Faurecia Automotive GmbH

Forvia S.E.

Nanterre

Konzernabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

ANNUALS RESULTS 2023

Contents

Key figures

1. Business review

1.1. Notable facts

1.2. Main events

1.3. Automotive production

1.4. Sales

1.5. Operating income

1.6. Net income

1.7. Financial structure

1.8. Outlook

2. Consolidated financial statements

2.1. Consolidated statement of comprehensive income

2.2 Consolidated balance sheet

2.3 Consolidated cash flow statement

2.4 Consolidated statement of changes in equity

2.5. Notes to the consolidated financial statements

List of consolidated companies as of December 31, 2023

3. Statutory auditors' report on the consolidated financial statements

Statutory auditors' report on the consolidated financial statements

Key figures ^*

^* All results presented after application of IFR5 for 2022.
⁽¹⁾ At constant currencies and scope.
⁽²⁾ Before amortization of acquired intangible assets (§ 2.1 to the consolidated financial statements).
⁽³⁾ Operating income before depreciations and amortization of assets (§ 2.3 to the consolidated financial statements).
⁽⁴⁾ Note 26.1 to the consolidated financial statements.

1. Business review

1.1. Notable facts

1.2. Main events

1.3. Automotive production

1.4. Sales

1.4.1. Sales by region

1.4.2. Sales by customer

1.4.3. Sales by Business Group

1.5. Operating income

1.5.1. By region

1.5.2. By Business Group

1.6. Net income

1.7. Financial structure

1.7.1. Net cash flow

1.7.2. Reconciliation between net cash flow and cash provided by operating and investing activities

1.7.3. Net Debt

1.8. Outlook

1.1. Notable facts

The worldwide automotive production showed strong dynamics in 2023 with a global production of 90.3 million light vehicles, corresponding to a 9.7% growth year on year. The market was supported by a very robust global demand and the progressive normalization of semi-conductor's supply. The 2023 level exceeded the c. 89 million light vehicle production reached in 2019 (pre-Covid level), but with a different regional mix: in 2023, China represented 32% of worldwide light vehicle production (vs. 27% in 2019) and Europe represented 20% (vs. 24% in 2019).

Consistently with its early 2023 announcements, FORVIA has concluded its disengagement from Russia, with the sale of its three operating entities (Faurecia Environmental solutions-Russia, Faurecia Automotive Solutions, Faurecia Interior Togliatti) in December 2023, after having obtained the necessary regulatory authorizations from the Russian administration. FORVIA have no operational activities in Russia since end of December 2023.

The impact of cost inflation has however persisted during the year 2023; compared to 2022, which predominantly caused by increase in raw material prices, cost inflation in 2023 mainly related to energy, labor and, to a lesser extent, raw material prices (some of them starting to go down).

During 2023, FORVIA signed and closed agreements finalizing the €1 billion first disposals program initiated in 2022 :

In August and November 2023, FORVIA's corporate ratings assigned by S&P (BB), Moody's (Ba2) and Fitch (BB+) were reaffirmed and the outlook was raised from "negative" to "stable" by the three rating agencies.

The Group's financial debt stood at €6,987 million at December 31, 2023 compared to €7,939 million at December 31, 2022. The €952 million decrease in the net debt mainly stems from the positive net cash flow evolution, the disposals that took place in 2023 and other elements.

In accordance with IFRS 5, "net income of discontinued operations" presented in the consolidated statement of comprehensive income amounted to €-5.4 million including the operations of the SAS business from January 1, 2023 to July 31, 203 for total sales of €593.6 million as well as the net loss on disposal related to this activity of €-6.3 million and the directly incrementable expenses related to the sale.

The accounting principles and methods applied to discontinued operations are identical to those used for the annual financial statements.

MSCI, leading ESG rating agency upgraded FORVIA's rating from "BBB" to "A". The agency welcomes positive evolution in the governance, specifically the alignment of the Board structure with investor's interests. MSCI also highlights the entry in the Lighting business which has intrinsically lower exposure to product liability risks than other products in the auto supplier sector. After the previous upgrade from "BB" to "BBB" obtained in July 2022, this new step underlines the Group's constant progress on ESG topics and now ranks FORVIA within the first quartile of the MSCI 32 auto components manufacturers universe.

1.2. Main events

January 2023

February 2023

March 2023

April 2023

May 2023

June 2023

July 2023

August 2023

September 2023

October 2023

November 2023

December 2023

January 2024

February 2024

All press releases related to these events are available on the site www.forvia.com.

1.3. Automotive production

Worldwide automotive production increased by 9.7% from 2022 to 2023. It increased in EMEA (Europe Middle East and Africa) by 11.5%, increased in Americas by 8.6% and increased in Asia by 9.4%, of wich increased in China by 10.0%.

The data related to automotive production and volume evolution is based on S&P Global Mobility (ex-IHS Markit) forecast dated February 2024 (vehicles segment in line with CAAM for China).

