2012 Annual Report - Italcementi Group

2012 Annual Report
Presentation 4
General information 14
Annual Report Consolidated Annual Report Directors’ report 30
Sustainability disclosure Italcementi S.p.A. Annual Report Consolidated financial statements 63
Extraordinary session 351
Market capitalization
Like most of the listed companies in the mature countries, during the year Italcementi S.p.A. recorded a
material reduction in market capitalization with respect to 2011.
Equally, the results of the impairment tests conducted at December 31, 2012 found a significant reduction in
the Group’s aggregate recoverability compared with the tests conducted in 2011; the decrease in recoverability
was, however, smaller than the contraction in market capitalization.
The impairment tests take account of the long-term expectations in cement consumption that can be assumed
from the structural demand curve and, for this reason, are less influenced overall by short-term changes. Shortterm
changes, on the other hand, correspond to the timeframe now typically adopted by many investors and,
together with the volatility in risk propensity levels, have an incisive influence on share prices, which are
particularly sensitive during periods of high financial unease.
We therefore believe that the difference in relative evolution found in the two valuations, which in any case is
consistent as indication of a trend, can be considered normal.
Sensitivity analysis
With reference to the current and expected industry situation and to the results of the 2012 impairment tests, a
sensitivity analysis was conducted on recoverable amount, using the discounted cash flow method.
At December 31, 2012 a 1% increment in the weighted average cost of capital would determine a surplus
difference in carrying amount with respect to recoverable amount for the following CGUs: Egypt 61.1 million
euro, Spain 35.4 million euro and Greece 4.3 million euro.
A 5% reduction in demand in the explicit forecast period with respect to the projections would determine a
surplus difference in carrying amount with respect to recoverable amount for the following CGUs: Egypt 23.1
million euro, Spain 10.6 million euro and Greece 3.1 million euro.
A 5% reduction in expected cash flows with respect to projections would determine a surplus difference in
carrying amount with respect to recoverable amount for the following CGUs: Egypt 27.4 million euro, Spain 9.5
million euro and Greece 2.2 million euro.
On the basis of this analysis, the Group deems it unnecessary to reduce the goodwill of the CGUs in question.
The discount rates before tax that equate the CGUs’ recoverable amount with net carrying amount for the
countries at greatest impairment risk are: North America 9.7%, Kuwait 9.8%, Italy 10.1%, Bulgaria 12.6%,
Kazakhstan 13.7%, Thailand 15.4% and India 19.7%.
95
www.italcementigroup.com