financial report and registration document 2011 - Groupe SEB

� €1 million in compensation costs incurred on the termination of contracts
with external sales representatives in Argentina, where a similar decision
was taken to insource sales forces;
� a €1.7 million provision set aside in the Netherlands for restructuring costs
that will be incurred as part of the project to streamline the Group’s supply
chain and after sales services in Western Europe.
2010
Restructuring costs for 2010 amounted to €15,0 million, mainly comprising:
� an additional cost of €4.8 million recorded in France due to the pension
reform that has extended the period during which the Group will incur
expenses under the pre-retirement plans introduced at certain sites in
2006;
� €6.5 million in compensation costs incurred in Brazil on the termination
of contracts with external sales representatives following the Group’s
decision to insource all of its sales forces with the aim of improving
customer service quality and controlling the entire value chain;
� sales force rationalisation costs of €2.4 million in China, where responsibility
for selling Tefal brand products was transferred to the Supor sales force.
2009
Restructuring costs for 2009 amounted to €41.3 million, mainly comprising:
� €7.9 million in costs related to the redundancy plan at the Erbach site in
Germany following the announcement on 11 February 2009 of a plan to
reorganise the Group’s European iron manufacturing operations;
� a total of €20.4 million in restructuring costs recorded in France due to:
� the reorganisation of iron manufacturing sites which resulted in a preretirement
plan at the Pont-Évêque site,
� provisions booked following the decision to combine the R&D and
marketing teams from the La Defense and Caen sites at a facility in
Burgundy to create a single, optimised “Electric Cooking Appliances” unit,
� an additional provision booked as a result of the 2006 Vosges site closure;
� a €5.8 million provision booked in Italy, where the Group announced job
cuts in September 2009 at the Omegna site;
� an aggregate €7.2 million in restructuring costs recorded in various other
countries, where in light of the severe economic crisis the Group continued
to realign the organisational structures for (i) its manufacturing facilities in
Brazil and the United States, (ii) its administrative functions in Spain, and
(iii) its sales activities in Norway and the United Kingdom.
Financial Report and Registration Document 2011
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Consolidated fi nancial statements
Notes to the consolidated fi nancial statements
Note 6.2. IMPAIRMENT LOSSES
2011
In application of the principle described in Note 1.4.3, certain manufacturing
cash-generating units (CGUs) were tested for impairment by comparing the
carrying amount of the assets of each CGU with their value in use. The value
in use calculations were performed based on the sum of discounted future
cash fl ows expected to be derived from the assets concerned as contained
in the fi ve-year business plan as well as a terminal value determined by
extrapolating the cash fl ows forecast for the last year of the plan. All CGUs
comprising intangible assets with an indefi nite useful life were tested for
impairment at the year-end and CGUs comprising assets with fi nite useful
lives were only tested when there was an indication that they may have been
impaired. The main impairment tests and CGUs concerned are discussed
in Note 10 - Intangible Assets.
The main impairment loss recognised in 2011 was an additional €7.2 million
impairment of the All-Clad goodwill, in addition to the €37.7 million loss
already recognized in 2010. The amount recognised in 2011 refl ects the fact
that the business plan used as the basis for the impairment test carried out
during the year factored in a fl at fi rst-half performance for All-Clad caused
by the continuing lacklustre environment in the US premium sector. The fairly
marked turnaround in All-Clad’s performance during the second half of the
year – driven by the launch of new cookware ranges – was not suffi cient to
fully offset this fi rst-half situation.
The Group also recognised other, less signifi cant, impairment losses in 2011
against goodwill relating to Greece and Vietnam, representing an overall
amount of €3.2 million.
In addition, a €3.1 million impairment loss was recorded to write down a
portion of the manufacturing assets of the Omegna site in Italy.
The main assumptions used in 2011 for impairment tests on the
manufacturing CGUs in Europe were as follows:
� the weighted average cost of capital was estimated at 8.49% (versus
8.18% in 2010 and 8.66% in 2009);
� the long-term growth rate beyond the fi ve-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-
2011 showed little sensitivity to changes in the fi nancial assumptions used
(WACC and long-term growth), thanks to satisfactory production volumes
in 2011.
2010
The main impairment loss recognised in 2011 was an additional write-down
of the All-Clad goodwill for €14.7 million. After the deep recession in 2009,
there was a signifi cant recovery in sales in 2010 but the general environment
in the US premium segment remained hesitant and pre-recession margins
were not restored by the year-end. These conditions were included in the
business plan that serves as a basis for impairment testing, which led to the
above-mentioned €14.7 million goodwill impairment loss in addition to the
€21.2 million loss already recognised in 2009.
GROUPE SEB
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