Sopra Steria - 2019 Universal registration document

5 2019 CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements

The €36.2 million increase in translation adjustments mainly resulted from changes in the value of the euro against the following currencies:

31/12/2019

31/12/2018

(in millions of euros)

GBP

34.6

-5.5 -2.1

NOK-SEK

0.8 0.8

Other currencies

1.2

TOTAL

36.2

-6.4

8.1.2. Breakdown of goodwill by cash-generating unit (CGU) The net carrying amounts of goodwill by CGU are as follows:

31/12/2019

31/12/2018

(in millions of euros)

France

498.7 598.0 334.0 367.0

498.7 570.3 326.9 300.1

United Kingdom Other Europe (1)

Sopra Banking Software

Sopra HR Software

16.2

12.5

TOTAL

1,813.9

1,708.5

“Other Europe” comprises the following CGUs, which are tested separately: Germany, Scandinavia, Spain, Italy, Switzerland, Belgium, Luxembourg and Sopra Financial Technology. (1)

For each business combination, the Group may elect to recognise under its balance sheet assets either partial goodwill (corresponding only to its percentage of ownership interest) or full goodwill (also including the goodwill corresponding to minority interests) according to the method for business combinations presented in Note 2.1. This decision is made on an acquisition-by-acquisition basis.

Should the calculation of goodwill result in a negative difference (bargain purchase), the Group recognises the resulting gain entirely in profit or loss, after reassessing whether all assets and liabilities have been correctly identified. Goodwill is allocated to cash-generating units for the purposes of impairment tests as set out in Note 8.1.3. Such tests are performed when there is an indication of impairment, and in any event at the balance sheet date of 31 December.

8.1.3. Impairment testing The Group performed impairment tests as at 31 December 2019. These tests were performed using the following parameters:

Discount rate

Perpetual growth rate

31/12/2019

31/12/2018

31/12/2019

31/12/2018

France

8.5% 9.2%

8.4% 9.0%

2.1% 2.1% 2.1% 2.1% 2.1%

2.0% 2.0% 2.0% 2.0% 2.0%

United Kingdom Other Europe Sopra Ban60 king Software Sopra HR Software

8.4% to 9.8%

7.7-10.5%

8.5% 8.5%

8.4% 8.4%

The Group tested 0.5-point changes in these assumptions. A 0.5-point decrease in the perpetual growth rate, a 0.5-point increase in the discount rate, or both, would not lead to any recognition of impairment. Additional testing was performed to measure sensitivity to key assumptions (such as the discount rate, perpetual growth rate, operating margin and revenue growth rate) for each cash-generating unit.

The Group performed tests using the following assumptions: a 2-point increase in the discount rate; or p a 2-point decrease in the perpetual growth rate (i.e. no perpetual p growth); or the combination of a 2-point increase in the discount rate and a p 2-point decrease in the perpetual growth rate; or a 2-point decrease in the projected operating margin; or p a 2-point decrease in the projected growth rate. p

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SOPRA STERIA UNIVERSAL REGISTRATION DOCUMENT 2019