Automotive production and volume evolution from 2022 to 2023

1.4. Sales

FORVIA's year-on-year sales evolution is made of three components:

As "Scope effect", FORVIA presents all acquisitions/divestments, whose sales on an annual basis amount to more than €250 million. Other acquisitions below this threshold are considered as "bolt-on acquisitions" and are included in "Growth are constant currencies".

In 2023, there was no effect from "bolt-on acquisitions".

^* Scope effect includes CVI sales from September to December 2022.

^* Scope effect includes HELLA sales of January 2023 and CVI sales from September to December 2022.

Sales of products (parts, components and R&D sold to manufacturers) reached €25,950.2 million in 2023 compared to €23,233.1 million in 2022. This represents an increase of 11.7% on a reported basis and by an increase of 14.7% at constant scope & currencies.

Sales of tooling, prototypes and other services reached €1,297.7 million in 2023 compared to €1,340.6 million in 2022. This represents a decrease of 3.2% on a reported basis and an increase of 1.7% at constant scope & currencies.

Sales reached €27,247.9 million in 2023 compared to €24,573.7 million in 2022. This represents an increase of 10.9% on a reported basis and an increase of 14.0% at constant scope & currencies.

1.4.1. Sales by region

^* Scope effect includes CVI sales from September to December 2022.

^* Scope effect includes HELLA sales of January 2023 and CVI sales from September to December 2022.

Sales by region in 2023 were as follows:

Worldwide sales amounted to €27,247.9 million compared to €24,573.7 million in 2022. This represents an increase of 10.9% on a reported basis and 14.0% at constant scope and currencies. This is to be compared to a 9.7% upturn in production market in the world source S&P Global Mobility (ex-IHS Markit) forecast dated February 2024.

1.4.2. Sales by customer

In 2023, sales to FORVIA four main customers (VW, Stellantis, Renault-Nissan - Mitsubishi, Ford) amounted to €12,557.9 million or 46.1% compared to 47.9% in 2022:

1.4.3. Sales by Business Group

^* Scope effect includes CVI sales from September to December 2022.

^* Scope effect includes HELLA sales of January 2023 and CVI sales from September to December 2022.

In 2023:

1.5. Operating income

In 2023:

1.5.1. By region

The operating income in 2023 compared to 2022 increased by €378.6 million:

1.5.2. By Business Group

In 2023 :

1.6. Net income

The net income group share is a gain of €222.2 million, or 0.8% of sales in 2023. This is to be compared to a loss of €381.8 million or -1.6% of sales in 2022. It represented an increase of €604.0 million.

In 2023:

Basic earnings per share amounted to €1.17 (diluted net earnings per share at €1.16) compared to €-2.20 in 2022 (diluted net earnings per share at €-2.20).

1.7. Financial structure

1.7.1. Net cash flow

The net cash flow was an inflow of €649.1 million or 2.4% of sales compared to a net cash inflow of €483.4 million or 2.0% of sales over the same period in 2022 after IFRS 5:

Growth in net cash flow in 2023 is supported by the initial results of the "Manage by cash" program launched in mid-2022.

1.7.2. Reconciliation between net cash flow and cash provided by operating and investing activities

1.7.3. Net Debt

A series of Schuldscheindarlehen (private placement under German law):

A series of bank loans:

Besides, Forvia holds a €1,500 million syndicated credit facility whose maturity has been extended to May 2027, with a remaining one-year maturity extension option. As at December 31, 2023, this facility was not used and fully available for its total amount.

Hella's syndicated credit facility amounts to €450 million, with one option to increase the available amount by €150 million and its maturity is December 2026, with a remaining one-year maturity extension option. As at December 31, 2023, this facility was not used and fully available for its total amount 1.8. Outlook

2024 GUIDANCE

This guidance is based on:

And assumes no major lockdown impacting production or retail sales in any automotive region during the year.

It takes into consideration:

2024 guidance is on track to reach POWER25 ambition:

ON TRACK TO POWER25 AMBITION

The Group reiterates its FY2025 objectives, as presented at the Capital Markets Day held in November 2022:

These objectives were based on average 2025 currency rates of 1.05 for €/USD and of 7.00 for €/CNY and assumed no major lockdown impacting production or retail sales in any major automotive region over the period.

These objectives, evidently, did not take into consideration any impact from the second €1 billion disposal program that was announced in October 2023.

2. Consolidated financial statements

2.1. Consolidated statement of comprehensive income

2.2 Consolidated balance sheet 2

2.3 Consolidated cash flow statement

2.4 Consolidated statement of changes in equity

2.5. Notes to the consolidated financial statements 3

List of consolidated companies as of December 31, 2023

In the financial statements reported thereafter, please note that figures reported for the year 2023 include 12 months of activity of HELLA (major acquisition of 2022) vs 11 months in 2022.

2.1. Consolidated statement of comprehensive income

^* See Note 1 C.

Other comprehensive income

^* See Note 1 C.

2.2 Consolidated balance sheet

Assets

^* See Note 1 C.

Liabilities

^* See Note 1 C.

