Vetoquinol - Universal Registration Document - 2021

CONSOLIDATED FINANCIAL STATEMENTS Notes to the consolidated financial statements 88 Vetoquinol Universal Registration Document 2020 Financial report 6 Analysis of goodwill allocated to these CGUs: €000 Dec 31, 2020 Dec 31, 2019 Vetoquinol Biowet Poland 2,090 2,239 Vetoquinol GmbH/Germany 1,705 1,705 Vetoquinol UK 391 413 Farmvet Systems - 3,777 Vetoquinol Ireland 421 421 Vetoquinol Switzerland 1,043 1,038 Vetoquinol Austria 772 772 Vetoquinol Czech Republic 916 946 Vetoquinol USA 22,561 24,597 Vetoquinol Belgium 500 500 Vetoquinol Italy 6,465 6,465 Vetoquinol Brazil / Clarion* 8,087 49,915 Vetoquinol Scandinavia 1,098 1,055 Vetoquinol Asia 38 41 Vetoquinol India 7,923 8,859 Vetoquinol SA France 14,403 14,439 Vetoquinol Australia 1,614 1,729 Vetoquinol Canada 9,832 10,529 TOTAL 79,858 129,440 * Clarion Biociêncas Ltda was merged into Vetoquinol Saude Animal Ltda on March 29, 2020. • The differences in value between 2019 and 2020 result from the allocation of the purchase price of Clarion Biociências Ltda, impairment losses on the Vetoquinol Brazil and Farmvet Systems CGUs as well as exchange differences for Goodwill denominated in foreign currencies. The change in Goodwill over 2019 came from the acquisi- tion of Clarion Biociências, the allocation of the purchase price of Farmvet Systems and exchange differences. The recoverable value of intangible assets tested is the value in use determined using the discounted future cash flow method. Under this method, the recoverable amount of the asset is the present value of the estimated future cash flows expected from the continuous use of the asset and its disposal at the end of its useful life, less working capital and the value of other assets as of the date when the test is carried out. This valuation includes, in particular, a terminal value obtained by discounting to infinity a cash flow deemed to be normal at the end of the forecasting period. Cash flow forecasts were established over a five-year period, based on the 2021 Business Plan projections drawn up by management and the following main assumptions for the years 2022-2025: • WACC rates were determined for each CGU, taking into account the following: - risk-free rate: 2.5%; - market risk premium of 5.5%; - pre-tax cost of debt of 5.0%; - a sector gearing ratio of 4.5%; - a country risk premium and the country’s tax rate; - a median deleveraged Beta for the sector: 0.89; - Equity size premium of 1.6%.