SOMFY - Annual financial report 2019

07 CONSOLIDATED FINANCIAL STATEMENTS

The main actuarial assumptions used are as follows:

At 31 December Discount rate France

2019

2018

0.5% 0.5% 3.3%

1.5% 1.5% 4.0%

Germany

United States

Other

1.0-5.0%

1.0-5.0%

Future salary increases France

2.0% 2.0% 3.0%

2.0-2.1%

Germany

2.0% 2.0%

United States

Other 1.5-4.0% The sensitivity of the gross retirement benefit commitment based on a variation of +0.5%/-0.5% in discount rate is -6.72%/+7.44%, respectively. Gross remuneration of Management Board and Supervisory Board members Note 10.2.2 1.0-3.0%

€ thousands

31/12/19

31/12/18

Short-term benefits

1,959

1,707

Post-employment benefits

24

24

As of 2017, short-term benefits include the payment of a premium in favour of Management Board members, introduced following the removal of the previous “Article 39” additional pension scheme. Post-employment benefits correspond to retirement benefits associated with the employment contracts of Management Board members.

SHARE-BASED PAYMENTS NOTE 10.3

Some Group employees, including senior executives, may be entitled to the allocation of free shares, subject to the achievement of certain performance conditions, and options entitling them to acquire Somfy SA shares at a price fixed in advance. The Group does not grant warrants to subscribe for shares. Effective allocation of options and free shares is subject to conditions being fulfilled. Each beneficiary must be employed by the Group at the date options are exercised or free shares vested. For some employees, the ability to exercise options may also be governed by the achievement of predetermined objectives. Options were valued using the Black & Scholes model, which calculates the fair value of the benefit granted to date and takes account of various parameters such as the share price, exercise price, expected volatility, expected dividends, risk free interest rate and the life of the option. The fair value of free shares is determined using an approach that faithfully replicates the methodology that would be used by a bank’s trading room should beneficiaries request a price from the latter to monetise their shares. During the rights vesting period, the fair value of options and free shares thus determined is split in proportion to the acquisition of rights. This expense is posted to personnel expenses and offset by an increase in equity. Upon exercise of the options, the exercise price received is recorded under cash and offset in equity. The dilutive impact of outstanding options and free shares is reflected in the calculation of diluted earnings per share. In accordance with IFRS 2, stock options are valued at market value at the date of allocation and subsequently amortised through the income statement over the vesting period for all plans granted since 7 November 2002. At 31 December 2019, no more stock option plans existed. At its meeting on 16 June 2017 the Management Board of Somfy SA decided to allocate Somfy SA shares, free of charge, to 195 beneficiaries. The vesting of these free shares is subject to beneficiaries remaining employed by the Group and to business performance conditions based on internal financial criteria. On 1 July 2019, the final acquisition related to 30,419 shares allocated to 176 beneficiaries. The shares vested were available immediately since they are not subject to a retention obligation. At its meeting of 12 November 2018, the Management Board of Somfy SA decided to allocate Somfy SA performance shares to seven beneficiaries who are employees of Somfy Protect by Myfox. The vesting of these performance shares is subject to the condition that they must remain employed by the Group. Final vesting will take place on 30 June 2021. The shares vested will be available from 1 July 2021 and will not be subject to a retention obligation.

120

SOMFY – ANNUAL FINANCIAL REPORT 2019