23 Business combinations
General
Business combinations are accounted for using the acquisition method. Acquisition costs comprise the consideration paid, including the fair value of deferred and contingent consideration. Transaction costs are recognized as operating expenses. Businesses acquired in the reporting year are included in the Group’s consolidated financial statements from the date on which the Group obtained control of the business.
Net assets acquired comprise identifiable assets, liabilities, and contingent liabilities, and are recognized at fair value. Identifiable intangible assets mainly consist of maintenance portfolios. The difference between the acquisition costs and the fair value of the net assets acquired is recognized as goodwill. Goodwill is allocated to those cash-generating units that are expected to benefit from the acquisition and to generate future cash flows. Non-controlling interests are generally recognized according to their proportionate share of the fair value of the net assets acquired.
It is common practice for the Group to acquire call options on interests that have not yet been acquired and to write put options.
Step acquisitions
If the Group obtains control of an associate, the previously held interests are measured at fair value at the acquisition date. Any gain or loss resulting from the remeasurement is recognized in other operating income. Items previously recognized in OCI are reclassified to the income statement.
In the reporting year and in the previous year, Schindler acquired the business operations or shares of various smaller companies active in the elevator and escalator industry. Individually, the impact of the business combinations completed in the reporting year is not material, nor would it have been material if the business combinations had occurred on January 1, 2025, or January 1, 2024, respectively. The business combinations enable the Group to strengthen its market position and expand its regional coverage.
The fair values of the net assets acquired through all business combinations are as follows:
| In CHF million | 2025 | 2024 | ||
|---|---|---|---|---|
| Assets | ||||
| Cash and cash equivalent | 3 | 6 | ||
| Accounts receivable | 2 | 8 | ||
| Other current assets | 11 | 6 | ||
| Property, plant, and equipment | 1 | 1 | ||
| Maintenance portfolio | 57 | 47 | ||
| Deferred tax assets | 1 | 1 | ||
| Liabilities | ||||
| Accounts payable | 3 | 4 | ||
| Contract liabilities | 8 | 5 | ||
| Deferred tax liabilities | 16 | 11 | ||
| Other non-current liabilities | 1 | 2 | ||
| Net assets acquired | 43 | 44 | ||
| Goodwill | 54 | 33 | ||
| Total acquisition costs | 97 | 77 |
Gross accounts receivable total CHF 2 million and the related bad debt allowances are insignificant (previous year: gross amount of CHF 10 million and allowances of CHF 2 million).
The Group assumes that the goodwill acquired in the reporting year and the previous year is not eligible for tax deductions.
Cash flows
A reconciliation of the net cash outflow for all business combinations is provided in the following table:
| In CHF million | 2025 | 2024 | ||
|---|---|---|---|---|
| Cash and cash equivalents paid | 88 | 57 | ||
| Deferred purchase consideration | 9 | 20 | ||
| Total acquisition costs | 97 | 77 | ||
| Cash and cash equivalents acquired | –3 | –6 | ||
| Deferred purchase consideration | –9 | –20 | ||
| Paid deferred purchase consideration | 20 | 20 | ||
| Net cash outflow | 105 | 71 |