Financial Report and Registration Document 2010 - Groupe Seb

3 NOTES
CONSOLIDATED FINANCIAL STATEMENTS
TO THE CONSOLIDATED FINANCIAL STATEMENTS
The main impairment loss recognised in 2010 was an additional impairment
of the All-Clad goodwill for €14.7 million. After the deep recession in 2009,
there was a significant recovery in sales in 2010 but the general environment
in US premium segment remains hesitant and pre-recession margins have
not yet been restored. These conditions were included in the business
plan that serves as a basis for impairment testing, leading to an additional
goodwill impairment loss of €14.7 million, in addition to the €21.2 million loss
already recognised in 2009. The main assumptions used for impairment tests
and sensitivity analyses in 2010 are described in Note 10.
The Group also booked a €3.6 million impairment loss for its Scales
manufacturing facility at Rumilly (France) to take account of a decline in
production volumes following the decision to relocate the production of
budget scales to China.
The main assumptions used in 2010 for impairment tests on the
manufacturing CGUs in Europe were as follows:
the weighted average cost of capital was estimated at 8.18% (vs. 8.66%
in 2009 and 8.83% in 2008);
the long-term growth rate beyond the 5-year period covered by the
business plan was set between 0% and 2%, depending on the business
of the CGU concerned (unchanged for the past three years).
Broadly, the tests performed on the European manufacturing CGUs
at end-2010 showed little sensitivity to changes in the financial
assumptions (WACC and long-term growth), thanks to a significant recovery
in production volumes in 2010.
2009
In 2009, following the deterioration in activity in the United States, especially
in the premium segment, a €20.4 million impairment loss was recognised
on All-Clad goodwill.
Impairment losses were also recorded on certain European manufacturing
assets:
Omegna (Italy), for €5.0 million, due to the reorganisation announced
in September resulting in a significant reduction in production capacity;
Mayenne (France), for €2.5 million, following the downgrading of
production forecasts for coffee makers and instant hot water dispensers;
Rumilly Drinks unit (France), for €1.2 million, due to the downgrading of
production forecasts for instant hot water dispensers;
Rumilly Scales unit (France), for €0.6 million.
2008
In 2008, impairment tests led to the recognition of impairment losses totalling
€16.1 million on the following European manufacturing CGUs:
Erbach (Germany), for €9.3 million;
Omegna (Italy), for €5.0 million, due to the plant operating significantly
below capacity;
Mayenne (France), for €1.8 million, due to inadequate margins, particularly
on coffeemakers.
In addition, a further impairment loss of €3.5 million was recognised
on the Mirro, WearEver and AirBake brands.
6.3. GAINS AND LOSSES ON ASSET DISPOSALS
AND OTHER
2010
The main gains and losses in 2010 include:
recognition of a €2.6 million provision for the dispute with one of the
Group’s former distributors in the Middle-East. Although the Group
believes it has complied strictly with the terms of the contract, the
provision has been taken to cover the uncertainties of the local judicial
process and other factors;
a loss of €1.5 million on the disposal of a logistics warehouse in Germany;
an additional €0.7 million provision for the dispute with a Chinese importer
described in Note 29.1 and the 2009 Registration Document, increasing
the total amount from €1.2 million to €1.9 million at 31 December 2010.
2009
In 2009, the Group booked a €1.2 million provision for a dispute with a
Chinese importer. The Group’s German companies paid exceptional
contributions of €1.0 million to the pension guarantee fund due to the
bankruptcy of certain companies participating in the plans in early 2009.
2008
The main gains and losses include:
the reversal of a provision for €8.0 million, following the abolition, in the
2009 Social Security Financing Act, of employer contributions to the fund
for early retirement benefits payable to workers exposed to asbestos in the
course of their work. Certain sites that were acquired in 2001 after Moulinex
filed for bankruptcy met the Act’s asbestos plan criteria. A provision of
€11.6 million was therefore set aside in 2004 and 2005, corresponding to
the discounted present value of Groupe SEB’s contribution to the early
retirement benefit fund. Following abolition of the funding obligation, the
corresponding provision was reversed in 2008, with the exception of an
amount of €0.8 million required to cover the 0.8 contribution;
proceeds of €1.5 million from the out-of-court settlement of a trademark
infringement claim made against a competitor.
80 FINANCIAL REPORT AND REGISTRATION DOCUMENT 2010 GROUPE SEB