EURAZEO_REGISTRATION_DOCUMENT_2017
CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements
Movements in 2016 and 2017 were as follows:
Land and buildings 85,589 (22,732) 62,857 366,683 265,692
Installations and equipment
Other
Total
(In thousands of euros)
Gross carrying amount as of January 1, 2016 Accumulated depreciation and impairment Net carrying amount as of January 1, 2016
57,963 (36,572)
90,637
234,189 (98,170) 136,020 458,171 557,452 (2,469) (52,531)
(38,866)
21,391 18,652
51,772 72,837 42,756 (2,103) (16,140)
Additions
Changes in consolidation scope Assets scrapped and disposals Depreciation charge for the period
249,005
5
(371)
(15,462)
(20,929)
Foreign currency translation
557
213
(68)
701
Other movements
(4,906)
18,319
(20,470) 218,290 (89,707) 128,583
(7,058)
Gross carrying amount as of December 31, 2016 Accumulated depreciation and impairment Net carrying amount as of December 31, 2016
779,304 (103,879) 675,425
527,113
1,524,706 (434,420) 1,090,286
(240,834)
286,279
Additions
8,789
27,090 119,633
112,209
148,088 161,720
Changes in consolidation scope Assets scrapped and disposals Depreciation charge for the period
37,946
4,141
(215)
(860)
(1,036) (22,262)
(2,111)
(25,802)
(58,322)
(106,386) (10,284)
Foreign currency translation
(5,916) 31,391
(2,515) 43,917
(1,853)
Other movements
(73,793) 251,511
1,514
Gross carrying amount as of December 31, 2017 Accumulated depreciation and impairment Net carrying amount as of December 31, 2017
940,421 (218,801)
991,168
2,183,099 (900,272) 1,282,827
(575,948)
(105,523) 145,988
721,619
415,220
Impairment losses on fixed assets 6.4 Impairment tests 6.4.1 Pursuant to IAS 36, Eurazeo allocates goodwill to Cash-Generating Units (CGUs) for the purpose of conducting impairment tests. CGUs are determined for each of the consolidated sub-groups. Calculating future cash flows The value in use of each CGU is determined using the following method for calculating the recoverable amount: expected future cash flows are estimated based on the five-year • business plans prepared by the management of each Cash- Generating Unit and validated by the management team of the parent company responsible for the entity concerned. An explicit period of more than five years may be adopted where cash flows can be estimated with sufficient reliability; cash flows are determined using the discounted cash flow method • (EBITDA +/- changes in WCR – standard tax expense – capital expenditure); the terminal value is calculated based on a perpetual return; • cash flows are discounted at the Weighted Average Cost of Capital • (WACC), determined based on financial factors reflecting rates of return and segment-specific risk in the markets in which the investment tested operates.
WACC calculation methodology Eurazeo uses the following parameters to calculate the WACC: risk-free rate: average benchmark risk-free rates quoted over a • period of 2 to 5 years per country; credit spread: average rate observed over a period of 2 to 5 years; • levered beta of comparable companies: beta observed at the • WACC calculation date (as the beta is the result of a linear regression over the last two years, it reflects the mid-term sensitivity of the value of the securities of a given company compared with the general market); net debt/equity ratio for comparable companies: ratio calculated • based on market capitalizations to net debt observed quarterly over 2 years on a sliding basis: the net debt/equity ratio obtained for each comparable is → used to unlever the Company’s beta, the unlevered beta is representative of the business segment → and will be the beta used to calculate WACC (as extreme values are excluded from the average), the “gearing” used to calculate WACC is derived from the → average debt to equity ratio calculated based on quarterly ratios of comparable companies; a size-specific premium if the tested company is more modest in • size than its comparables.
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Eurazeo
2017 Registration document
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