Eurazeo / 2018 Registration document

CONSOLIDATED FINANCIAL STATEMENTS Notes to the Consolidated Financial Statements

GENERAL PRINCIPLES NOTE 1

The consolidated financial statements were authorized for publication by Eurazeo’s Executive Board on March 4, 2019. They were reviewed by the Audit Committee on March 6, 2019 and by the Supervisory Board on March 7, 2019. The consolidated financial statements include the financial statements of Eurazeo and its subsidiaries and associates, for the year to December 31. In the case of subsidiaries or associates with fiscal years ending on a date other than December 31, the consolidated financial statements use accounts covering the period from January 1 to December 31. The financial statements of all subsidiaries and associates accordingly cover the same period as those of the parent company and are prepared in accordance with IFRS. Adjustments are made to bring into line any differences in accounting policies that may exist. 1.1 When preparing its consolidated financial statements, Eurazeo must make estimates and assumptions that affect the carrying amount of certain assets, liabilities, revenue and expenses and can have an impact on the information contained in the Notes to the financial statements. Eurazeo regularly reviews these estimates and judgments, taking into consideration past experience and other factors deemed relevant in light of economic conditions. Depending on changes in those assumptions or if conditions vary from those anticipated, amounts in future financial statements could differ from the current estimates. The estimates and assumptions adopted for the preparation of the financial statements for the year ended December 31, 2018 concern: the fair value of identifiable assets and liabilities and contingent • liabilities for the purpose of allocating the goodwill (see Notes 1.2 and 6); the recoverable amount of goodwill and intangible assets with an • indefinite life (see Note 6); the fair value of investment properties (see Note 7); • the recoverable amount of investments in associates (see Note 8.1); • the fair value of financial assets (see Note 8.2). • Presentation of restated comparative 1.2 financial statements The comparative financial statements (balance sheet, income statement and statement of cash flows) for the year ended December 31, 2017 have been restated for the following: the allocation of WorldStrides group goodwill (purchased on • December 15, 2017); adjustments resulting from the transfer of certain Asian business • lines of the Seqens group to discontinued operations (IFRS 5) (see Note 2.2); deconsolidation of investment funds managed for third parties. • Allocation of WorldStrides group goodwill The WorldStrides group was acquired on December 15, 2017 and the goodwill allocation was performed during the first-half of 2018. The Critical estimates and judgment

comparative financial statements for the year ended December 31, 2017 were therefore restated accordingly. The main impacts on the balance sheet are as follows: recognition of trademarks for a net amount of €129.1 million; • recognition of customer relationships for €297.5 million; • recognition of deferred tax liabilities on intangible assets of • €100.1 million. The main impacts on the income statement are as follows: amortization of intangible assets of €5.9 million; • deferred tax income relating to the amortization of intangible • assets of €1.1 million; impact of changes in U.S. tax rates on deferred tax recognized on • the allocation of goodwill of €48.4 million. Deconsolidation of investment funds managed for third parties Historically a direct investor, Eurazeo performed its first fundraising in 2006 to syndicate a minority stake (of around 15%) in its investments. Recent fundraising (Eurazeo Capital II renamed Eurazeo Capital III, Eurazeo PME III) and acquisitions and strategic alliances with pure investment funds (Idinvest, Rhône Capital), marked a change in the Group’s business model and third-party asset management is now a key activity. With this change in investment strategy, the control exercised by Eurazeo over the companies constituting the funds was reassessed, leading to the deconsolidation of the investment funds managed for third-parties. The accounting treatment of the various third-party management funds for which the Group acts was also therefore harmonized. Eurazeo generally continues to control the underlying investments, as the investments were performed in part “directly” (via the LH, i.e. entities controlled by Eurazeo), and in part by “Investment holding companies” (i.e. the funds majority owned by investment partners over which Eurazeo considers it no longer exercises control, for example Eurazeo Capital II). In other words, and contrary to more “usual” cases, the deconsolidation of the “Investment holding companies” requires Eurazeo to reclassify the majority of the debt (which corresponded to the rights of investment partners in the funds) in minority interests (which now correspond to the funds’ interest in the underlying assets). The funds effectively comprise instruments providing a residual interest in the assets of investments after the deduction of all their liabilities. These are therefore equity instruments as they do not include a contractual obligation to remit cash or another financial asset or to exchange assets and liabilities at conditions potentially unfavorable to the issuer. The main impacts of the retrospective application of this deconsolidation are as follows: removal in the balance sheet of the line “Interests in respect of • investments in investment funds”, as Eurazeo has no liquidity obligation to the funds and the investment partners; recognition of minority interests; • recognition in the income statement of fees invoiced to the funds • (revenue) and other inter-company transactions (particularly financial income), previously eliminated; cancellation of the share of income of funds in associates. •

4

Eurazeo

217

2018 Registration Document