Goodwill and other intangible assets

12 Months Ended

Dec. 31, 2023

Disclosure of detailed information about intangible assets [abstract]

Changes in goodwill and other intangible assets for the Company periods are as follows:


Amounts in thousands USD	Goodwill		Customer relation		Technology		Brand and Licenses		Development Cost		Total
Cost
As of January 01, 2022	$	168,431	$	41,272	$	89,644	$	26,266	$	11,342	$	336,955
Additions	—		—		—		77		1,300		1,377
Translation differences	(22,486)		(5,510)		(11,968)		(3,506)		(1,573)		(45,043)
As of December 31, 2022	$	145,945	$	35,762	$	77,676	$	22,837	$	11,069	$	293,289
Additions	—		—		—		—		2,268		2,268
Reclassifications	—		—		—		—		349		349
Translation differences	5,748		1,409		3,059		899		568		11,683
As of December 31, 2023	$	151,693	$	37,171	$	80,735	$	23,736	$	14,254	$	307,589
Amortization and impairment
As of January 01, 2022	$	—	$	11,518	$	16,876	$	55	$	382	$	28,831
Amortization	—		3,704		5,363		88		2,056		11,211
Translation differences	—		(1,665)		(2,438)		(9)		(121)		(4,233)
As of December 31, 2022	$	—	$	13,557	$	19,801	$	134	$	2,317	$	35,809
Amortization	—		3,522		5,098		157		2,252		11,029
Reclassifications	—		—		—		—		46		46
Translation differences	—		729		1,062		14		219		2,024
As of December 31, 2023	$	—	$	17,808	$	25,961	$	305	$	4,834	$	48,908
Net Book Value
As of December 31, 2023	$	151,693	$	19,363	$	54,774	$	23,431	$	9,420	$	258,681
As of December 31, 2022	$	145,945	$	22,205	$	57,875	$	22,703	$	8,752	$	257,480

Test of goodwill and indefinite lived assets impairment

For impairment testing, goodwill acquired through business combinations and brands with indefinite useful lives are allocated to the Kit and Services CGUs, which are reportable segments.


	Amounts in thousands USD
As of December 31, 2023	Kit		Services		Total
Goodwill	$	121,006	$	30,687	$	151,693
Brands	13,840		9,139		22,979


As of December 31, 2022	Kit		Services		Total
Goodwill	$	116,274	$	29,671	$	145,945
Brands	13,291		8,817		22,108

The recoverable amounts of the CGUs’ value-in-use calculation is based on cash flow projections from financial budgets approved by senior management covering a ten-year period. The forecast period exceeds 5 years since the market for Olink's products is a relatively new market and we expect strong growth over the next 10 years.

The discount rates used in 2023 and 2022 are based on the Company’s WACC of 14% and 17% respectively, as both CGUs have integrated operations across the business. The discount rate is adjusted where appropriate for specific segment, country and currency risks. The valuation methodology uses significant inputs which are not based on observable market data; therefore, this valuation technique is classified as level 3 in the fair value hierarchy.

Details relating to the discounted cash flow models used in the impairment tests of the Kit and Services CGUs are as follows:


Valuation basis	Value in use
Key assumptions	•Sales growth rates •Profit margins •Terminal growth rate •Discount rate
Determination of assumptions	•Sales growth rates are internal forecasts based on both internal and external market information •Profit margins are internal forecasts based on both internal and external market information •Terminal growth rates based on management’s estimate of future long-term average growth rates •Discount rates based on the Company’s WACC, adjusted where appropriate.
Period of specific projected cash flows	10 years
Terminal growth rate and discount rate	Terminal growth rate		Discount rate 2023/2022
	Kit and Services CGUs	2% per annum	14%/ 17%

The Company performed its annual goodwill impairment test for each of its reporting units during the fourth quarter in 2023 and 2022 using a discounted cash flow analysis, concluded that the recoverable amounts of all of its reporting units were in excess of their carrying values. No impairment of goodwill was required.

The discounted cash flow analysis includes management’s current assumptions as to future cash flows and long-term growth rates. A sensitivity analysis including all key assumptions is performed and management believe that no reasonably possible change in any of the above key assumptions would cause the carrying value to materially exceed the recoverable value. For all cash generating units there is sufficient headroom before any changes in key assumptions would cause a valuation adjustment. The performed sensitivity analysis demonstrates that the value of goodwill and other intangible assets with indefinite useful life is more than defensible even if the discount rate is increased with one and a half percentage points and if the growth rate after the forecast period is decreased with two percentage points for all cash generating units. Even forecasts for sales growth and profit margins are included in the sensitivity analysis and no reasonable changes in these would cause a need of impairment.