^* See Note IC.

^** Cash and cash equivalents at end of 2022 are only restated in consolidated cash flow statement (cf. note 1C).

The net cash flow amounts to €649.1 million as of December 31, 2023 and €483.4 million as of December 31, 2022 restated (cf. chapter 1, note 1.7.1).

2.4 Consolidated statement of changes in equity

⁽¹⁾ Of which 5,091 treasury stock as of 12/31/2023 and 84,171 treasury stock as of 12/31/2022- See Note 9.

⁽²⁾ Of which €524.5 million on January 31, 2022 and €692.3 million on June 24, 2022.

2.5. Notes to the consolidated financial statements

Contents

NOTE 1 Summary of significant accounting policies

NOTE 2 Change in scope of consolidation and recent events

NOTE 3 Post-balance sheet events

NOTE 4 Information by operating segment

NOTE 5 Analysis of operating expenses

NOTE 6 Other non-recurring operating income and expenses

NOTE 7 Finance costs and Other financial income and expenses

NOTE 8 Income tax

NOTE 9 Earnings per share

NOTE 10 Goodwill

NOTE 11 Intangible assets

NOTE 12A Property, plant and equipment

NOTE 12B Right-of-use assets

NOTE 13 Investments in associates

NOTE 14 Other equity interests

NOTE 15 Other non-current financial assets

NOTE 16 Other non-current assets

NOTE 17 Inventories and work-in-progress

NOTE 18 Trade accounts receivables

NOTE 19 Other operating receivables

NOTE 20 Other receivables

NOTE 21 Cash and cash equivalents

NOTE 22 Shareholders' equity

NOTE 23 Minority interests

NOTE 24 Current provisions and contingent liabilities

NOTE 25 Non-current provisions and provisions for pensions and other post-employment benefits

NOTE 26 Net debt

NOTE 27 Trade payables, accrued taxes and payroll costs

NOTE 28 Sundry payables

NOTE 29 Financial instruments

NOTE 30 Hedging of currency and interest rate risks

NOTE 31 Commitments given and contingent liabilities

NOTE 32 Related party transactions

NOTE 33 Management compensation

NOTE 34 Fees paid to the Statutory Auditors

NOTE 35 Dividends

FORVIA comprises the complementary technology and industrial strengths of FORVIA and HELLA, and is the 7th largest global automotive supplier.

FORVIA S.E is a European company which registered office is located at 23-27, avenue des Champs-Pierreux, 92000 Nanterre (Hauts-de-Seine department) in France. The Company is listed on Euronext Paris.

The consolidated financial statements were approved by FORVIA's Board of Directors on February 16, 2024.

The accounts were prepared on a going concern basis.

Note 1 Summary of significant accounting policies

1.A Accounting principles

The consolidated financial statements of the FORVIA group have been prepared in accordance with International Financial Reporting Standards (IFRS) published by the IASB, as adopted by the European Union and available on the European Commission website. These standards include International Financial Reporting Standards and International Accounting Standards (IAS), as well as the related International Financial Reporting Interpretations Committee (IFRIC) interpretations.

The standards used to prepare the 2023 consolidated financial statements and comparative data for 2022 are those published in the Official Journal of the European Union (OJEU) as of December 31, 2023, whose application was mandatory at that date. The new standards, amendments and revisions to the existing standards, whose publication is mandatory from January 1, 2023, have no significant impact on the Group consolidated financial statements.

Concerning the amendments to IAS 12 «International Tax Reform - Pillar 2 Model Rules» published in the OJEU on November 9, 2023, the Group has applied the temporary and mandatory exception related to accounting of deferred tax related to the Pillar 2 income taxes.

The Finance law published in the Official Journal on December 30, 2023 has transposed the European Directive 2022/2023, in order to implement the OECD tax reform ("Pillar 2"). This law is applicable for all accounting periods starting from December 31, 2023 and enforces for all big multinational companies a minimum taxation on income generated in each of the jurisdictions where they are active. The Group has performed the estimation of the potential impacts. In most of the cases, the application of the transitory measures should be possible, generating nil additional income tax. For the countries where these transitory measures can not be applied, no significant impact is expected for the Group.

Moreover, FORVIA has not undertaken any early application of new standards, amendments or interpretations whose application is mandatory after December 31, 2023, irrespective of whether or not they are adopted by the European Union.

The principal accounting policies considered have been applied consistently to all presented periods. Specifically, the operating margin (before amortization of intangible assets acquired) is the FORVIA group's principal performance indicator. It corresponds to net income of the fully consolidated companies before:

The preparation of financial statements in accordance with IFRS requires the use of estimates and assumptions when measuring certain assets, liabilities, income, expenses accounted for in the financial statements as well as for the evaluation of commitments given and contingent liabilities. These estimates and assumptions are primarily used when calculating the impairment of property, plant and equipment, right of use, intangible assets and goodwill, for measuring pension and other employee benefit obligations as well as for lease liabilities and depreciation of deferred tax assets. They are based on historical experience and other factors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates and assumptions. These estimations are revised on a regular basis, notably in the current evolutive macro economic context. Moreover, the Group must exercise judgment in determining whether the criteria for recognizing an asset or group of assets as held for sale are met, pursuant to the provisions of IFRS 5 "Non-Current Assets Held for Sale and Discontinued Operations".

