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The net values of the goodwill is divided at December 31, 2018 as follows:
In millions of euros
LISI AEROSPACE
division
LISI AUTOMOTIVE
division
LISI MEDICAL
division
LISI TOTAL
Net goodwill
137.5
120.6
89.7
347.8
Intangible fixed assets
of indeterminate utility duration
None
None
None
None
Trademarks
None
None
None
None
Result of the impairment test
No sign of impairment No sign of impairment No sign of impairment
Key assumptions
Cash flow within one year
Forecasts
Forecasts
Forecasts
Cash flow within four years
4-year strategic plan
4-year strategic plan
4-year strategic plan
Discount rate after tax
7.52%
7.89%
6.80%
Growth rate of flows not covered by the budget and
strategic assumptions
2.00%
2.00%
2.00%
The net values of the goodwill is divided at December 31, 2017 as follows:
In millions of euros
LISI AEROSPACE
division
LISI AUTOMOTIVE
division
LISI MEDICAL
division
LISI TOTAL
Net goodwill
136.4
97.6
87.4
321.4
Intangible fixed assets
of indeterminate utility duration
None
None
None
None
Trademarks
None
0.8
None
0.8
Result of the impairment test
No sign of impairment No sign of impairment No sign of impairment
Key assumptions
Cash flow within one year
Forecasts
Cash flow within four years
4-year strategic plan
4-year strategic plan
4-year strategic plan
Discount rate after tax
7.09%
8.15%
5.24%
Growth rate of flows not covered by the budget and
strategic assumptions
2.00%
2.00%
2.00%
InaccordancewithIAS36“ImpairmentofAssets”,goodwillwastestedfor
impairment on December 31, 2018.
These tests, in accordance with Note 2.2.8.5, were conducted for each
CGUcorrespondingtothedivisions.Thecombinationsofcashgenerating
units (CGU) are determined in accordance with the operational reporting
and their recoverable values on the basis of a calculation of utility value.
Each utility value is calculated based on the discounting, at the rates
mentioned below, of the forecast operating cash flows after taxes. The
projections of cash flow are determined based on budget data and the
four-year strategic plans approved by the Board of Directors.
Beyond the fifth year, the terminal value is calculated on the basis of a
capitalization to infinity of the cash flows. The key assumptions relate in
particulartotheevolutionofsalesbasedontheorderbookandthemaster
contracts signedby theGroup, if applicable, theoperatingprofit rate, the
renewal capex rate, and the determination of factors that may affect the
working capital. The assumptions are in particular established on the
basis of observationsmade during previous activity cycles in the various
linesofbusiness,aswellasinexternalmarketsurveysandtheobservation
of the sensitivity of the contractual data for the environment of each
division. It is specified that these assumptions are the best estimate
possible of themarket situation at the time they were prepared, and that
theytake intoconsiderationthemarkettrendsfortheyears2019to2022.
The determination of the infinite growth rate and the discounting rates
used on the different combinations of CGUs was carried out by an
independent expert.
Thediscountingratesaftertaxeswereusedonthebasisofanassessment
of the specific risks of these businesses.
49 LISI 2018 FINANCIAL REPORT CONSOLIDATED FINANCIAL STATEMENTS 3