Compagnie des Alpes // 2021 Universal Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

At 30 September 2021, net goodwill breaks down as follows, by major Group business unit.

30/09/2021

30/09/2020

(in thousands of euros)

Ski areas

135,994 87,030

127,959 142,230

Leisure parks

Holdings and supports

-

-

TOTAL

223,024

270,189

Procedures for carrying out goodwill and asset impairment tests Goodwill was tested for impairment on the basis of five-year plans (see Note 1.15.).

As such, these business plans show a gradual return to normal in 2022/2023 and a full return to pre-crisis margins in 2024. As the risks are reflected in the cash flows of each business activity, a single discount rate has been determined for the two businesses tested. This rate, which stands at 7% (unchanged from the previous financial year), was determined based on the analyses of external experts. 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 (unchanged from 30 September 2020). 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 1.5% 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 a large number of uncertainties which make it extremely difficult to assess the various impacts on Group results over the very short to medium term. Although the sites were able to reopen, our operations remain impacted by the health crisis and the application of ever-changing preventative measures imposed by the governments of countries in which the Group operates. In this uncertain context, the Group has modelled business plans based on a central scenario and sensitivities. These plans are built on realistic assumptions, consistent with what has been observed in the past, and incorporate the approaches required a gradual recovery of profitable growth in the Leisure parks and Ski areas: l cost control; l increased selectivity of investments and priority given to spending on Leisure park attractions; l footfall and EBITDA margins taking into account the estimated impacts of the health crisis according to the specificities of our business activities (weighting of foreign customers in particular).

Impairment test results The results of the impairment tests carried out at 31 March 2021 led the Group to recognise goodwill impairment on the Leisure parks for €55.2 million. At 30 September 2021, the sensitivity tests carried out did not reveal the need to recognise additional goodwill impairment. Indeed, the business plans used at 30 September include business data related to visitor behaviour observed in the fourth quarter of 2020/2021, less pessimistic than forecasts made in the absence of visibility six months earlier. Overall sensitivity of tests to the WACC and to the perpetual growth rate Sensitivity tests are conducted by varying the basic assumptions underpinning the business plan (change in sales volume) or the discount rate. It should be noted that impairment tests are carried out at the segment level in order to reflect the measurement of value creation, the monitoring of performance and the level of strategic decision-making within the Group.

Overall sensitivity of tests to the WACC and growth rate Ski areas (excluding companies accounted for under the equity method) The table below shows the difference between the company values and the capital used (€747.8 million).

Discount rate

6.5% 328.9 374.7 425.1 480.7 542.5

7.0% 233.5 271.2 312.3 357.3 406.8

7.5% 152.8 184.3 218.4 255.5 295.9

1.0%

1.25%

LT growth rate

1.5%

1.75% 2.0%

170

Compagnie des Alpes I 2021 Universal registration document