These estimates consider also the Group plans in terms of carbon neutrality as approved by the Science Based Target Initiative (SBTi) in July 2022 and more specifically, achieving by 2025 CO ₂ neutral scopes 1 & 2 and by 2030 reducing green house gas (GHG) emissions by 45% of scope 3, among others by solar energy production on its sites (on site PPA), purchases of renewable energy (off site PPA) and the development of its transversal division for cutting edge sustainable and smart materials launched in July 2021, as well as the review of the group industrial portfolio to climatic risks on the basis on the GIEC scenarii.

The results of the sensitivity tests carried out on the carrying amounts of goodwill and provisions for pensions and other employee benefits are provided in notes 10 and 25.2, respectively. In addition, Note 11 "Intangible Assets" describes the main assumptions used for measuring intangible assets and Note 8.2 the assumptions for recognition of deferred tax assets.

1.B Consolidation principles

Companies over which the Group exercises significant influence and which are at least 20%-owned are consolidated when one or more of the following criteria are met: annual sales of over €20 million, total assets of over €20 million, and debt of over €5 million.

Non-consolidated companies are not material, either individually or in the aggregate.

Subsidiaries controlled by the Group are fully consolidated. Control is presumed to exist when the Group holds more than 50% of a company's voting rights and may also arise as a result of shareholders' agreements.

Subsidiaries are fully consolidated as of the date on which control is transferred to the Group. They are no longer consolidated as of the date that control ceases.

Companies over which the Group exercises significant influence but not control, generally through a shareholding representing between 20% and 50% of the voting rights, are accounted for by the equity method. There is no joint operation in the sense of IFRS 11 within the companies consolidated by equity method.

The FORVIA group's financial statements are presented in euros. Except if specifically specified, amounts are in millions of euros; generally, amounts presented are rounded to the closest unit; consequently, the sum of rounded amounts can present non-significant differences to the reported total. Moreover, ratios and variances reported are computed with the detailed amounts and not with the rounded amounts.

The functional currency of foreign subsidiaries is generally their local currency. The assets and liabilities of these companies are translated into euros at the year-end exchange rate and income statement items are translated at the average exchange rate for the year. The resulting foreign exchange gains and losses are recorded in equity.

Balance sheets and net income of Group entities active in hyperinflation economies are restated to take into account the changes in purchasing power of the local currencies using the official indexes at closing date. They are then translated in euros using the exchange rate of the closing date; without restatement of comparative periods in accordance with IAS 21. This is applied in 2022 and 2023 to Group affiliates in Argentina and in Turkiye.

However certain companies located outside the euro or the US-dollar zone and which carry out the majority of their transactions in euros or US dollars may, however, use euros or US dollars as their functional currency.

All material inter-company transactions are eliminated in consolidation, including inter-company gains.

The accounting policies of subsidiaries and companies accounted for by the equity method are not significantly different from those applied by the Group.

1.C Modifications to the previously published consolidated financial statements

IFRS 5 - DISCONTINUED ACTIVITIES

FORVIA has announced mid February 2023 to have signed with the Motherson group an agreement by which Motherson commits to acquire FORVIA's SAS Cockpit Modules division (assembly and logistics services), reported as part of its Interiors Segment. All the conditions were met from an IFRS point of view to qualify the activity as discontinued, mainly regarding the criteria of being a major line of business and the highly probable character of the sale.

Since January 1, 2023, applying IFRS 5, the corresponding assets and liabilities have been isolated in dedicated lines as the net result of the corresponding discontinued activities and so until July 31, 2023, effective date of the sale of these activities (see Note 2.1).

Due to the effective sale of these activities on July 31, 2023, there are no assets nor liabilities presented in separated lines in the consolidated balance sheet as of December 31, 2023.

The net income, other comprehensive income and cash flows items of discontinued operations are presented separately in the statement of financial position for the year 2023 and all prior periods presented in the financial statements. The comparative balance sheet for the previous year is not restated, as per IFRS5.

Inter-company transactions other than the ones linked to management fees remain eliminated. The classification of management fees for which the sale of the SAS will have no impact has been maintained in operating income. The net impact of this sale is also presented in the net income of discontinued activities.

The restatements of the previously published financial statements for the year 2022 are detailed in the tables below.

RESTATED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

Full-Year 2022

RESTATED CONSOLIDATED CASH FLOW STATEMENT

Full-Year 2022

The net cash flow published in 2022 (€470.8 million) amounts to €483.4 million as of December 31, 2022 after IFRS5 restatement.

