LEGRAND_REGISTRATION_DOCUMENT_2017

08 CONSOLIDATED FINANCIAL INFORMATION CONCERNING

THE GROUP’S ASSETS, LIABILITIES, FINANCIAL POSITION AND RESULTS Consolidated financial statements in accordance with IFRS for the years ended December 31, 2017 and December 31, 2016

The following impairment testing parameters were used in the period ended December 31, 2017:

Value in use

Discount rate (before tax)

Growth rate to perpetuity

Recoverable amount

Carrying amount of goodwill

(in € millions)

France

688.0

8.4%

2.0%

Italy

381.5

9.1%

2.0%

Rest of Europe

327.2

7.8 to 19.7%

2.0 to 5.0%

Value in use

North and Central America

1,911.6

10.3%

3.2%

Rest of the world

622.0

9.1 to 15.7%

2.0 to 5.0%

NET VALUE AT THE END OF THE PERIOD

3,930.3

No goodwill impairment losses were identified in the period ended December 31, 2017 including for CGUs facing a difficult or uncertain macro-economic environment.

Sensitivity tests performed on the discount rates, long-term growth rates and operating margin rates showed that a 50 basis point unfavorable change in each of these three parameters would not lead to any material impairment of goodwill on an individual basis for each CGU.

The following impairment testing parameters were used in the period ended December 31, 2016:

Value in use

Discount rate (before tax)

Growth rate to perpetuity

Recoverable amount

Carrying amount of goodwill

(in € millions)

France

685.8

8.2%

2.0%

Italy

381.5

8.8%

2.0%

Rest of Europe

341.4

7.1 to 17.1%

2.0 to 5.0%

Value in use

North and Central America

1,038.9

9.4%

3.2%

Rest of the world

674.3

8.5 to 19.1%

2.0 to 5.0%

NET VALUE AT THE END OF THE PERIOD

3,121.9

No goodwill impairment losses were identified in the period ended December 31, 2016.

3.3 PROPERTY, PLANT AND EQUIPMENT Depreciation is calculated on a straight-line basis over the estimated useful lives of the respective assets; the most commonly adopted useful lives are the following:

Lightweight buildings

25 years

Standard buildings

40 years

Machinery and equipment

8 to 10 years

Tooling

5 years

Office furniture and equipment

5 to 10 years

Assets acquired under lease agreements that transfer substantially most of the risks and rewards of ownership to the Group are capitalized on the basis of the present value of future minimum lease payments and are depreciated over the shorter of the lease contract period and the asset’s useful life determined in accordance with Group policies.

246

REGISTRATION DOCUMENT 2017 - LEGRAND