SOMFY - Annual financial report 2018

07 CONSOLIDATED FINANCIAL STATEMENTS

ROCE Note 4.3.3

ROCE corresponds to the return on capital invested (or employed) after tax, equating to the ratio, expressed as a percentage, between Current Operating Result after tax applied at a normative rate and capital invested (or employed). Capital invested corresponds to the sum of shareholders’ equity (with the effects of goodwill impairment being neutralised) and net financial debt.

Notes

31/12/18

31/12/17 Restated for operations treated in accordance with IFRS 5

31/12/17 Published

€ thousands

Current operating result Restated effective tax rate

177,845 17.81% 146,177 894,394 44,441 938,834 -222,389 716,445

174,704 17.64% 143,886 813,669 35,097 848,766 -163,294 685,471

168,403 17.91% 138,242 770,665 35,097 805,762 -104,640 701,121

(11.1)

Current operating result after tax effect

Shareholders’ equity

Neutralisation of goodwill impairment

(5.1.2)

Restated shareholders’ equity

Net financial debt

(7.2.3)

Capital invested (capital employed) ROCE (RETURN ON CAPITAL EMPLOYED)

20.4%

21.0%

19.7%

Net financial debt Note 4.3.4

The net financial debt corresponds to the difference between financial assets and financial liabilities. Notably it takes into account unlisted bonds receivable, issued by certain companies in which shares are held or related entities, earnout on acquisitions, liabilities relating to options granted to minority shareholders in fully-consolidated companies and deferred settlements of a financial nature. Not included are securities in non-controlling equity investments, deposits & guarantees and government grants.

Details of the calculation of the net financial debt are provided in note 7.2.3.

INVENTORIES NOTE 4.4

Inventories are valued at their procurement cost, determined using the weighted average unit cost method. In particular, inventory cost measurement takes into account the following items: the gross value of raw materials and supplies includes the purchase price and ancillary expenses; – expenses incurred to bring inventories to the place they are located, and in the condition they are in, are integrated in inventory – procurement cost; manufactured products are measured at production cost, which includes consumables, direct and indirect production expenses and – depreciation charges of assets used in the manufacturing process; intragroup profits included in inventories are eliminated; – borrowing costs are not included in the cost of inventory. – The value of inventories and work in progress is impaired when their net realisable value is lower than their book value. Net realisable value is the estimated selling price under normal business conditions, after deducting estimated completion costs and estimated selling expenses.

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SOMFY – ANNUAL FINANCIAL REPORT 2018