Investor Presentaiton
CONSOLIDATED FINANCIAL STATEMENTS | NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS | ACQUISTIONS AND CAPITAL EXPENDITURE
4.1 ACQUISITIONS AND DISPOSALS
Acquisitions
KONE completed 17 (15) acquisitions during 2022 for a total
consideration of EUR 28.1 (50.1) million. The acquired
businesses are specialized in the elevator, escalator and
automatic building door businesses and are all located in the
EMEA region. The acquisitions completed during the financial
period were not material individually or as a whole to KONE's
2022 financial statements. The sales consolidated from the
companies acquired during 2022 had only a minor impact on
KONE's sales for the financial period. Of the total
consideration, based on provisional assessments, EUR 26.2
million was allocated to maintenance contracts in other
intangible assets. Acquired maintenance contracts are
typically amortized over ten years. Note 4.3 provides more
detail on other intangible assets.
The fair values of the acquired net assets, based on a
provisional assessment, as well as the acquisition costs, are
summarized in the adjacent table. The considerations were
paid for in cash, except for certain deferred considerations,
expected to be paid later. For most of the completed
acquisitions, the acquisition cost includes a contingent
consideration, which is typically determined by the financial
performance of the acquired business after the date of the
acquisition. Changes in the fair value of the contingent
consideration after the acquisition date are recognized in the
profit or loss. However, contingent considerations are typically
realized in the amount initially recognized. KONE mostly
acquired a 100% interest in all businesses acquired in 2022,
except for one acquisition.
Disposals
In the comparison reporting period KONE sold its full
ownership in Motala Hissar AB against cash consideration.
The sale of the subsidiary did not have material impact on the
assets or liabilities of the Group. A gain of EUR 13.9 million
was recognized arising from the sale.
Non-current assets held for sale and discontinued
operations
In June 2022 KONE announced decision to divest its business
in Russia by selling it to local management. The share
purchase agreement is subject to approval by the relevant
regulatory authorities in Russia. As at December 31, 2022,
operations in Russia are classified as held for sale. The
assets and liabilities of the business have however not been
presented separately from other assets and liabilities of the
Group in the statement of financial position nor have results
related to the business been presented as a separate
component in the income statement as the impact is
immaterial. The assets and liabilities of the business have
been measured at the lower of their carrying amount or fair
value less cost to sell resulting in recognition of loss of EUR
12.5 million.
Accounting principles
Acquisitions
Businesses acquired during the period have been combined
in the consolidated financial statements from the date when
Group has obtained control of the business and divested
businesses up to the date when control has ceased. The
acquisition consideration, including deferred and contingent
consideration, as well as the identifiable assets acquired,
and liabilities assumed, are measured at the acquisition
date fair values. The acquisition related costs are
recognized as expenses for the period in which they are
incurred.
At the acquisition date, any non-controlling interest is
measured either at the acquisition date fair value or at non-
controlling interest's proportionate share in the recognized
amounts of the identifiable net assets.
Non-current assets held for sale and discontinued
operations
The Group classifies non-current assets and disposal
groups as held for sale if their carrying amounts will be
recovered principally through a sale transaction rather than
through continuing use. Non-current assets and disposal
groups classified as held for sale are measured at the lower
of their carrying amount and fair value less costs to sell
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