Note 2 Change in scope of consolidation and recent events

2.1 Disposal of SAS

On July 31, 2023, FORVIA has finalized the sale to the Motherson group of its SAS Cockpit Modules division (assembly and logistics services), reported as part of its Interiors Segment, for an entreprise value of €540 million.

According to the sale contract, the process of determining potential price adjustments is ongoing; no significant impact is expected on group financial statements. On December 31, 2023, the loss on disposal after tax has been booked in "Net income of discontinued operations".

In accordance with IFRS 10, the gain or loss on disposal of SAS is calculated based on the difference between:

In accordance with IFRS 5, "net income of discontinued operations" presented in the consolidated statement of comprehensive income amounted to €-5.4 million including the operations of the SAS business from January 1, 2023 to July 31, 2023 for total sales of €593.6 million as well as the net loss on disposal related to this activity of €-6.3 million and the directly incrementable expenses related to the sale.

The accounting principles and policies applied to discontinued operations are the same as those applied for annual accounts.

2.2 Other changes in scope in 2023

DISPOSAL OF CVI BUSINESS

FORVIA has finalized the sale of designated parts of FORVIA's commercial vehicle exhaust aftertreatment business in Europe and in the United States, on October 2, 2023, for a total transaction value of €199.2 million, to its longstanding partner Cummins. As part of this transaction, Cummins acquired two plants located in Roermond (Netherlands) and Columbus South (Indiana, USA) as well as their related programs. According to the sale contract, the calculation of prospective price adjustments based on CVI accounts on transaction date is ongoing.

DISENGAGEMENT FROM RUSSIA

Consistently with its early 2023 announcements, FORVIA has concluded its disengagement from Russia, with the sale of its three operating entities (Faurecia Environmental solutions-Russia, Faurecia Automotive Solutions, Faurecia Interior Togliatti) in December 2023, after having obtained the necessary regulatory authorizations from the Russian administration. FORVIA has no operational activities in Russia since end of December 2023.

OTHER CHANGES IN SCOPE

Within Seating perimeter, in China, the company Zhengzhou Faurecia Automotive Parts Co. Ltd has been created and is fully consolidated since April 2023, it is held at 70% by Group, and the company JinHua LEAP Faurecia Automotive Parts Co. Ltd, held at 51%, has been created and is fully consolidated since September 2023. In France, the company SIELEST has been absorbed into the company SIEDOUBS as of January 1, 2023. In Thailand, the company Rayong Faurecia Automotive Parts Co. Ltd held at 70%, has been created and is fully consolidated since November 2023.

For Interiors, in United States, the companies of Detroit Manufacturing Systems' Group held at 49% and consolidated by equity method have been sold in June 2023.

Within Clean Mobility perimeter, companies dedicated to the hydrogen activities have been created in France, in Germany, in China, in South Korea and in United states during the first half year 2023. Following the sale of a part of the group's shares to Stellantis, the company Symbio, consolidated by equity method, is held at 33% since July 2023.

In China, for Lighting segment, the company HELLA Faway Automotive Lighting (Tianjin) Co., Ltd has been created in May 2023. It is held at 39.98% and consolidated by equity method.

For Electronics, in Chino, the company Parrot Automotive Shenzhen, held at 100% and fully consolidated, has been liquidated in June 2023.

In Germany, for the Lifecycle Solutions segment, the company HELLA Pagid GmbH, consolidated by equity method and held at 49%, has been fully acquired on December 31, 2023.

2.3 Reminder of change in scope of consolidation introduced in 2022

FORVIA has completed on January 31, 2022 the acquisition of 79.5% of HELLA, group listed on the Frankfort Stock Exchange, comprising the 60% acquired from the family pool, of which 8.95% were paid through newly issued FORVIA shares and 19.5% as a result of the public tender offer mentioned above. FORVIA also acquired additional shares on the market, representing 2.09% of HELLA shares as of March 18, 2022. As of December 31, 2023, FORVIA holds 81.6% of HELLA shares. FORVIA has an exclusive control on HELLA, which is fully consolidated (including all its significant affiliates) since February 1, 2022.

Within the Seating perimeter, in China the companies Xian Faurecia Automotive Parts Co., Ltd and Changzhou Faurecia Automotive Parts Co., Ltd have been created and are fully consolidated since February 2022; they are held at 70% by the Group. The company Faurecia (Tianjin) Automotive Systems Co., Ltd has been created and is fully consolidated since February 2022; it is held at 100%. The company Faurecia (Changshu) Automotive System Co., Ltd in China, fully consolidated, is being held at 60% since October 2022 vs initially at 55%.

For the Electronics perimeter, in Mexico, the company Hitachi Automotive Systems San Juan Del Rio, S.A. de C.V held at 20% and consolidated in equity method had been sold in June 2022. In China, the company Changchun FAWSN Faurecia Cockpit of Future System Co., Ltd in China, has been acquired in July 2022 at 50% and is fully consolidated and the company Faurecia Clarion (Wuhan) has been created and is fully consolidated since September 2022, it is held at 100%.

