18. Goodwill and other intangible assets

The acquisition costs as well as accumulated amortization and impairment of intangible assets consist of the following:

The carrying amounts at December 31, 2025 and 2024 are as follows:

In addition to additions, disposals and amortization, the changes in intangible assets also result from positive exchange rate effects and, in particular, from the reclassification as part of the classification of the Water Management business unit as a discontinued operation.

The “Patents and technology” item at December 31, 2025 comprises patents in the amount of EUR 114 thousand (Dec 31, 2024: EUR 726 thousand) and technology in the amount of EUR 4,811 thousand (Dec. 31, 2024: EUR 7,318 thousand). The unpatented technologies include specific process expertise in the production process identified as part of company acquisitions.

Internally generated intangible assets include development costs for internally generated technologies in the amount of EUR 6,309 thousand (Dec 31, 2024: EUR 7,474 thousand) and for internally developed software in the amount of EUR 352 thousand (Dec 31, 2024: EUR 345 thousand).

The item “Other intangible assets” consists mainly of prepayments.

In the previous year, customer relationships mainly included the customer list identified as part of the acquisition of NDS in the amount of EUR 78,707 thousand as at December 31, 2024. In addition, there were intangible assets with indefinite useful lives in fiscal year 2024 in the amount of EUR 30,706 thousand, which mainly resulted from the acquisition of NDS in 2014 and were allocated to the CGU Americas. These brands and the associated customer list were reclassified to assets held for sale in connection with the classification of the Water Management business unit in accordance with IFRS 5. Accordingly, these assets are no longer part of intangible assets with indefinite useful lives as of December 31, 2025.

The intangible assets were unsecured on December 31, 2025 and 2024.

The estimated useful lives for other intangible assets are as follows:

•Patents: 5 to 10 years

•Customer lists: 4 to 20 years

•Technology: 10 to 20 years

•Licenses, rights: 3 to 5 years

•Trademarks: indefinite or 20 years

•Software: 3 to 5 years

The change in goodwill is summarized as follows:

The discontinued operation was part of several goodwill-bearing cash-generating units (CGUs). This meant that goodwill had to be allocated on a pro rata basis. Goodwill was allocated on the basis of the relative fair values to the discontinued operation and the remaining operation of the respective CGU at the time of classification as held for sale and is included in the item “Allocation to discontinued operation”.

 

Impairment tests for goodwill

Goodwill is allocated to the Group’s cash-generating units (CGUs) identified according to geographical areas. A summary of the goodwill allocation is presented below:

The recoverable amount of a goodwill-bearing CGU is based on the fair value less costs to sell, which was estimated using discounted cash flows. In view of the input factors used for this valuation technique, the fair values determined are to be classified as level 3 fair values NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES – DETERMINATION OF FAIR VALUES. The determination of future cash flows is based on internal corporate planning, which is prepared using certain Group-wide assumptions “from the bottom up” (bottom-up method) and covers a period of five years. The underlying parameters, such as revenue growth and margins, are determined on the basis of knowledge gained in the past, current economic results and forecasts by external industry experts such as the VDMA industry association, the German Association of the Automotive Industry (VDA) and LMC Automotive (LMCA). The average revenue growth rates in the detailed planning period are 2.5% for the EMEA CGU (2024: 5.7%), 1.1% for the Americas CGU (2024: 10.2%) and 3.5% for the Asia-Pacific CGU (2024: 10.3%). The average EBIT margin for the same planning period is 6.7% (2024: 9.6%) for the EMEA CGU, 3.7% (2024: 10.4%) for the Americas CGU and 8.3% (2024: 9.6%) for the Asia-Pacific CGU.

For the extrapolation of cash flows beyond this five-year period, the estimated growth rates given below are used. NORMA Group believes that these growth rates do not exceed the long-term average growth rate for the geographical area of the respective CGU.

The fair value less costs to sell is mainly determined by the terminal value (present value of the perpetual annuity), which is particularly sensitive to changes in the assumptions for the long-term growth rate and the discount rate. Both assumptions are determined individually for each cash-generating unit. The discount rates are based on the concept of weighted average cost of capital (WACC).

The further key assumptions used for fair value less costs to sell calculations are as follows:

The discount rates applied are after-tax interest rates and reflect the specific risk of the respective CGU. The corresponding pre-tax interest rates are 13.6% (2024: 12.9%) for the EMEA CGU, 12.2% (2024: 11.7%) for the Americas CGU and 14.4% (2024: 13.3%) for the Asia-Pacific CGU.

The above assumptions relate to the annual impairment test of goodwill, which is regularly carried out as of September 30. In addition to the annual impairment test, further impairment tests were carried out in fiscal year 2025 due to trigger events within the meaning of IAS 36.12, including as of June 30, 2025 due to negative variances in business development from the planning assumptions and as of July 31, 2025 due to the IFRS 5 classification. These tests did not result in any need for impairment.

As part of the impairment test carried out as of September 30, 2025, a non-cash impairment requirement of EUR 50,000 thousand was identified for the EMEA CGU. The impairment requirement resulted primarily from reduced revenue and margin expectations for the coming fiscal years.

The impairment was allocated in full to the goodwill of the EMEA CGU and recognized in the Consolidated Financial Statements under “Depreciation, amortization and impairment” within continuing operations.

A sensitivity analysis for each CGU considers possible changes in key assumptions. The sensitivity analysis was performed in isolation for all significant factors, i.e., a change in the fair value of a cash-generating unit is only caused by a decrease or increase in a given factor.

For the CGU Americas, an increase in the discount rate of around 0.02 percentage points would result in the recoverable amount being equal to the carrying amount under the isolated sensitivity analysis. A reduction in the long-term growth rate of around 0.03 percentage points would also result in the recoverable amount and carrying amount being equal. A reduction in EBIT in the terminal value of 0.29% would mean that there would no longer be any headroom.

For the Asia-Pacific CGU, there would be no need for impairment in the event of possible changes to the key measurement parameters.

 

Impairment of other intangible assets

No further significant impairment losses or reversals of impairment losses on intangible assets were recognized in fiscal year 2025.