SOMFY // 2022 Annual Report

05 CONSOLIDATED FINANCIAL STATEMENTS

The impact of changes in consolidation scope is linked to the acquisitions of Répar’stores (2021) and Teleco Automation (2022), mainly consisting of the recognition of customer bases valued at €15.5 million and €52.8 million respectively. Development expenses fulfilling the criteria of IAS 38 are capitalised and deemed as internally generated intangible assets. At 31 December 2022, the gross value of these assets was€59.9 million, of which €8.5 million was in progress and the net value was €21.5 million. In addition to capitalised expenses, the amount of research and development expenses recognised during theyear was €133 million. There are no contractual commitments to purchase intangible assets. Net intangible assets recognised in the context of business combinations at 31 December 2022 comprised €24.6 million in brands, €52.8 million in customer base and €15 million in patents, compared with €1.2 million in brands, €14.5 million in customer base and €0.3 million in software at 31 December 2021. The increase over the period is the result of the acquisition of Teleco Automation (see note 2.3.2).

PROPERTY, PLANT AND EQUIPMENT NOTE 5.3

Accounting principle Note 5.3.1

Except for business combinations, PPE assets are recorded at their acquisition or production cost, which includes the purchase price and all costs necessary to make the assets operational. Current maintenance costs are recognised as expenses for the financial year. Straight-line depreciation is used based on the following average useful lives: – buildings: 20 to 30 years; – machinery and tools: 5 to 10 years; – transport vehicles: 3 to 5 years; – office furniture and equipment: 5 to 10 years; – fittings and fixtures: 8 to 10 years. Taking account of the nature of PPE held by the Group, no significant component was identified. Subsequent expenditures may be capitalised if they comply with asset recognition criteria, as defined by IAS 16, in particular if it is probable that the future economic benefits of the asset will flow to the company. These criteria are considered prior to incurring the cost. Asset residual values, useful lives and asset depreciation are reviewed, and amended if necessary, at each annual closing. PPE recoverable amounts are reviewed when events or changes in circumstances indicate that the book value may not be recovered. PPE are derecognised at disposal or when no future economic benefit is expected from their use or disposal. Any profit or loss resulting from the derecognition of an asset (measured as the difference between the net proceeds of the sale and the book value of the asset) is included in the income statement for the year in which the asset is derecognised. PRINCIPLES APPLICABLE TO LEASES (IFRS 16) The Group mainly holds property leases covering SOMFY’s various locations around the world and vehicle leases. The Group has a number of industrial or IT equipment leases of less significance. Leases are recognised in the balance sheet with effect from their inception date at the present value of future payments (mainly fixed) based on the lessee’s marginal borrowing rate at the date of the lease agreement. This is the rate of interest the lessee

would have to pay to borrow the funds needed to acquire the asset over a similar term and ina similar economic environment. Leases are recognised under “lease liabilities”, with a corresponding entry on the asset side under “rights of use in relation to leases”, with each item stated in the relevant category of underlying asset. PPE financed through leases are depreciated over the same periods as PPE acquired outright where the Group expects to gain ownership of the asset at the expiry of the contract. If not, the asset is depreciated on the basis of the shorter period of the asset useful life and the duration of the lease. In the income statement, depreciation is recognised within the operating margin and interest expenses in net financial income/(expense). The tax impact of this consolidation adjustment is taken into account through the recognition of deferred taxes. The lease term is defined on a case-by-case basis and corresponds to the enforceable period of the lease taking into account any optional periods that are reasonably certain to be exercised. The Group applies IFRIC provisions over the enforceable duration of the leases. The depreciation period for fixtures and fittings in the context of property leases is the shorter of the useful life of the asset and the lease term. The right-of-use asset will in some cases be subject to adjustment when the lease liability is remeasured ( e.g. when there is a change of index or interest rate, the lease is extended or terminated or a substantially fixed lease payment is reviewed), and its value will be regularly revised down in the event of impairment losses. Leases corresponding to assets of low unit value (US$5,000 or less) and those whose term is short (12 months or less) are recognised directly in operating expenses. Leases relating to low-value assets mainly concern small items of IT equipment. Until 1 January 2019, only those leases classed as finance leases were recognised – i.e. those that transferred substantially all the risks and rewards of ownership to the lessee, in accordance with IAS 17. Such leases continued to be recognised following the adoption of IFRS 16 on 1 January 2019.

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SOMFY – ANNUAL REPORT 2022