Within the Lighting perimeter, the company HBPO Beteiligungsgesellschaft mbH in Germany, consolidated in equity method with a share of 27% since February 2022 following HELLA acquisition has been sold in December 2022.

2.4 Recent events

ECONOMICAL CONTEXT

The worldwide automotive production showed strong dynamics in 2023 with a global production of 90.3 million light vehicles, corresponding to a 9.7% growth year on year. The market was supported by a very robust global demand and the progressive normalization of semi-conductor's supply. The 2023 level exceeded the 89 million LV production reached in 2019 (pre-Covid level), but with a different regional mix ; In 2023, China represented 32% of worldwide LVP (vs. 27% in 2019) and Europe represented 20% (vs. 24% in 2019).

The impact of cost inflation has however persisted during the year 2023. Compared to 2022, which predominantly caused by increase in raw material prices, cost inflation in 2023 mainly related to energy, labor and, to a lesser extent, raw material prices (some of them starting to go down).

Note 3 Post-balance sheet events

No significant post-balance sheet events have occurred.

Note 4 Information by operating segment

The Group is structured into business units based on the nature of the products and services offered:

These business units are managed by the Group on an independent basis in terms of reviewing their individual performance and allocating resources. The tables below show reconciliation between the indicators used to measure the performance of each segment - notably operating income (before amortization of acquired intangible assets) - and the consolidated financial statements. Borrowings, other operating income and expense, financial income and expenses, and taxes are monitored at the Group level and are not allocated to the various segments. A review of the useful life for the fixed assets has been performed in regard to the climate changes and its regulatory consequences as known at the closing date, more specifically for the Clean Mobility segment, and has not enabled to identify any significant impact for the Group.

4.1 Accounting principles

Revenue on parts is recognized when the control is transferred to the customer, incidental to ownership of the modules or parts produced. This generally corresponds to when the goods are shipped.

Revenue on tooling is generally recognized at the transfer of control of these tooling to the customer, usually shortly before serial production starts. Development costs are generally recognized as set up costs for the serial parts production and capitalized, they are then not considered as a revenue distinct from product sales, except specific cases depending on the contract with the customer.

FORVIA operates as an agent for monoliths sales, as well as for some cockpit components, these sales are then recorded at net value in the income statement. These agent flows represented €7,384.7 million in 2023 (€8,325.2 million in 2022 restated IFRS5) ; the counterparts in balance sheet are presented in the lines Contract assets (cf. note 17) and Trade accounts receivables in assets and Trade payables in liabilities.

Operating margin (before amortization of acquired intangible assets) is the FORVIA group's principal performance indicator.

It corresponds to net income of the fully consolidated companies before:

4.2 Key figures by operating segment

Full-Year 2023

Full-Year 2022 restated

4.3 Sales by operating segment

Sales by operating segment break down as follows:

4.4 Sales by major customer

Sales ^* by major customer break down as follows:

^* The presentation of sales invoiced may differ from that of sales by end customer when products are transferred to intermediary assembly companies.

4.5 Key figures by geographic area

Sales are broken down by destination region. Other items are presented by the region where the companies involved operate:

2023

2022 restated

Note 5 Analysis of operating expenses

5.1 Analysis of operating expenses by function

5.2 Analysis of operating expenses by nature

5.3 Personnel costs

Details of expenses relating to the Group's free shares plans and pension costs are provided in Notes 22.2 and 25, respectively.

5.4 Research and development costs

Development costs are usually capitalized in intangible assets as they are considered as set up costs for the serial parts production, and then amortized to match the quantities of parts delivered to the customer, over a period not exceeding five years except under exceptional circumstances. For some specific contracts where the developments works are a separate performance obligation under IFRS 15 the corresponding costs comply with the definition of work in progress and are capitalized in inventory. These inventories are then expensed (cost of sales) when the corresponding revenue is recognized.

The development costs recognized in the cost of soles (stock decrease and R&D assets depreciation) amount to €924.4 million as of December 31,2023, vs €877.8 million as of December 31, 2022 restated.

5.5 Depreciation, amortization and provisions for impairment in value of non-current assets

This table does not include allowances and reversals of provision for non-recurring items.

Note 6 Other non-recurring operating income and expenses

Other non-recurring operating income and expenses are analyzed as follows:

OTHER NON-RECURRING OPERATING INCOME

OTHER NON-RECURRING OPERATING EXPENSES

⁽¹⁾ As of December 31, 2023, this item includes restructuring costs in the amount of €(171.5) million and reversal of provisions for impairment in value of assets in the amount of €0.7 million versus €(205.1) million and €(144.1) million as of December 31, 2022 restated.
⁽²⁾ Of which €(43.0) million of costs linked to the acquisition and integration of HELLA as of December 31, 2022.
⁽³⁾ Russia : €28.9 million of reversal of provision linked to the reduction of Russia activities of which €25.1 million of reversal of provision for reorganization and €3.8 million of income in others as of December 31, 2023 versus €(130.3) million as of December 31, 2022 of which €(103.9) million of reorganization expenses and €(26.4) million of others.

