• 22.1 Overview
• 22.2 Allocation of goodwill to cash-generating units

For the purposes of the impairment test carried out annually in accordance with IAS 36, the Group determines the recoverable amount of a CGU on the basis of its value in use. This calculation is based on projections of free cash flow that are first discounted at a rate corresponding to the post-tax cost of capital. Pre-tax discount rates are then determined iteratively.

The cash flow projections are based on management’s adopted detailed budgets for EBIT and capital expenditure with a three-year planning horizon. The perpetual annuity is determined using a long-term growth rate of up to 3%. The growth rate used reflects expectations regarding industry growth for the CGUs, but does not exceed the estimated long-term growth rate for the countries with the highest contribution to earnings in the relevant CGUs. The cash flow forecasts are based on both historical amounts and the anticipated future general market trend. In addition, the forecasts take into account growth in the respective national business operations and in international trade, and the ongoing trend towards outsourcing logistics activities. Cost estimates for the transportation network and services also have an impact on value in use.

The pre-tax cost of capital is based on the weighted average cost of capital. The following table shows the discount rates used for the individual CGUs:

On the basis of these assumptions and the impairment tests carried out for the individual CGUs to which goodwill was allocated, it was established that the recoverable amounts of the CGUs exceeded their carrying amounts in every case. No impairment write-downs were therefore necessary.

The recoverable amount of the DHL Exel Supply Chain CGU exceeds its carrying amount by around 1%. If the discount rate were increased by 5% or the sustainable EBIT margin reduced by 5% to 3.9%, an impairment write-down of around €300 million would have to be recognised in each case.