Compagnie des Alpes - 2017 Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

Note 6

Information on the consolidated balance sheet

6.1 GOODWILL Net goodwill breaks down as follows:

Gross amount

Impairment

Net amount

(in thousands of euros)

At 30/09/2015

296,635

-13,063

283,572

Changes in the scope of consolidation

- -

- -

- -

Other changes At 30/09/2016

296,635

-13,063

283,572

Changes in the scope of consolidation

-617

- -

-617

Other changes At 30/09/2017

-

-

296,018

-13,063

282,955

At 30 September 2017, net goodwill was distributed by major Group business unit, as follows:

30/09/2017

30/09/2016

(in thousands of euros)

Ski areas

132,155 150,800

132,155 151,417

Leisure parks

Group Development

-

-

TOTAL

282,955

283,572

Procedures for carrying out goodwill and asset impairment tests Goodwill was tested for impairment losses (see Note 1.15). As the risks are reflected in the cash flows of each business, a single discount rate has been determined for the businesses tested. The rate of 6.0% was obtained using the analyses made by external experts. In light of the challenging economic climate and the uncertainties in Europe’s outlook, the Group intensified its strategic brain-storming regarding its main sites. The 2018-2022 business plans, used as a basis for impairment testing, whilst still based on realistic assumptions already made in the past, contain the adjustments needed for continued profitable growth in the Leisure destinations segment and the maintenance of margins in the Ski areas segment: z cost reductions; z more selective investment and priority to spending on increasing appeal in the Leisure destinations segment. Beyond the five-year period of the plan, the terminal value is calculated on the basis of cash flows to perpetuity using an average growth rate of between 1% and 2% (this being adjusted on the basis of the specific outlook for each entity and its positioning). This growth rate

is considered reasonable for the leisure sector in the medium and long term. Impairment test results The tests carried out on the Ski areas and Leisure destinations operating segments indicated the absence of impairment to be recognised for the last four years. The Group Development segment includes recently opened companies or companies in the startup phase: the valuations include the action plans implemented and their expected outcome in the medium and long term (five-year plans). These plans are complemented with ten-year plans at the site level increasing the value of the assets maintained in the balance sheet. perpetuity Sensitivity tests are conducted by varying the basic assumptions underpinning the business plan (change in sales volume) or the discount rate. It should be noted that impairment tests are now carried out at the segment level in order to reflect the measurement of value creation, the monitoring of performance and the level of strategic decision- making within the Group.

Overall sensitivity of tests to the WACC and to the growth rate Ski areas (excluding companies accounted for under the equity method) The table below shows the positive difference between the values in use and the values tested (consolidated cost price of €500 million).

Discount rate

5.5% 625.1 772.2 964.0

6.0% 491.4 605.8

6.5% 383.0

1.2%

LT growth rate

1.7%

474.3

2.2%

750.4

586.8

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Compagnie des Alpes I 2017 Registration Document