PERNOD RICARD - 2018-2019 Universal registration document

6.

CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

Notes to the income statement Note 3

Other operating income and expenses Note 3.1

Other operating income and expenses include impairment of expenses. These other operating income and expenses are property, plant and equipment and intangible assets, costs relating excluded from the Profit from Recurring Operations given their to restructuring and integration, capital gains or losses on unusual, abnormal and infrequent nature, which would distort the disposals, as well as other non-recurring operating income and reading of the Group’s performance.

Other operating income and expenses are broken down as follows:

30.06.2019

30.06.2018

€ million

Impairment of property, plant and equipment and intangible assets

(73)

(69) (29) (77)

Gains or losses on asset disposals and acquisition costs Net restructuring and reorganisation expenses

29

(38)

Disputes and risks

(1) 22

3

Other non-current operating income and expenses OTHEROPERATING INCOME ANDEXPENSES

(33)

(62)

(206)

At 30 June 2019, other operating income and expenses consisted mainly of: impairment of property, plant and equipment and intangible assets in — the amount of €69 million, resulting notably from brand impairment testing, mainly on the Brancott Estate brand; gains or losses on asset disposals, relating mainly to the sale of the — Graffigna brand;

restructuring costs linked to various reorganisation projects; — other non-recurring operating income and expenses, particularly — related to the increase in the Group’s defined benefit plan commitment in the United Kingdom under the Guaranteed Minimum Pension system, resulting in a €34 million expense (see Note 4.7 – Provisions ).

Financial income/(expense) Note 3.2

30.06.2019

30.06.2018

€ million

Interest expense on net financial debt Interest income on net financial debt

(357)

(329)

73

32

Net cost of debt

(284)

(297)

Structuring and placement fees

(2)

(2) (5)

Net financial impact of pensions and other long-term employee benefits

(14)

Other net current financial income (expense)

0

(10)

Financial income/(expense) fromrecurring operations

(301)

(314)

Foreign currency gains/(loss)

1

2

Other non-current financial income/(expense) TOTAL FINANCIAL INCOME/(EXPENSE)

(1)

1

(301)

(310)

Weighted average cost of debt The Group’s weighted average cost of debt was 3.9% over FY19 compared to 3.5% over FY18. Weighted average cost of debt is defined as net financing costs plus structuring and placement fees as a proportion of average net financial debt outstanding plus the average amount outstanding on factoring and securitisation programmes.

At 30 June 2019, the net cost of debt included financial expenses of €253 million on bonds, €12 million on interest rate and currency hedges, €14 million on factoring and securitisation agreements, and €18 million in other expenses.

Corporate income tax Note 3.3 Analysis of income tax expense

30.06.2019

30.06.2018

€ million

Current income tax Deferred income tax

(382)

(483)

(10)

(99)

TOTAL

(392)

(582)

170

2018-2019

PERNOD RICARD UNIVERSAL REGISTRATIONDOCUMENT