SOMFY // 2022 Annual Report

05 CONSOLIDATED FINANCIAL STATEMENTS

investment ramps up, the current operating margin returned to slightly above pre-crisis levels; – the discount rate rose from 9.5% to 10.4%, while the growth rate to infinity was the same as the one used at 31 December 2021 for the SOMFY CGU. The discount rate and the growth rate to infinity used to test the Répar’stores CGU for impairment were 11.3% and 3% respectively. The discount rate and the growth rate to infinity used to test the newly acquired Teleco Automation CGU for impairment were 10.5% and 3% respectively. The current environment is uncertain, and the above assumptions represent the Group’s current scenario. They are liable to change depending on the economic situation and the consequences of the crisis in Ukraine.

The impairment tests were conducted using the discounted cash flow method and based on the business plans reviewed by the management responsible for the CGUs. General Management, the Board of Directors and the Audit and Risk Committee have also ruled on the findings of these tests. The main assumptions used are as follows: – business plan assumptions include SOMFY’s commitments to sustainable development as set out in its Ambition 2030 roadmap; – in financial year 2023, the market is likely to remain buoyant and sales should grow; – profitability was exceptional in 2020 and 2021 thanks to non-structural savings. In 2022, as supplies remain tight and

BREAKDOWN OF THE GOODWILL OF THE MAIN CGUS AND DETAILS OF THE MAIN ASSUMPTIONS USED FOR EACH CGU AT 31 DECEMBER 2022

Given BFT’s full integration in SOMFY, residual goodwill was transferred to the SOMFY CGU’s overall goodwill.

Gross value Impairment

Net value Discount rate

Rate of growth to infinity

€ thousands

93,938 24,813 72,935 191,686

SOMFY

140,561 24,813 72,935 238,309

-46,623

10.4% 11.3% 10.5%

2.0% 3.0% 3.0%

Répar’stores

- -

Teleco Automation

TOTAL FULLY-CONSOLIDATED COMPANIES

-46,623

-

-

Following a review of the value of the goodwill, no impairment charge was recognised during the2022 financial year. Furthermore, no impairment was necessary in relation to assets with an unspecified life and the use of which is independent from other assets. Sensitivity analysis The SOMFY CGU is not subject to specificsensitivity testing given the very large safety marginarising from the value of goodwill recognised. The Group conducted sensitivity analyses on the results oifmpairment tests using different assumptions for EBITDA ratiaond discount rates. Analyses of the sensitivity of calculations to assumptions considered individually have highlighted scenarios where the recoverable value would fall below the book value of assets subjectto the tests, therefore requiring additional impairment of thelatter: – a two-point increase in the discount rate combined with a two-point decrease in the EBITDA to sales ratio in the normative flow used in the calculation of the terminal value could lead to therecognition of an impairment of €1.3 millionon the goodwill of Répar’stores. The Group considers these changes in assumptionsresulting in impairment losses unlikely.

OTHER INTANGIBLE ASSETS NOTE 5.2

Accounting principle Note 5.2.1

Intangible assets acquired by the Group are recognised at historical cost, after deduction of accumulated amortisation and potential writedown. Intangible assets primarily comprise: SOFTWARE Internally-developed software is recognised on the balance sheet when the following two conditions are met simultaneously: – it is probable that the future economic benefits attributable to the software will flow to the company; and – its cost or value can be measured reliably.

Conditions defined by IAS 38 in terms of development cost capitalisation must also be met (including project technical feasibility, intention to complete the software and availability of resources). The Group owns two major types of software: software subject to a five-stage development project and – rolled out in several countries is amortised on a straight-line basis over ten years. The five stages characterising the implementation of this type of IT projects are as follows: – the “initiation” stage, ending in a decision to carry out or not an IT solution research to meet a specific issue;

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SOMFY – ANNUAL REPORT 2022