Euronext - 2019 Universal Registration Document

Financial Statements

Consolidated Statement of Changes in Equity

NOTE 18 GOODWILL AND OTHER INTANGIBLE ASSETS

Intangible assets recognised on acquisition of subsidiaries

Purchased softw. Constr. in Pr.Patents & TrMrk

Internally developed software

Customer Relations

Brand Names

Goodwill

Software

Total

In thousands of euros

As at 31 December 2017 Cost

474,954

80,365

43,689

7,708

52,208

6,899

665,823

Accumulated amortisation and impairment

(53,341)

(57,235)

(37,786)

(1,137)

(1,190)

-

(150,689)

Net book amount

421,613 421,613

23,130 23,130

5,903 5,903

6,571 6,571

51,018 51,018

6,899 6,899

515,134 515,134

As at 1 January 2018 net book amount

4,497

117

(8)

108

1,496

282

6,492

Exchange differences

Additions

-

8,843

2,464

-

-

-

11,307

Impairment charge/write off

-

(65)

(1,514)

-

-

-

(1,579)

Transfers and other

-

30

(14)

-

-

-

16

Acquisitions of subsidiaries

164,848

94

-

4,900

20,600

-

190,442

Amortisation charge (Note 10)

-

(6,026)

(2,717)

(3,465)

(3,968)

-

(16,176)

As at 31 December 2018 net book amount

590,958

26,123

4,114

8,114

69,146

7,181

705,636

As at 31 December 2018 Cost

12,815

74,393

7,181

878,488

644,299

93,503

46,297

Accumulated amortisation and impairment

(53,341)

(67,380)

(42,183)

(4,701)

(5,247)

-

(172,852)

Net book amount

590,958 590,958

26,123 26,123

4,114 4,114

8,114 8,114

69,146 69,146

7,181 7,181

705,636 705,636

As at 1 January 2019 net book amount

(221)

49

28

108

(679)

118

(597)

Exchange differences

Additions

-

9,655

1,739

-

-

-

11,394

Impairment charge/write off

-

(199)

-

-

-

-

(199)

Transfers and other

-

9

84

-

-

-

93

Acquisitions of subsidiaries (Note 5)

501,319

1,344

652

38,919

223,030

-

765,264

Amortisation charge (Note 10)

-

(6,758)

(1,563)

(6,330)

(8,180)

-

(22,831)

As at 31 December 2019 net book amount

1,092,056

30,223

5,054

40,811

283,317

7,299 1,458,760

As at 31 December 2019 Cost

1,145,397

51,963

296,836

7,299 1,690,680

140,018

49,167

Accumulated amortisation and impairment

(53,341)

(109,795)

(44,113)

(11,152)

(13,519)

-

(231,920)

Net book amount

1,092,056

30,223

5,054

40,811

283,317

7,299 1,458,760

8

Goodwill impairment test Goodwill is monitored and tested for impairment at the lowest CGU Group level of the Group to which goodwill acquired in a business combination is allocated (see Note 3). Following the acquisition of Euronext FX (former FastMatch Inc.) in 2017 and the allocation of goodwill from this transaction to the “FX Trading” CGU, the Group tests goodwill at the level of two CGU (Groups): “Euronext” and “FX Trading”. Euronext CGU (Group) The recoverable value of the “Euronext” CGU Group is based on its fair value less cost of disposal, applying a discounted cash flow approach, and corroborated by observation of Company’s market capitalisation. The fair value measurement uses significant unobservable inputs and is therefore categorised as a Level 3 measurement under IFRS 13.

Cash flow projections are derived from the 2020 budget and the business plan for 2021. Key assumptions used by management include third party revenue growth, which factors future volumes of European equity markets, the Group’s market share, average fee per transaction, and the expected impact of new product initiatives. These assumptions are based on past experience, market research and management expectation of market developments. For the impairment test performed as of 31 December 2019, revenues have been extrapolated using a perpetual growth rate of 1% (2018: 2.0%) after 2020. The weighted average cost of capital applied was 7.3% (2018: 8.6%). The annual impairment testing of the “Euronext” CGU Group performed at each year-end did not result in any instance where the carrying value of the operating segment exceeded its recoverable amount. Recoverable amount is sensitive to key assumptions. As of 31 December 2019, a reduction to 0% per year of third party

213

2019 UNIVERSAL REGISTRATION DOCUMENT