Euronext - 2020 Universal Registration Document

GLOSSARY, CONCORDANCE TABLES & ANNEX G

Net book value of goodwill

Foreign Exchange

31 December 2019

Translation 31 December 2020

In thousand of euros

Capital markets / Infor services

490,391

(841)

489,550

Post trade

452,412

452,412

Technology services

23,970

23,970

966,774

(841)

965,933

Management has based its value in use calculations for each CGU on key assumptions about short- and medium-term revenue and cost growth, long-term economic growth rates (used to determine terminal values) and pre-tax discount rates. Therefore value in use calculations are sensitive to changes in such parameters. Long-term growth rates represent management’s internal forecasts based on external estimates of GDP and inflation analysis for the 10-year period 1 st January 2015 to 31 st December 2024, and do not exceed the long-term average growth rates for the countries in which the CGUs operate. Following management assessment, as reported in the table below, the value in use of each CGU is significantly higher than the carrying value and is unlikely to be materially impaired by reasonable adverse changes to key assumptions. The excess of value in use over carrying value is determined by reference to the net book value as at 31 st December 2020. Revenue and cost sensitivities assume a 5% change in revenues or costs for each of the 5 years in the value in use calculations.

The recoverable amounts of these CGUs have been determined on the basis of the value in use calculated using a Discounted Cash Flow (DCF) model based on a three-year aggregated business plan for the years 2021-2023, further projected for two more years to 31 st December 2025. Cash flows beyond this period have been determined using the estimated long-term growth rate and the discount rates mentioned below:

Key assumptions Discount rate: 8.8% Long-term growth rate: 1.4% Effective tax rate:

28.0% -33.5%* The discount rate used has been calculated mainly on the basis of market benchmarks relating to the risk-free rate of 3.13%, the market premium of 6.2% and the equity beta of 0.87%.

Capital Markets / Information Services

Technology services

LSEGH(I) group

Post trade

€m

€m

€m

€m

Value in use (€m)

1,754.9

88.3

1,069.2

2,912.5

Carrying value Tangible assets/liabilities

43.7

3.7 0.6 0.2

5.5

52.9

Purchased intangibles

261.2

61.3 21.4

323

Deferred tax on purchased intangibles

72.7

94.3

965.9

Goodwill

489.5

24

452.4

Carrying value attributable to LSEG

867.2

28.4

540.6

1,436.2

Notional MI goodwill

64.5

-

-

64.5

10.3%

0.0%

0.0%

Carrying value (incl. MI goodwill)

931.7

28.4 28.2 60.0

540.6 519.1 550.1

1,500.7 1,406.4 1,506.1

Carrying value (incl. MI goodwill) excluding deferred tax

859

Excess/(impairment)

896.0

the shares of London Stock Exchange Group Holdings Italia S.p.A., for a value of 4.325 billion euros, plus an additional amount that reflects the generation of cash until the completion of the transaction, which is conditional, among other things, on obtaining the necessary authorizations from the competent authorities.

The outcome of the test at 31 st December 2020 was satisfactory so no impairment of the value of goodwill was carried out. In addition, to support the results of the impairment test conducted at 31 st December 2020, reference should be made to the market value transaction announced by LSEG plc on 9 th October 2020, when a contract with Euronext N.V. was signed for the sale of 100% of

* Tax rates applied depend on CGU.

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2020 UNIVERSAL REGISTRATION DOCUMENT