Plastic Omnium - 2018 Registration Document

4 2018 CONSOLIDATED FINANCIAL STATEMENTS Consolidated financial statements at December 31, 2018 www.plasticomnium.com PLASTIC OMNIUM 2018 REGISTRATION DOCUMENT 142 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 4.2.6 The Board of Directors approved the consolidated financial statements for the year ended December 31, 2018 for the Plastic Omnium Group on February, 13, 2019, which will be submitted to the Combined Shareholders’ Meeting on April 25, 2019. PRESENTATION OF THE GROUP Compagnie Plastic Omnium, which was set up in 1946, is governed by French law. The bylaws set its duration until April 24, 2112. It is registered in the Lyon Trade and Companies Register under number 955 512 611 and its registered office is at 19, boulevard Jules Carteret, 69007 Lyon, France. The terms “Compagnie Plastic Omnium”, “the Group” and “the Plastic Omnium Group” refer to the group of companies comprising Compagnie Plastic Omnium and its consolidated subsidiaries. The Plastic Omnium Group is a global leader in the transformation of plastic materials for the automotive market for body parts modules, stockage storage systems and fuel supply systems (Industries Division) and front-end modules (Modules Division). The Group sold the business of the Environment Division on December 18, 2018 (see Note 2.6.1 “Disposal of the Environment business” in the “Significant events of the period”). As the Environment Division is a separate business sector, the profit after tax of this discontinued activity is presented on a single line for 2018 and 2017 has been restated in the same way in accordance with IFRS 5 “Non-current Assets Held for sale and discontinued operations”. The “restated” concept is used for all footnotes to the 2017 income statement. At December 31, 2018, the entire Group revenue was generated from automotive business. Furthermore, the acquisition of control of HBPO, the world leader in front-end modules, in the 2018 fiscal year, led the Group to organize its businesses around two operating segments: Plastic Omnium Industries: production activities, with significant ● investments in plants and long cycles; Intelligent Exterior Systems, dedicated to complex body and ● intelligent body systems, replacing the former “Auto Exterior” terminology, Clean Energy Systems, dedicated to clean energy storage systems, ● replacing the former “Fuel Systems” terminology; Plastic Omnium Modules: module assembly ● Plastic Omnium Group shares have been traded on the Paris Stock Exchange since 1965. The Group has been traded on Eurolist subfund A of since January 17, 2013 and is listed on the SBF 120 and the CAC Mid 60 indices. The main shareholder is Burelle SA, which held 58.51% of the Group’s shares at December 31, 2018 (59.42% excluding treasury stock). The unit of measurement used in the Notes to the consolidated financial statements is thousand of euros, unless otherwise indicated. ACCOUNTING POLICIES, ACCOUNTING NOTE 1 RULES AND PRINCIPLES Accounting policies, accounting rules 1.1 and methods The accounting policies used to prepare the consolidated financial statements are those applied by the Group at December 31, 2017, except for IFRS 15 “Income from activities drawn from contracts with customers” and IFRS 9 “Financial Instruments” applied by the Group as of January 1, 2018. They comply with IFRS standards and interpretations as adopted by the European Union at December 31, 2018 and available on the website: http :/ /ec.europa.eu/internal_market/accounting/ias_fr.htm#adopted- commission . IFRS includes the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS) as well as the International Financial Reporting Interpretations Committee (IFRIC). These accounting principles do not differ significantly from mandatory standards and interpretations as of December 31, 2018, as published by the IASB. The Group has not anticipated the application of standards, interpretations and amendments that are not mandatory at December 31, 2018. Standards, interpretations and amendments applicable after January 1, 2019: The Group has been applying IFRS 16 “Leases” since January 1, 2019. This standard published in early 2016 by the IASB with a date of application on January 1, 2019 was backed by the European Union on October 31, 2017. The impact on the Group of the application of this standard is an increase in property, plant and equipment and of the financial debt of around €220 million at January 1, 2019, mainly linked to property leases. This estimate was made on all tangible assets worth more than €5,000 leased by the Group’s subsidiaries. Future rents have been discounted using discount rates specific to each entity. The impact covers more than 80% of the rental contracts (mainly factories, warehouses). The Group’s processes have been adapted for effective application in the Group’s financial statements as of January 1, 2019. Consolidation principles 1.1.1 Companies in which the Group holds more than 50% of the voting rights enabling it to exercise exclusive control or when the governance arrangements allow the Group to have power over the companies, are fully consolidated. Companies in which the Group holds less than 50 per cent but over which the Group exercises control in substance are also fully consolidated. Companies over which the Group exercises joint control with other shareholders, regardless of the percentage of the holding, treated as “joint ventures” insofar as the Group has no joint operations, in addition to the companies over which the Group exercises significant influence (significant influence is assumed when the Group holds more than 20% of the voting rights in a company), and classified as “Interests in associates” are accounted for using the equity method.