Compagnies des Alpes // 2019 Universal Registration Document

5 FINANCIAL INFORMATION

Consolidated financial statements

Procedures for carrying out goodwill and asset impairment tests Goodwill was tested for impairment losses (see Note 1.15). As the risks are re fl ected in the cash fl ows of each business, a single discount rate has been determined for the businesses tested. The rate of 6.0% was obtained using the analyses made by external experts. In light of the challenging economic climate and the uncertainties in Europe’s outlook, the Group intensi fi ed its strategic brain-storming regarding its main sites. The 2020-2024 business plans, used as a basis for impairment testing, whilst still based on realistic assumptions already made in the past, contain the guidelines needed for continued pro fi table growth in the Leisure parks segment and the maintenance of margins in the Ski areas segment: l cost control; l more selective investment and priority given to spending on increasing appeal in the Leisure parks segment.

Beyond the fi ve-year period of the plan, the terminal value is calculated on the basis of cash fl ows to perpetuity using an average growth rate of between 1% and 2% (this being adjusted on the basis of the speci fi c outlook for each entity and its positioning). This growth rate is considered reasonable for the leisure sector in the medium and long term. Impairment test results The tests carried out on the Ski areas and Leisure parks operating segments indicated the absence of impairment to be recognised for the last fi ve years. 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 now carried out at the segment level in order to re fl ect 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 to the perpetual growth rate:

Overall sensitivity of tests to the WACC and to the growth rate Ski areas (excluding companies accounted for under the equity method) The table below shows the positive di ff erence between the values in use and the values tested (consolidated cost price of €527 million).

Discount rate

5.5% 611.0 762.6 960.5

6.0% 472.7 590.7 739.8

6.5% 360.7 454.8 570.8

1.2% 1.7% 2.2%

LT growth rate

Leisure parks The table below shows the positive di ff erence between the values in use and the values tested (consolidated cost price of €522 million).

Discount rate

5.5% 514.2 665.6 867.4

6.0% 380.9 496.6 645.5

6.5% 274.5 365.6 479.4

1.5% 2.0% 2.5%

LT growth rate

For the Group as a whole, the sensitivity analyses presented indicate that the recoverable amount for the two operating segments and the “Holdings and supports” segment is higher than the Group’s equity. These valuations are supported by additional tests (including sensitivity analyses) carried out on the basis of criteria monitored internally (investments and margins).

Regarding the last segment, Holdings and supports, it includes companies with di ff erent businesses that are tested individually or by sub-group including companies with similar businesses (tour operator and consulting businesses).

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Compagnie des Alpes I 2019 Universal registration document