Compagnie des Alpes // 2020 Universal Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

The acquisition of Familypark generated a goodwill on first consolidation in the amount of €41.6 million, the allocation of which was determined as follows:

DIFFERENCE ON INITIAL CONSOLIDATION Price supplement paid in the first half of 2020

41,203

436

FINAL DIFFERENCE OF FIRST-TIME CONSOLIDATION

41,639 12,945 -1,200 -2,936

Evaluation of the Familypark brand

Provisions for charges

Deferred taxes

SUB-TOTAL ALLOCATED

8,809

Residual goodwill

32,830 41,639

DIFFERENCE OF FIRST-TIME CONSOLIDATION

At 30 September 2020, net goodwill was distributed by major Group business units, as follows.

30/09/2020

30/09/2019

(in thousands of euros)

Ski areas

127,959 142,230

132,155 192,003

Leisure parks

Holdings and supports

-

7,354

TOTAL

270,189

331,512

Procedures for carrying out goodwill and asset impairment tests

(iii) the review of the Travelfactory revenue and margin is line with that of our ski areas, (iv) conservative margins have also been applied to the EBITDA rates for the standard year of the leisure parks and the Travelfactory sub-group; l the “degraded” scenario takes into account: (i) a complete lack of opening of the Ski areas during the winter season in 2020/2021, (ii) the early closure of Leisure parks during the All Saints holidays until the end of March 2021 and a decline in activity of -35% in the third quarter and -25% in the fourth quarter, (iii) the alignment of the business plan of our tour operator Travelfactory with these assumptions, (iv) the conservative margins on the EBITDA rates of the medium scenario were also taken into account; l the three scenarios take into account a return to normal during the life of the plan. Management is assuming a return to normal in the course of 2022 to regain its trajectory in 2023. As the risks are reflected in the cash flows of each business, a single discount rate has been determined for the main businesses tested. This rate, which stands at 7% (compared to 6% at 30 September 2019), was determined on the basis of the analyses of external experts updated at 30 September 2020. A WACC rate of 11% was used for the impairment tests relating to the Travelfactory sub-group, in order to take into account the level of risk of its tour operator activity. 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. These valuations are supported by additional tests (including sensitivity analyses) carried out on the basis of criteria monitored internally (investments and margins).

In the crisis environment created by Covid-19, the Group faces many uncertainties which make it extremely complicated to assess the various impacts on Group results over the short to medium terms. These impacts will depend on a number of factors, including the timing of business resumption following the 2 nd lockdown, and the preventive measures decided by the governments of the countries where the Group operates. The Covid-19 health crisis resulted in a shutdown of the Group’s activities on 14 March, which weighed on the Group’s operational performance in 2020 (see Highlights). Combined with the fall in stock market prices, these elements constitute an indication of loss of value. Insofar as the information currently known does not make it possible to estimate precisely the consequences on the projections, the values of the goodwill were assessed from: i) five-year plans estimated and revised in November 2020; ii) and supplemented by the sensitivity analyses described in the note below; iii) and after taking into account the discount rates recalculated at 30 September 2020. In this context of uncertainty, the Group has modelled three scenarios, high, medium and degraded, as follows: l the “high” scenario takes into account: (i) normal opening of the Ski areas and a decrease in revenue of around 15% due to the loss of foreign customers, (ii) a sharp drop in revenue during the Halloween period (around -40%); l the “average” scenario takes into account: (i) closure of the ski areas until the end of January 2021 and a decline in activity of around -35% compared to the previous business plan for the rest of the winter season, (ii) the early closure of Leisure parks during the All Saints holidays until the end of March 2021 and a resumption of activity in the third quarter and the fourth quarter,

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Compagnie des Alpes I 2020 Universal registration document