Introduction
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A 1% decrease in the terminal growth rate on all the Group’s Cash Generating Units would lead to an impairment loss risk of around €14.8 million.
The terminal growth rate is consistent with market data, i.e. 2.5% for Europe and 3.0% for the rest of the world.
A 1-point decrease in the margin rate over the business plan period on all the Group’s Cash Generating Units would lead to an impairment loss risk of around €17.2 million.
Climate change risks and opportunities
L'Oréal used two opposing scenarios to measure the risks and opportunities related to climate change that could impact the Group's activities in the medium and long term. The methodology used is in line with the practices of the TCFD (Task Force on Climate-related Financial Disclosures) and the TNFD (Taskforce on Nature-related Financial Disclosures). The scenarios used are:
- the IPCC SSP1-2.6 scenario (formerly RCP 2.6) called Climate Nature Equilibrium. This scenario foresees strong international cooperation to limit global warming to 1.5°C, in line with the Paris Agreement, by focusing on sustainable development and effective climate policies;
- the IPCC SSP5-8.5 scenario (formerly RCP 8.5) called Disorderly and Degraded based on warming above 4°C, with strong population growth, limited environmental regulations and minimal efforts to combat climate change. The integration of these scenarios into the business plans of the CGUs at risk did not reveal any significant impact likely to generate a risk of depreciation of assets.
The net carrying amount of goodwill and brands with indefinite useful life breaks down as follows for the largest Cash Generating Units:
Note 8 Investments accounted for under the equity method
| € millions | 31.12.2024 | 31.12.2023 | 31.12.2022 |
|---|---|---|---|
| Investments accounted for under the equity method | Investments accounted for under the equity method 31.12.2024
|
||
| Amouage(1) | Amouage (1)31.12.2024 102.0 |
Amouage (1)31.12.2023 — |
Amouage (1)31.12.2022 — |
| LIPP Distribution | LIPP Distribution 31.12.2024 12.1 |
LIPP Distribution 31.12.2023 12.0 |
LIPP Distribution 31.12.2022 9.9 |
| Loshian Co(2) | Loshian Co (2)31.12.2024 — |
Loshian Co (2)31.12.2023 5.8 |
Loshian Co (2)31.12.2022 8.1 |
| Salon Interactive | Salon Interactive 31.12.2024 11.9 |
Salon Interactive 31.12.2023 8.8 |
Salon Interactive 31.12.2022 — |
| Other | Other 31.12.2024 0.4 |
Other 31.12.2023 0.5 |
Other 31.12.2022 0.5 |
| TOTAL | TOTAL 31.12.2024 126.4 |
TOTAL 31.12.2023 27.0 |
TOTAL 31.12.2022 18.4 |
