_392 2023 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN 5 FINANCIAL PERFORMANCE 2023 consolidated financial statements 13.1 Goodwill At December 31, 2023, goodwill allocated to the CGUs or groups of CGUs is as follows: (in € millions) December 31, 2023 December 31, 2022 Passenger car tires – global brands CGU group 435 429 Passenger car tires – regional brands CGU 165 172 Light truck and Truck tires CGU group 641 644 Mining CGU group 278 289 Two-wheel tires CGU 21 20 Beyond-road tires CGU 707 741 High-Tech Materials CGU group 159 135 Flex Composite Group* 576 - GOODWILL 2,982 2,430 * pending completion of the allocation Goodwill has been tested for impairment using the following two main assumptions: ● the terminal value takes into account an annual growth rate that depends on the type of business and the countries where the assets are located; ● the CGUs' future cash flows are discounted using the aftertax weighted average cost of capital (WACC) applied to aftertax cash flows. They are determined by geographical region taking into account the features of the business. After-tax discount rates and perpetual growth rates used in 2023 for terminal value calculations are presented in the table below: (%) WACC Perpetual growth rate Passenger car tires – global brands CGU group 8.7 1.5 Passenger car tires – regional brands CGU 8.1 1.2 Light truck and Truck tires CGU group 9.1 1.1 Mining CGU group 10.1 1.5 Two-wheel tires CGU 9.0 1.4 Beyond-road tires CGU 8.5 1.8 High-Tech Materials CGU group 9.1 2.5 A 50-basis point increase in WACC combined with a 100-basis point decrease in the perpetual growth rate applied to the groups of CGUs would not lead the Group to recognize any significant amount of impairment. Projected future cash flows used for impairment testing of fixed assets include capital expenditure to be made to fulfill the Group's energy transition ambitions (note 2.5). Internal analyses of the effects of climate change have not led to the identification of any significant risk that could lead to an impairment in value of the Group’s assets. For CGUs or groups of CGUs to which goodwill has been allocated, a simulated impairment test has been carried out by limiting estimates of future cash flows to the next 20 years based on constant cash flows after the fifth year. Under this unfavorable scenario, total future cash flows would represent €170 million less than the value of the Group’s assets. To take into account the effect of applying IFRS 16, right-of-use assets have been included in the assets to be tested, the corresponding lease liabilities have been deducted from the value of the CGUs concerned and values in use include lease payments determined in accordance with IFRS 16.
RkJQdWJsaXNoZXIy NzMxNTcx