14. Intangible assets
The largest portion of the Group’s intangible assets is goodwill. Around half of the goodwill arose as a result of the acquisition of the SIG Group by Onex in 2015. The remaining half of the goodwill mainly arose as a result of the acquisitions of the bag-in-box and spouted pouch businesses (Scholle IPN) in 2022, Evergreen’s chilled carton business in Asia Pacific (“Evergreen Asia”) in 2022 and the remaining shares of the joint ventures in the Middle East in 2021. The other intangible assets mainly consist of trademarks, customer relationships and technology-related assets. The SIG trademarks have indefinite useful lives.
Composition of intangible assets
(In € million) |
|
Goodwill |
|
Trademarks |
|
Customer relationships |
|
Technology and other assets |
|
Total |
|---|---|---|---|---|---|---|---|---|---|---|
Cost |
|
3,185.3 |
|
373.8 |
|
1,025.6 |
|
263.1 |
|
4,847.8 |
Accumulated amortization and impairment losses |
|
– |
|
(7.9) |
|
(715.9) |
|
(161.9) |
|
(885.7) |
Carrying amount as of December 31, 2024 |
|
3,185.3 |
|
365.9 |
|
309.7 |
|
101.2 |
|
3,962.1 |
Cost |
|
3,034.8 |
|
376.1 |
|
385.8 |
|
169.2 |
|
3,965.9 |
Accumulated amortization and impairment losses |
|
– |
|
(15.3) |
|
(241.4) |
|
(116.9) |
|
(373.6) |
Carrying amount as of December 31, 2025 |
|
3,034.8 |
|
360.8 |
|
144.4 |
|
52.3 |
|
3,592.3 |
Carrying amount as of January 1, 2024 |
|
3,127.3 |
|
374.7 |
|
401.9 |
|
150.5 |
|
4,054.4 |
Additions |
|
– |
|
– |
|
– |
|
1.4 |
|
1.4 |
Amortization |
|
– |
|
(3.4) |
|
(96.2) |
|
(52.3) |
|
(151.9) |
Effect of movements in exchange rates |
|
58.0 |
|
(5.4) |
|
4.0 |
|
1.6 |
|
58.2 |
Carrying amount as of December 31, 2024 |
|
3,185.3 |
|
365.9 |
|
309.7 |
|
101.2 |
|
3,962.1 |
Carrying amount as of January 1, 2025 |
|
3,185.3 |
|
365.9 |
|
309.7 |
|
101.2 |
|
3,962.1 |
Additions |
|
– |
|
– |
|
– |
|
12.9 |
|
12.9 |
Amortization |
|
– |
|
(2.5) |
|
(43.7) |
|
(19.7) |
|
(65.9) |
Impairment losses |
|
|
|
(5.8) |
|
(106.6) |
|
(36.5) |
|
(148.9) |
Effect of movements in exchange rates |
|
(150.5) |
|
3.2 |
|
(15.0) |
|
(5.6) |
|
(167.9) |
Carrying amount as of December 31, 2025 |
|
3,034.8 |
|
360.8 |
|
144.4 |
|
52.3 |
|
3,592.3 |
Notes 4, 7 and 9 include further information about the impairment losses. The impairment losses recognized for the year ended December 31, 2025 relating to technology assets and capitalized development costs are included in the category “Technology and other assets”. The impairment losses on trademarks relate to the bag-in-box and spouted pouch trademarks.
The additions to “Technology and other assets” in the year ended December 31, 2025 are mainly due to capitalization of costs relating to the ongoing renewal of the Group’s IT-systems.
Research and development
Research and development costs (excluding depreciation and amortization expense) recognized as a component of general and administrative expenses amount to €107.5 million (€70.3 million excluding also impairment losses) for the year ended December 31, 2025 (€67.5 million for the year ended December 31, 2024).
In the year ended December 31, 2025, the Group has capitalized development costs of €1.5 million (€1.1 million in the year ended December 31, 2024). The capitalized costs (included in “Technology and other assets” in the table above) relate to minor projects. In the year ended December 31, 2025, the Group fully impaired the capitalized development cost relating to the Ultima filling machine project (see notes 4 and 7 for additional details).
Amortization of intangible assets
Amortization of intangible assets is recognized in the following components in the statement of profit or loss and other comprehensive income.
(In € million) |
|
Year ended |
|
Year ended |
|---|---|---|---|---|
Cost of sales |
|
44.2 |
|
96.9 |
Selling, marketing and distribution expenses |
|
2.8 |
|
3.7 |
General and administrative expenses |
|
18.9 |
|
51.3 |
Total amortization |
|
65.9 |
|
151.9 |
Impairment of intangible assets
Impairment losses of intangible assets are recognized in the following components in the statement of profit or loss and other comprehensive income (see note 4 for additional information).
(In € million) |
|
Year ended |
|
Year ended |
|---|---|---|---|---|
Cost of sales |
|
106.6 |
|
– |
Selling, marketing and distribution expenses |
|
5.8 |
|
– |
General and administrative expenses |
|
36.5 |
|
– |
Total impairment losses |
|
148.9 |
|
– |
Annual impairment tests of goodwill and SIG trademarks with indefinite useful lives
Goodwill with a carrying amount of €3,034.8 million as of December 31, 2025 (€3,185.3 million as of December 31, 2024) and the SIG trademarks with indefinite useful lives with a carrying amount of €360.8 million as of December 31, 2025 (€357.1 million as of December 31, 2024) are tested for impairment on an annual basis and whenever there is an impairment indicator. The annual impairment tests are performed in the fourth quarter each year.
