Assystem - 2015 Registration Document

6

FINANCIAL STATEMENTS

CONSOLIDATED FINANCIAL STATEMENTS

The allocation of the carrying amount of goodwill by cash-generating unit (CGU) is shown below:

31/12/2014

31/12/2015

Impairment losses recognised during the year

Effect of changes in scope of consolidation

Accumulated impairment losses at year-end

Currency translation differences

Carrying amount

Carrying amount

In millions of euros

Global Product Services Energy & Infrastructure

89.9 14.5 20.1

4.2

– –

0.4 3.1

94.5 39.6 13.1

13.5

22.0

5.5 7.0

Staffing TOTAL

–

(7.0) (7.0)

–

124.5

26.2

3.5

147.2

26.0

five-year period are estimated by extrapolating the projections using a perpetuity growth rate (see below). This growth rate must not exceed the medium- to long-term average growth rate for the industry as a whole. Future cash flows are discounted based on the weighted average cost of capital (WACC) of each business segment. The cash flows used were based on budget forecasts established by the operating management teams of each CGU when drawing up their medium and long-term strategy. The Group applied a normative cost of debt weighted for the Group as a whole and a cost of equity specific to each country in order to determine the WACC (see table below).

The impairment losses recognised in 2015 concern the “Staffing” CGU. Although measures have been put in place to diversify this CGU’s operations, both in terms of geographic coverage and business sectors, in view of its outlook the Group recorded a €7 million impairment loss against the CGU’s assets during the year, which was recognised in “Non-recurring income and expenses”. The recoverable amount of the CGUs was calculated based on their value in use. In order to determine value in use, the Group projects the future cash flows that it expects to derive from each CGU. These projections are based on five-year budgets and cash flows beyond this

The table below presents the main factors used for modelling the assumptions used for the impairment tests:

2015

Perpetuity growth rate used for extrapolating future cash flows beyond the projection period

Discount rate

CGU

Global Product Services Energy & Infrastructure

1.50% 1.50% 1.00%

8.0% 8.2%

Staffing

10.2%

The Staffing CGU was identified as having a recoverable amount lower than its carrying amount in 2015, which led to the recognition of a €7 million impairment loss. Sensitivity analyses were performed to measure the impact of changes in the main assumptions used for calculating the impairment loss. The table below shows the difference between the recoverable amount and carrying amount of the Staffing CGU, with brackets indicating where the scenario concerned would lead to an impairment loss and the figure presented corresponding to the amount of the impairment loss (in millions of euros).

If any impairment is identified based on the calculation of discounted future cash flows and/or market values of the assets concerned, or if there is a change in market conditions or in the cash flows that were originally estimated, then previously recognised impairment losses may need to be revised or modified. A 1% (100 basis points) increase in the WACC rates used for the impairment tests carried out on the Global Product Services and Energy & Infrastructure CGUs would not result in the recognition of an impairment loss for these CGUs.

Sensitivity to changes in WACC and perpetuity growth rates

Sensitivity to changes in EBITDA, WACC and perpetuity growth rates

WACC (%) Normative EBITDA rate (%) (1.0)% (0.5)% 0.0% 0.5% 1.0% (1.0)% (0.5)% 0.0% 0.5% 1.0%

In millions of euros

0.5% (4.8) 1.0% (3.7) 1.5% (2.4)

(6.4) (5.4) (4.3)

(7.8) (7)* (5.9)

(9.0) (8.3) (7.4)

(10.2)

(9.7) (8.8) (7.9)

(8.6) (7.8) (6.8)

(7.8) (7)* (5.9)

(7.1) (6.2) (5.3)

(6.6) (5.7)

Perpetuity growth rate (%)

(9.5) (8.7)

(4.8) (1.0)% (0.5)% 0.0% 0.5% 1.0% WACC (%)

* Actual scenario, based on Management’s best estimate, used for measuring goodwill impairment .

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ASSYSTEM

FINANCIAL REPORT 2015