RESTRUCTURING

Reorganization costs (€170.8 million) include redundancy and site relocation payments for 2,796 people.

Note 7 Finance costs and Other financial income and expenses

7.1 Finance costs

7.2 Other financial income and expenses

^(I) This item includes amortization of costs related to long-term debts and commissions for non-use of the credit facility.
⁽²⁾ Of which €(34.3) million in 2022 of financial costs linked to the acquisition of HELLA.
⁽³⁾ Of which €158.0 million of gain on sale (mainly shares of Symbio and CVI activity - cf. note 2.2) and €( 13.6) million for the variance of the fair value of the off-site VPPA contracts in 2023 - cf. Note 26.

Note 8 Income tax

Deferred taxes are recognized using the liability method for temporary differences arising between the tax bases for assets and liabilities and their carrying amounts on the consolidated financial statements. Temporary differences mainly arise from tax loss carryforwards and consolidation adjustments to subsidiaries' accounts.

Deferred taxes are measured using tax rates (and laws) that have been enacted or substantially enacted at the balance sheet date.

Deferred income tax assets are recognized only to the extent that it is probable that future taxable profit will be available in the short or medium term against which the temporary differences or the loss carry forward can be utilized, based on the Group's strategic plan.

Deferred tax liabilities are accounted for every taxable temporary differences in relation with investment in subsidiaries, joint ventures and associates unless the Group has the capacity to control the timing of the reversal of temporary differences and if it is probable that they will not be reversed in a predictable future.

In compliance with IFRIC 23, accruals for risk on income tax are part of the income tax within the statement of comprehensive income and of income tax payables within the balance sheet (Note 28).

Corporate income tax can be analyzed as follows:

8.1 Analysis of the tax charge

Corporate income tax can be analyzed as follows:

^* The impact of local rate differences mainly relates to Chinese and German entities.
^** Mainly due to withholding tax in 2022.

8.2 Analysis of tax assets and liabilities

The Group considers the recovery of the deferred tax net balance as at December 31, 2023, i.e. €525.1 million, as probable.

Changes in deferred taxes recorded on the balance sheet break down as follows:

^* Mainly related to actuarial gains and losses directly recognized in equity.

8.3 Deferred tax assets and liabilities by nature

The variation of the net deferred tax on intangible assets includes the deferred tax effect of the amortization of intangible assets acquired in business combinations.

8.4 Impairment of tax asset carryforwards

The ageing of impaired tax asset carryforward is detailed as follows:

These impaired deferred income tax assets on loss carry forwards are mainly located in France.

Note 9 Earnings per share

Basic earnings per share are calculated by dividing net income attributable to owners of the parent by the weighted average number of shares outstanding during the year, excluding treasury stock. For the purpose of calculating diluted earnings per share, the Group adjusts net income attributable to owners of the parent and the weighted average number of shares outstanding for the effects of all dilutive potential ordinary shares (including stock options, free shares and convertible bonds).

⁽¹⁾ Changes in the number of shares outstanding as of December 31, 2023, are analyzed as follows:

The dilutive impact of the bonds was calculated using the treasury stock method.

In relation to stock options, this method consists of comparing the number of shares that would have been issued if all outstanding stock options had been exercised to the number of shares that could have been acquired at fair value.

The potentially dilutive impact of free shares is taken into account considering the number of shares to be distributed for the plans of which the realization of the performance conditions has already been stated by the Board.

Earnings per share

Earnings per share break down as follows:

Note 10 Goodwill

In case of a business combination, the aggregate value of the acquisition is allocated to the identifiable assets acquired and liabilities assumed based on their fair value determined at their acquisition date.

A goodwill is recognized when the aggregate of the consideration transferred and the amount of any non-controlling interest in the acquiree exceed the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. In accordance with IAS 36, goodwill is not amortized but is tested for impairment at least once a year and more often if there is an indication that it may be impaired. For the purpose of impairment testing, goodwill is allocated to cash-generating units (CGUs). A CGU is defined as the smallest identifiable group of assets that generates cash inflows that are largely independent of the cash inflows from other assets or groups of assets.

The CGU to which goodwill is allocated represents the level within the operating segment at which goodwill is monitored for internal management purposes. The Group has identified the following CGUs:

The carrying amount of assets and liabilities thus grouped is compared to the higher of its market value and value in use, which is equal to the present value of the net future cash flows expected, and their net market value including costs of disposal.

Breakdown of the net amount of goodwill by operating segment:

Cash-generating units and impairment tests

Impairment tests are carried out whenever there is an indication that an asset may be impaired. Impairment testing consists of comparing the carrying amount of an asset, or group of assets, with the higher of its market value and value in use. Value in use is defined as the present value of the net future cash flows expected to be derived from an asset or group of assets.

The assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash-generating units, or CGUs).

Impairment tests are performed on each group of intangible assets (development costs) and property, plant and equipment attributable to a customer contract. This is done by comparing the aggregate carrying amount of the Group of assets concerned with the present value of the expected net future cash flows to be derived from the contract.