Goodwill
The Group does not monitor goodwill at a lower level than Group level for internal management purposes but, for impairment testing purposes, goodwill must be allocated to a CGU, or group of CGUs, that is not larger than an operating segment before aggregation. The Group has allocated the goodwill for impairment testing purposes to its four operating (and reportable) segments.
The table below shows the allocation of goodwill to the Group’s four segments as well as the key assumptions used in the impairment test.
|
|
Year ended December 31, 2025 |
|
Year ended December 31, 2024 |
||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|
(In € million or %) |
|
Carrying amount |
|
Growth rate |
|
Pre-tax discount rate |
|
Carrying amount |
|
Growth rate |
|
Pre-tax discount rate |
Europe |
|
999.0 |
|
2.50% |
|
11.1% |
|
999.0 |
|
2.50% |
|
10.5% |
IMEA |
|
560.5 |
|
2.50% |
|
11.2% |
|
582.6 |
|
2.50% |
|
11.1% |
APAC |
|
839.2 |
|
2.50% |
|
9.7% |
|
896.9 |
|
2.50% |
|
8.7% |
Americas |
|
636.1 |
|
2.50% |
|
11.9% |
|
706.8 |
|
2.50% |
|
10.5% |
Total goodwill |
|
3,034.8 |
|
|
|
|
|
3,185.3 |
|
|
|
|
For the impairment test of goodwill, the recoverable amount of the respective segments has been estimated with reference to value in use. In assessing the value in use, the estimated future cash flows (in Euros) have been discounted to their present values using a pre-tax discount rate that reflects current market assessments of the time value of money as well as the risks specific to each segment. The weighted average cost of capital (“WACC”) is used to determine the discount rate. Cash flows for the first five years are based on financial plans approved by management. Cash flows after the five-year internal planning period are extrapolated using terminal growth rates that are aligned with the estimated long-term inflation. The terminal growth rates used by the Group for impairment testing purposes do not exceed the estimated long-term growth rates in the packaging industry.
No impairment of goodwill was identified in either of the periods. For both the years ended December 31, 2025 and 2024, the estimated recoverable amounts of the segments significantly exceeded the respective carrying amounts. Management considers it unlikely that any reasonably possible change in the key assumptions used, including changes in the assessed future cash in- and outflows (revenue growth and EBITDA margin), terminal growth rate and WACC, would result in an impairment loss of goodwill in any of the segments. There is no assurance that the Group’s experience to date, which has been reflected in the assessment of future cash flows and other assumptions, will be representative of future periods.
SIG trademarks with indefinite useful lives
The value of the SIG trademarks with indefinite useful lives is associated with the Group as a whole. Trademarks are tested for impairment at Group level as all SIG entities benefit from the trademarks. The entities are charged a royalty fee for the use of the SIG trademarks.
For the impairment test, the recoverable amount has been estimated with reference to value in use. The assessed royalty fees have been discounted to their present value using a pre-tax discount rate at Group level of 11.2% (9.9% in the 2024 annual impairment test) and a terminal growth rate at Group level of 2.5% (2.5% in the 2024 annual impairment test). The royalty fees for the first five years are based on financial plans approved by management. The same methodology as for the goodwill impairment test is used to extrapolate cash flows after the five-year internal planning period and to determine the discount rate.
No impairment of the SIG trademarks with indefinite useful lives was identified in either of the periods. Management considers it unlikely that any reasonably possible change in the assumptions used (royalty fees, terminal growth rate and WACC) would result in an impairment loss.
Accounting policy
Goodwill arising on business combinations is measured at cost less accumulated impairment losses. The SIG trademarks are assessed to have indefinite useful lives considering the long history of the SIG brand and its expected future continuous use. They are measured at cost less accumulated impairment losses. Other intangible assets, including customer relationships, Scholle trademarks and technology assets, have finite useful lives and are measured at cost less accumulated amortization and accumulated impairment losses. Gains and losses on disposals of intangible assets are recognized in profit or loss as part of other income or expenses.
Development expenditure is capitalized only if the expenditure can be measured reliably, the product or process is technologically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete the development and to use or sell the asset. If the capitalization criteria are not met, development expenditure is recognized in profit or loss as incurred. Expenditure on research activities is recognized in profit or loss as incurred.
Intangible assets with finite useful lives are amortized on a straight-line basis over their estimated useful lives, with amortization generally recognized in profit or loss. The estimated useful lives of amortizable intangible assets for the current and comparative periods are as follows:
Customer relationships 10 to 15 years
Technology assets (including patented and non-patented technology and know-how) 6 to 10 years
Other intangible assets (including software) 3 to 6 years
Capitalized development costs are amortized over the period that is assessed to reflect the expected useful life of the particular innovation (up to 15 years).
Impairment of goodwill and other intangible assets
Intangible assets with finite useful lives are reviewed regularly and at least annually to identify whether there is an impairment indicator, or an indicator that a previously recognized impairment loss should be reversed. Goodwill and the SIG trademarks with indefinite useful lives are tested for impairment on an annual basis and whenever there is an impairment indicator. See note 5.5.3 for further details.
Significant judgments and estimates
Significant judgment is involved in the annual impairment testing of goodwill and the SIG trademarks with indefinite useful lives. The judgments and assumptions used in estimating the recoverable amount are included above under “Annual impairment tests of goodwill and trademarks with indefinite useful lives”, where the outcome of the annual impairment tests is also described.
A change in the Group’s intended use of other intangible assets or changed market conditions may trigger a future impairment or a reversal of an impairment loss. Value in use calculations require management to estimate the future cash flows expected to arise from an individual asset or CGU and to determine a suitable discount rate to calculate present value. See note 5.4 for additional remarks.