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4.1 CONSOLIDATED FINANCIAL STATEMENTS AND NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Note 9. Intangible assets
DANONE
REGISTRATION DOCUMENT 2015
118
Goodwill of the groups of CGUs in the Early Life
Nutrition and Medical Nutrition Divisions
As of December 31, 2015, the recoverable amount exceeded the
carrying amount by €1.6 billion in the case of the Medical Nutrition
group of CGUs, €2.9 billion in the case of the Early Life Nutrition
Rest of the World group of CGUs and €1.8 billion in the case of the
Early Life Nutrition Asia group of CGUs.
In addition, an analysis of the sensitivity of the value in use to the key
assumptions was carried out for each of the three groups of CGUs.
The assumptions used in the valuation model used by the Group are
(i) the growth in Net sales, (ii) the Trading operating margin (cor-
responding to the ratio Trading operating income over Net sales),
(iii) the long-term growth rate used to calculate the terminal value,
and (iv) the discount rate.
Results of sensitivity analysis
Year ended December 31
Impact on
recoverable amount
Annual decrease to make recoverable
amount equal carrying amount
(in € billions)
(in percentage)
2014
2015
2014
2015
Net sales – 50 bps decrease
(a)
Early Life Nutrition Asia
(0.2)
(0.2)
(6)%
(7)%
Early Life Nutrition
Rest of the World
(0.3)
(0.3)
(4)%
(6)%
Medical Nutrition
(0.2)
(0.2)
(3)%
(4)%
Trading operating margin – 100 bps
decrease
(b)
Early Life Nutrition Asia
(0.3)
(0.3)
(6)%
(6)%
Early Life Nutrition
Rest of the World
(0.4)
(0.5)
(5)%
(6)%
Medical Nutrition
(0.3)
(0.3)
(3)%
(6)%
Long-term growth rate –
50 bps decrease
Early Life Nutrition Asia
(0.2)
(0.2)
Early Life Nutrition
Rest of the World
(0.4)
(0.3)
Medical Nutrition
(0.3)
(0.3)
Discount rate – 50 bps increase
Early Life Nutrition Asia
(0.2)
(0.2)
Early Life Nutrition
Rest of the World
(0.3)
(0.3)
Medical Nutrition
(0.3)
(0.3)
(a) Decrease applied, each year, to the assumed growth in Net sales, including the final year, based on (i) the 2015 projections for tests performed in 2014, and
(ii) the 2016 projections for the tests performed in 2015.
(b) Decrease applied, each year, to the assumed growth in Trading operatingmargin, including the final year, based on (i) the 2015 projections for tests performed
in 2014, and (ii) the 2016 projections for the tests performed in 2015.
Goodwill of other CGUs
As of December 31, 2015, the CGUs of the Fresh Dairy Products and
Waters Divisions represented in total 21% of the carrying amount
of the Group's goodwill and comprised more than 30 CGUs located
in diverse geographic regions and in different countries.
As of December 31, 2015, following the impairment review of intan-
gible assets with indefinite useful life of these CGUs, the Group
recognized impairment on a Waters Division CGU in the amount
of €2 million, which was recorded under Other operating income
(expense) for the period.
As of December 31, 2014, following the impairment review of intan-
gible assets with indefinite useful life of these CGUs, the Group did
not recognize any impairment provisions.
Brands with indefinite useful lives
The Group's main brands are
Dumex
,
Nutricia
and
Milupa
. As of
December 31, 2015, they represented more than 60% of the carrying
amount of the Group's brands with indefinite useful lives and none
represented individually more than 40% of the carrying amount of
the Group's brands with indefinite useful lives. The other brands
are spread over all Divisions and located in diverse geographic
regions and different countries and none represented individually
more than 10% of the carrying amount of the Group's brands with
indefinite useful lives as of December 31, 2014.