DERICHEBOURG - Universal registration document 2018-2019

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Financial statements Consolidated financial statements for the year ended September 30, 2019, in compliance with IFRS Notes

The valuation method used to determine the recoverable amount of these cash-generating units is the value in use. The data and the assumptions used for the impairment tests of the assets included in the cash generating units (CGUs) are as follows:

Discount rate 2018/2019 (1)

Growth rate to infinity 2018/2019

Discount rate 2017/2018 (1)

Growth rate to infinity 2017/2018

Valuation method

In millions of euros

Discounted cash flow and terminal value Discounted cash flow and terminal value

CGU – Environmental Services

9.00%

1.00%

9.50%

1.00%

CGU – Business Services

8.00%

1.00%

8.50%

1.00%

The discount rate used is the weighted average cost of capital (WACC). (1)

The value in use of the cash generating units (CGUs) determined by business segment is calculated by discounting the forecast operating cash flows at the rates mentioned above. These cash flows are after tax (operating profit + amortization and depreciation – tax – change in working capital requirement – operating investments) and are based on a five-year business plan. These impairment tests are conducted annually at September 30. The key assumptions to which the impairment tests of Environmental Services and Business Services are sensitive are the following: the discount rate, calculated by breaking down the Weighted p Average Cost of Capital: this rate is 9% for Environmental Services and 8% for Business Services; Ebitda for the final year of the explicit forecast. This Ebitda has been p determined on the basis of business plans;

impact on enterprise value the long-term growth rate of the p businesses. This was estimated at 1% for all businesses. This was calculated based on the following factors: Environmental Services: demand for recycling in developed countries ● and growth in demand in emerging countries, Business Services: increased outsourcing and use of temporary ● workers. The business plan for Business Services anticipates 2% growth in revenue per year, driven by the Group’s cleaning services. Modest growth in the ratio of Ebitda to revenue is also anticipated over the period, reaching 4.2% during the final year. This growth will stem primarily from projected business developments, without any major modifications to the division’s structure. The Ebitda margin during the final year is close to that of other major players in the industry. The enterprise values thus determined for the CGUs of the two segments are higher than their book value.

Impact on enterprise value

Environmental Services

Business Services

Ebitda +/-5% (in absolute terms) for the final year

Ebitda +/-5% (in absolute terms) for the final year

Discount rate +0.5%

Discount rate -0.5%

Discount rate +0.5%

Discount rate -0.5%

In millions of euros

Impact on enterprise value

(58)

65

+/-5.2%

(22)

26

+/-4,4%

Environmental Services Business Services Growth rate +0.5% Growth rate -0.5% Growth rate +0.5% Growth rate -0.5%

In millions of euros

Impact on enterprise value

(41)

46

(17)

19

These stress tests did not result in the recognition of any impairment losses on goodwill.

DERICHEBOURG p 2018/2019 Universal Registration Document 138