Saint-Gobain // Universal Registration Document 2021

Financial and accounting information 2021 Consolidated Financial Statements

2% barring exceptional cases). The average cost of capital remained unchanged in 2021, at 6.85%. This rate corresponds to the Group’s average cost of capital, plus a country risk premium where applicable, depending on the geographic area concerned. The rates applied in 2021 were 6.85% for Western Europe and North America, 7.85% for Eastern Europe and emerging Asia-Pacific, 8.35% for Latin America, and 9.35% for Russia and Turkey. CGU impairment tests 7.5.2 When the annual impairment test reveals that the recoverable amount of an asset is less than its carrying amount, an impairment loss is recorded. Impairment losses on goodwill can never be reversed through income. For property, plant and equipment and other intangible assets, an impairment loss recognized in prior periods may be reversed, taking into account depreciation/amortization adjustments, if there is an indication that the impairment no longer exists and that the recoverable amount of the asset concerned exceeds its carrying amount. During the impairment tests, different assumptions measuring the method’s sensitivity are systematically tested using the following inputs: 0.5-point increase in the discount rate applied to cash ■ flows; 0.5-point decrease in the annual average rate of growth ■ in cash flows projected to perpetuity; 1-point decrease in the operating income rate for ■ Industry activities and 0.5-point decrease for Distribution activities.

On the basis of the sensitivity tests carried out at December 31, 2021 ( i.e. , sensitivity to changes in the discount rate, perpetuity growth rate and profitability rate), three CGUs were identified as sensitive: the United Kingdom Distribution CGU and the two Pipe CGUs. As the outlook improved for the Southern Europe – Flat Glass and Brazil Distribution businesses, these CGUs are no longer considered sensitive. At December 31, 2021, a 0.5-point increase in the discount rate for all CGUs would have led to approximately €28 million in additional impairment of non-current assets, concerning mainly the Pipe Europe CGU. A 0.5-point decrease in the average annual cash flow growth rate projected to perpetuity for all CGUs would have resulted in additional non-current asset impairment of around €22 million, also mainly affecting the Pipe Europe CGU. The impact of a 1-point decrease in the operating income rate for all Industry CGUs would have generated additional non-current asset impairment of approximately €154 million, primarily affecting the two Pipe CGUs. A 0.5-point decrease in the rate for Distribution activities would have generated additional impairment of around €132 million for the United Kingdom Distribution CGU. Owing to the Covid-19 pandemic, the Group decided to perform an additional one-off sensitivity analysis, incorporating broader criteria, i.e. : 0.75-point increase in the discount rate applied to cash ■ flows; 1.5-point decrease in the operating income rate for ■ Industry activities and a 1-point decrease for Distribution activities.

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