Orano - Annual Activity Report 2024 384 6 STATEMENTS Statutory Auditors’ report on the consolidated financial statements for the financial year ended December 31, 2024 For the Group’s Mining and Front End activities, these tests are implemented in the following manner, as described in Notes 9 “Goodwill”, 10 “Intangible assets”, 11 “Property, plant and equipment” and 31 “Challenges related to climate risks” to the consolidated financial statements: with respect to Mining activities: ● the cash-generating units (CGUs) of the Mining BU correspond to the mining sites operated by the Group, solely or in partnership. The impairment test on goodwill – which amounts to 925 million euros – is performed at the level of the Mining BU’s group of CGUs, ● the property, plant and equipment and intangible assets of the mining sites making up the CGUs of the Mining segment are tested for impairment at each year-end; ● with respect to Front End activities: ● a distinction should be made between the Enrichment activity corresponding to a single CGU and including goodwill in the amount of 161 million euros and intangible assets and property, plant and equipment, and the other activities to which no goodwill is allocated, ● the property, plant and equipment and intangible assets related to these activities are tested at the level of each CGU and are tested for impairment whenever there is an indication of a loss or increase in value. The impairment tests of assets relating to the Group’s Mining and Front End activities are based on the estimate of the recoverable amount corresponding to the higher of: ● fair value less costs to sell; this fair value is based on observable data (recent transactions, offers received from potential buyers, reported ratios for comparable companies, multiples of uranium resources in the ground for mineral deposits that have not been mined); and ● value in use, which is equal to the present value of projected future cash flows. The future cash flow projections established for these tests are based on fundamental assumptions and estimates such as: ● assumptions as to the price of uranium, conversion and enrichment based on the prices in the order book and derived from projected curves based on the Group’s view of the trends in supply and demand for uranium and for conversion and enrichment services; ● forecast production and cost data; ● capital expenditure for the decarbonization of energy sources; ● discount rates applied to future cash flows. We deemed the measurement of goodwill, intangible assets and property, plant and equipment related to the Mining and Front End activities to be a key audit matter due to: ● the potentially significant impact of impairment tests on the income statement; ● uncertainties surrounding certain assumptions, particularly those that could be impacted by exogenous factors (uranium prices, conversion and enrichment prices, exchange rates and market environments, especially multiples of uranium resources in the ground); ● the high sensitivity of measurements to operating, macroeconomic, sectoral and financial assumptions; ● the high degree of judgment required by management with respect to these estimates and assessments. How our audit addressed this risk We assessed the methodology’s compliance with the applicable accounting standards and gained an understanding of the methods used to carry out impairment tests. In particular, we assessed the methods used to determine the groups of CGUs as well as the level at which goodwill is tested. For all impairment tests we: ● gained an understanding of indications of a loss or increase in value; ● assessed the consistency of the forecast data used in the impairment tests with the budget and medium-term plan (“financial projections”) prepared by management and approved by the Board of Directors; ● assessed the consistency of the cash flow projections with the information sources available to us (order books, mining plans, operational life of assets, market comparisons, etc.) and with past outcomes; ● assessed, with the help of our experts, the reasonableness of the measurement inputs used (discount rate and long-term inflation rate); ● reconciled the carrying amount of the net economic assets tested with the underlying accounting items; ● critically examined the sensitivity tests carried out by management, particularly assumptions regarding selling prices, exchange rates (especially the euro/dollar exchange rate) and the discount rate. More specifically, ● with regard to assumptions of uranium, conversion and enrichment prices, we: ● confirmed, using sampling techniques, the consistency of current prices, used as a benchmark, with contractual data derived from the fi xed component of the backlog, ● gained an understanding of the analyses prepared by the Group or external experts to construct projected price curves, ● compared the assumptions used to construct these projected curves with the available market data, ● analyzed the changes in the prices used compared to those of the previous year; ● in relation to the Mining activities, we assessed the consistency of the projected data used in the impairment tests with the mining plans prepared for each mine. In addition, for mineral deposits that have not yet been mined, we studied the resale value assumptions measured on the basis of observable data (recent transactions, offers received from buyers, reported
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