In accordance with IAS 36 “Impairment of Assets”, the goodwill and other non-financial assets of cash-generating units (CGUs) were tested for impairment losses.
CGUs are identified in line with operational reporting and their recoverable amounts are based on a value in use calculation. Values in use are determined by discounting the forecast operating cash flow before tax of the CGU (operating income plus depreciation and amortisation plus/minus the change in non-current provisions minus operating investments plus/minus the change in operating working capital requirement) at the rates indicated below.
For concessions, cash flow projections are calculated across the length of contracts by applying a variable discount rate, determined for each period depending on the change in the debt to equity ratio of the entity in question.
In the specific case of VINCI Airports, cash flow projections for owned airports are established over a 30-year period. At the end of that period, a terminal value is determined by capitalising the final year’s projected cash flow to infinity, and that value is discounted to present value.
For the other CGUs, cash flow projections are generally established for a five-year period on the basis of management forecasts.
At the end of that period, a terminal value is determined by capitalising the final year’s projected cash flow to infinity, and that value is discounted to present value.
Goodwill impairment tests are carried out using the following assumptions:
| Parameters of the model applied tocash flow projections | Impairment losses recognised in the period | |||||
|---|---|---|---|---|---|---|
| Growth rate (years Y+1 to Y+5) | Growth rate (terminal value) | Discount rate | ||||
| (in € millions) | 31/12/2022 | 31/12/2021 | 2022 | 2021 | ||
| Cobra IS | 5.3% | 1.5% | 11.3% | – | – | – |
| VINCI Airports | (*) | (*) | 8.0% | 6.9% | – | – |
| VINCI Energies France | 3.9% | 2.0% | 8.1% | 6.3% | – | – |
| ASF group | (*) | (*) | 8.3% | 6.4% | – | – |
| VINCI Energies Germany | 3.0% | 2.0% | 7.5% | 5.6% | – | – |
| VINCI Energies North America | 3.5% | 2.0% | 9.0% | 8.5% | – | (18) |
| VINCI Energies Benelux | 3.0% | 2.0% | 7.6% | 5.8% | – | – |
| VINCI Energies Scandinavia | 3.0% | 2.0% | 7.2% | 5.5% | – | – |
| VINCI Highways | (*) | (*) | 9.5% | 8.1% | – | – |
| Other | −1.5% to 9.3% | 1.0% to 3.5% | 6.3% to 15.1% | 4.5% to 12.8% | – | (1) |
| Total | – | (19) | ||||
(*) For concessions, cash flow projections are determined over the length of concession contracts.
The average revenue growth rate for the ASF group, based on the residual periods of contracts, is 1.7%. Those used for VINCI Airports and VINCI Highways are respectively 3.7% and 5.4%.
Impairment tests at 31 December 2022 were conducted on the basis of assumptions made by management at the business lines concerned, in line with macroeconomic forecasts in their business areas and geographies.
The increase in discount rates reflects current economic conditions and market volatility.
In addition:
| Sensitivity to rates | Sensitivity to cash flow | |||||
|---|---|---|---|---|---|---|
| Discount ratefor cash flows | Perpetual growth ratefor cash flows | Change in forecast operating cash flows (before tax) | ||||
| (in € millions) | 0.5% | −0.5% | 0.5% | −0.5% | 5.0% | −5.0% |
| Cobra IS | (284) | 314 | 227 | (206) | 301 | (301) |
| VINCI Airports | (1,940) | 2,241 | (*) | (*) | 1,356 | (1,356) |
| VINCI Energies France | (713) | 839 | 684 | (581) | 483 | (483) |
| ASF group | (425) | 438 | (*) | (*) | 1,158 | (1,158) |
| VINCI Energies Germany | (404) | 486 | 404 | (337) | 246 | (246) |
| VINCI Energies North America | (72) | 83 | 66 | (57) | 56 | (56) |
| VINCI Energies Benelux | (148) | 177 | 146 | (123) | 93 | (93) |
| VINCI Energies Scandinavia | (82) | 100 | 84 | (69) | 48 | (48) |
| VINCI Highways | (132) | 142 | (*) | (*) | 140 | (140) |
(*) Cash flow projections are determined over the residual periods of the concession contracts.
These sensitivity calculations show that a change of 50 basis points in the assumptions for discount and perpetual growth rates or a ±5% change in projected operating cash flow would not have a material impact on the Group’s consolidated financial statements at 31 December 2022.
An additional sensitivity calculation was carried out at 31 December 2022 for the VINCI Airports CGU, which showed that a 100 basis point increase in the assumed discount rates would result in a €3.6 billion reduction in value in use. In that scenario, however, the VINCI Airports CGU’s value in use would remain higher than its net carrying amount at 31 December 2022.
