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The portfolio of foreign exchange derivatives is broken down as follows:
12/31/2018
12/31/2017
Fair value
(1)
Notional
amount
(2)
< 1 year
from 1 to
5 years
more than
5 years Fair value
(1)
Notional
amount
(2)
< 1 year
from 1 to
5 years
more than
5 years
Long position
of GBP against USD
(2.1)
32.4
20.4
12.0
0.0
0.1
32.4
25.2
7.2
0.0
Long position of
CAD against USD
(0.5)
36.0
24.0
12.0
0.0
1.7
57.6
33.6
24.0
0.0
Long position of
TRY against EUR
(0.5)
21.4
21.4
0.0
0.0
(0.6)
32.8
32.8
0.0
0.0
Long position of
PLN against EUR
0.0
16.8
16.8
0.0
0.0
0.1
16.8
16.8
0.0
0.0
Long position of
CZK against EUR
0.1
240.0
240.0
0.0
0.0
0.0
0.0
0.0
0.0
0.0
Long position EUR
against USD
2.8
178.9
111.9
67.0
0.0
13.5
214.9
116.0
98.9
0.0
(0.2)
14.7
(1) Fair value amounts are expressed inmillions of euros.
(2) Maximumnotional amounts are expressed inmillions of currencies.
Derivatives and hedging activities that meet the cash flowhedge criteria
are accounted for in accordance with the provisions of IFRS 9. Hedging
instruments aremeasured at fair value. Changes in value, are recognized
inrecyclableequity(othercomprehensive income—OCI)fortheeffective
portion of the hedge and in income for the ineffective portion. In
particular, the hedging activities accounted for as such are subject to
formaldocumentation justifyinginparticularthehedgingrelationship,its
effectiveness and the objective of the Group’s risk management and
hedgingstrategy.EffectivenesstestswerecarriedoutasatDecember31,
2018 and have demonstrated the effectiveness of the hedging
relationship.Thechanges inthefairvalueofhedging instrumentsthatdo
not meet the hedge criteria are recognized directly in income.
The sensitivity of financial instruments to a +/- 10% change in the EUR/
USD exchange rate is as follows:
12/31/2018
Impact (in €’000)
USD
exchange rate at the closing date
1,1450
Euro/dollar exchange rate
development assumptions
–10%
+10%
Euro/dollar exchange rate used for
the sensitivity analysis
1,0305
1,2595
Impact (before tax)
(16,8)
14,2
2.4.4
I
Risk related to the impairment of intangible
assets
The net amount of goodwill at December 31, 2018 amounted to
€348 million. At December 31, 2017, to carry out impairment tests on
goodwill, the Group has selected a strategic combination of Business
Units (B.U) that correspond to the segmentation and reporting structure
of the LISI Group, namely, the three divisions: LISI AEROSPACE,
LISI AUTOMOTIVE and LISI MEDICAL. This grouping is identical at
December 31, 2018.
The results of the impairment tests confirm the soundness of the
LISIAEROSPACEDivision,andshowthattheactivitiesofLISIAUTOMOTIVE
and LISI MEDICAL divisions have strengthened.
2.5
I
Detail of balance sheet items
2.5.1
I
Non-current assets
2.5.1.1 - Intangible assets
a) Goodwill
(in thousands of euros)
Goodwill
Gross goodwill as of December 31, 2017
321,377
Impairment over financial year 2017
0
Net goodwill as of December 31, 2017
321,377
Increase
23,253
Decrease
(2,273)
Changes in foreign exchange rates
5,431
Gross goodwill as of December 31, 2018
347,787
Impairment over financial year 2018
0
Net goodwill as of December 31, 2018
347,787
The increase is due to the updating of Termax goodwill over the period
(+€1.7million) and the entry of LISI AUTOMOTIVEHi-Vol Inc into the Group
scope (provisional calculation of €21.5 million).
The decrease concerns the exit of LISI AUTOMOTIVE BETEO GmbH
(€2.3 million).
Changes in currency exchange rate only concern LISI AEROSPACE and
result from translation differences on the dollar.
48 LISI 2018 FINANCIAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 3