Saint-Gobain // Universal Registration Document 2021

8

Financial and accounting information 2021 Consolidated Financial Statements

The following table presents the results of the sensitivity analysis for the various CGUs at December 31, 2021:

Impact of changes in the

discount rate

growth rate

operating income rate

1.0-point decrease Distribution CGUs

1.5-point decrease Industry CGUs

0.5-point decrease Distribution CGUs

1-point decrease Industry CGUs

0.5-point increase

0.75-point increase

0.5-point decrease

(in EUR millions)

High Performance Solutions Northern Europe Southern Europe – ME & Africa

(16)

(132)

(315)

(27)

(40)

(22)

(143)

(217)

Americas

(1)

(3)

(11)

(18)

Asia-Pacific TOTAL

(28)

(59)

(22)

(154)

(132)

(235)

(315)

The breakdown of asset impairment by region for 2021 and 2020 is provided in the segment information tables in note 5 “Information concerning the Group’s operating activities”. In 2021, the Group reviewed its impairment tests in light of the current situation and the outlook for certain businesses and countries. The sale of the plumbing, heating and sanitaryware operations of the United Kingdom Distribution CGU was part of Saint-Gobain’s continuing portfolio optimization strategy to improve its growth and profitability profile in line with the objectives of the “Grow & Impact” plan. Although turnaround plans have been put in place and are ongoing, we continue to adopt a cautious outlook for this CGU, which is sensitive to a change in the profitability rate. In 2021, the Pipe Europe CGU saw strong inflation in raw materials needed to manufacture cast iron (iron ore, scrap metal, coke). The outlook for 2022 is better, thanks in particular to the favorable impact of sales price increases generated in the last four months of 2021. The CGU remains sensitive to a change in the discount rate, perpetuity growth rate and profitability rate. The planned privatization of water distribution companies in Brazil has confirmed the prospects of recovery and medium-term profitability for the Latin America Pipe CGU. The CGU remains sensitive to a change in the discount or profitability rate.

2021 confirmed the prospects of recovery and profitability for the Brazil Distribution CGU. At the end of 2021, the CGU is no longer sensitive to any of the changes in the discount rate, perpetuity growth rate or profitability rate tested. The assumptions used in the asset impairment tests take into account the actions envisaged in connection with the Group’s commitment to reduce by 2030 its scope 1 and 2 net carbon emissions by 33% compared to 2017 in order to limit its impact on the environment and contribute to the decarbonization of its markets, in particular an annual amount of €100 million in capital expenditure and research and development expenditure set aside to further its environmental strategy to reduce CO 2 emissions. In addition, although the current legal environment in the various countries in which the Group operates does not tax, outside the European Union, tonnes of CO 2 emitted in excess of any allowances allocated, and in line with its emissions reduction strategy, the Group has carried out sensitivity tests on the value of its CGUs, assuming a carbon price of €75 and €95 per tonne as of 2022, as well as the maintenance or development of government support mechanisms such as the allocation of CO 2 emissions allowances. If these assumptions were to prove accurate, no significant additional impairment would need to be recognized against fixed assets.

SAINT-GOBAIN UNIVERSAL REGISTRATION DOCUMENT 2021 312

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