05 Financial performance 2024 consolidated financial statements 12.1.1 Goodwill At December 31, 2024, goodwill allocated to the CGUs or groups of CGUs is as follows: (in € millions) December 31, 2024 December 31, 2023 Passenger car tires – global brands CGU group 454 435 Passenger car tires – regional brands CGU 175 165 Light truck and Truck tires CGU group 647 641 Mining tires CGU(2) 248 278 Two-wheel tires CGU 18 21 Beyond-road tires CGU 753 707 Polymer Composite Solutions CGU group(1)(2)(3) 534 159 Other CGUs(1) - 576 GOODWILL 2,829 2,982 (1) Including goodwill recognized on acquisition of Flex Composite Group (note 4.2), which was presented separately in 2023. (2) The conveyor belts business has been transferred from the Mining tires CGU to the Polymer Composite Solutions CGU group. (3) Previously named High-Tech Materials CGU group. Goodwill has been tested for impairment using the following two main assumptions: n the terminal value takes into account an annual growth rate which depends on the nature of the activities and the countries where the assets are located; n 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 2024 for terminal value calculations are presented in the table below: (%) December 31, 2024 December 31, 2023 WACC Perpetual growth rate WACC Perpetual growth rate Passenger car tires – global brands CGU group 8.9 1.5 8.7 1.5 Passenger car tires – regional brands CGU 8.8 1.2 8.1 1.2 Light truck and Truck tires CGU group 9.3 1.1 9.1 1.1 Mining tires CGU(1) 10.2 1.5 10.2 1.5 Two-wheel tires CGU 9.2 1.6 9.0 1.4 Beyond-road tires CGU 8.8 1.8 8.5 1.8 Polymer Composite Solutions CGU group(1) 9.4 2.5 9.5 2.5 (1) The 2023 figures have been restated to permit meaningful comparisons. 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 2.7). 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 for all CGUs. Under this unfavorable scenario, total future cash flows would represent around €60 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. 403 2024 UNIVERSAL REGISTRATION DOCUMENT_MICHELIN
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