for Real Germany was €47 million. Assuming a capitalisation rate of 6.2 percent rather than 5.9 percent or a lumpsum discount of 7.1 percent on assumed perpetual EBIT, the fair value less costs to sell of METRO Cash & Carry Germany would correspond to the carrying amount. Assuming a capitalisation rate of 6.1 percent rather than 5.9 percent or a lumpsum discount of 3.7 percent on assumed perpetual EBIT, the fair value less costs to sell at Real Germany would correspond to the carrying amount.