LOREAL_Registration_Document_2017

4 2017 Consolidated Financial Statements* NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Impairment tests of Cash Generating Units for which the carrying amount of goodwill and intangible assets with indefinite useful lives is significant, are carried out based on the following data and assumptions:

Discount rate (%) International excluding USA

Net carrying amount of goodwill and brands with an indefinite useful life

USA

€ millions

2017 Test Maybelline/Garnier

1,186.0

6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 9.3 6.8 6.8 6.8 7.1 6.8 6.8 6.8 6.8 6.8 6.8 6.8 6.8 9.1 6.8 6.8 6.9 7.3 6.9 6.9 6.9 6.9 9.5 6.9 6.9 6.9 6.9

7.7 7.7 7.7 7.7 7.7 7.7 7.7 7.7 (1)

L'Oréal Paris

852.4 795.1 689.8 607.4 519.8 470.2 405.2 380.3 338.1 315.1 161.9 896.4 870.5 800.3 766.2 662.5 519.8 464.1 451.5 397.9 360.2 324.3 176.4 803.0 795.0 748.2 640.0 594.3 519.8 411.7 388.4 321.7

Lancôme

Matrix

Redken/PureOlogy

YSL Beauté

Perfumes/Helena Rubinstein/Atelier Cologne

NYX Professional Makeup

L'Oréal Professionnel/Kérastase

Magic

Vichy/Dermablend L'Oréal Beauty Device 2016 Test Maybelline/Garnier

(1)

7.7

1,291.7

7.8

The Body Shop L'Oréal Paris

(1)

7.8 7.8 7.8 7.8 7.8 7.8 7.8 (1)

Lancôme

Matrix

Redken/PureOlogy

YSL Beauté

Perfumes/Helena Rubinstein/Atelier Cologne

NYX Professional Makeup

L'Oréal Professionnel/Kérastase

Magic

Vichy/Dermablend L'Oréal Beauty Device 2015 Test Maybelline/Garnier

(1)

7.8

1,215.1 1,014.7

8.1

The Body Shop

(1)

Lancôme

8.1 8.1 8.1 8.1

L'Oréal Paris

Matrix

Redken/PureOlogy

Magic

YSL Beauté

(1)

L'Oréal Beauty Device

8.1 8.1

L'Oréal Professionnel/Kérastase

Vichy/Dermablend

(1)

Since the USD amounts for the YSL Beauté, The Body Shop and the Vichy/Dermablend CGUs are not material, no specific discount rate has been used in this respect. (1)

Impairment tests carried out on the two CGUs (L’Oréal Beauty Device and Magic) at 31 December 2017 did not lead to any change in the impairment losses recognised at 31 December 2017. At 31 December 2017, a 1% increase in the discount rate on all Cash Generating Units of the Group would lead to an impairment loss risk of around €61.9 million. The terminal growth rate is consistent in accordance with market data, i.e. 2.5% for Europe and 3% for the rest of the world.

A 1% decrease in the terminal growth rate on all Cash Generating Units of the Group would lead to an impairment loss risk of around €19.6 million. A 1-point decrease in the margin rate over the business plan period on all Cash Generating Units of the Group would lead to an impairment loss risk of around €31.2 million.

REGISTRATION DOCUMENT / L'ORÉAL 2017

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