An impairment loss is recorded when the assets' carrying amount is higher than the present value of the expected net future cash flows. A provision is then recorded for losses to completion on loss-making contracts in compliance with IAS 37.

In case of a triggering event, impairment testing is also carried out on general and corporate assets grouped primarily by type of product and geographic area.

The cash inflows generated by the assets allocated to these CGUs are largely interdependent due to the high overlap among various manufacturing flows, optimization of capacity utilization, and centralization of research and development activities.

Manufacturing assets whose closure is planned are tested independently for impairment.

Within the frame of the impairment tests of goodwill and group of CGUs, the cash flow forecasts used to calculate value in use were based on the Group's 2024-2028 forecasts which were drafted in the second semester of 2023. The volume assumptions used in the strategic plan are based on worldwide automotive market assumptions of 88 million of cars in 2024, 88 million in 2025 and 93 million in 2028, based themselves on external information sources. The impacts of group commitment on carbon neutrality as well as the consequences of governmental policies linked to the global warming are as well part of the assumptions used for these forecasts.

The main assumption affecting value in use is the level of operating income used to calculate future cash flows and particularly the terminal value. The operating margin assumption for 2028 remains above 8% of sales for the Group as a whole.

Projected cash flows for the last year (2028) have been projected to infinity by applying a growth rate determined based on analysts' trend forecasts for the automotive market. The growth rate applied for the 2023 test was 1.4% (1.4% applied at the end of 2022), except for Electronics for which 2% has been considered given the specific development of this segment (2% applied at the end of 2022).

FORVIA called on an independent expert to update the weighted average cost of capital used to discount future cash flows. The market parameters used in the expert's calculation are based on a sample of companies operating in the automotive supplier sector. Taking into account these parameters and a market risk premium of 6.5% on average, the weighted cost of capital used to discount future cash flows was set at 10.6% (on the basis of a range of values provided by the independent expert) in 2023 (10.5% in 2022). This rate was applied for the impairment tests carried out on all of the groups of CGUs, as they all bear the same specific risks relating to the automotive supplier sector and the CGUs multinational operation does not justify using geographically different discount rates.

The tests performed as of December 31,2023 did not show any indication of impairment in goodwill.

The table below shows the sensitivity of the impairment test results to changes in the assumptions used as of December 31, 2023 to determine the value in use of the CGUs groups to which the Group's goodwill is allocated:

Note 11 Intangible assets

A. Research and development expenditure

The FORVIA group incurs certain development costs in connection with producing and delivering modules for specific customer orders which are considered as set up costs for the serial parts production and capitalized. In accordance with IAS 38, these development costs are recorded as an intangible asset where the Company concerned can demonstrate:

These capitalized costs are amortized to match the quantities of parts delivered to the customer, over a period not exceeding five years except under exceptional circumstances.

Research costs, and development costs that do not meet the above criteria, are expensed as incurred.

B. Other intangible assets

Other intangible assets include development and purchase costs relating to software used within the Group - which are amortized on a straight-line basis over a period of between one and three years - as well as patents and licenses.

It also includes the intangible assets acquired in business combinations (customer relationship, trademarks, technologies...); these assets are amortized on the corresponding contracts duration, i.e. between 5 and 20 years for trademarks, between 6 and 16 years for customer relationship and between 6 and 12 years for technologies.

Intangible assets break down as follows:

The book value of development costs allocated to a customer contract as well as the associated specific tooling is compared to the present value of the expected net future cash flows to be derived from the contract based on the best possible estimate of future sales. The volumes taken into account in FORVIA's Business Plans are the best estimates by the Group's Marketing department based on automakers' forecasts when available.

Note 12A Property, plant and equipment

Property, plant and equipment are stated at acquisition cost, or production cost in the case of assets produced by the Group for its own use, less accumulated depreciation.

Maintenance and repair costs are expensed as incurred, except when they increase productivity or prolong the useful life of an asset, in which case they are capitalized.

In accordance with the amended version of IAS 23, borrowing costs on qualifying assets arising subsequent to January 1, 2009 are included in the cost of the assets concerned. The amount is not significant for the period.

Property, plant and equipment are depreciated by the straight-line method over the estimated useful lives of the assets, as follows:

^* For leased buildings, leasehold improvements are depreciated over the same duration than the corresponding Right-of-Use asset.

Investment grants are recorded as a deduction from the assets that they were used to finance.

Property, plant and equipment are often dedicated to client programs.

Note 12B Right-of-use assets

Lease contracts are accounted for in the balance sheet, through an asset (representing the right to use the leased asset along the contract duration) and a liability (representing the lease future payments obligation), considering the main following principles:

Variable lease contracts: contracts corresponding to the qualification of lease contracts, for which all payments are variable payments, leading to no recognition of right-of-use assets and financial debt, have been signed for the lease of solar panel producing electricity (on site PPA) in plants of the Group. As at December 31, 2023, 43 contracts were effectively signed, mainly for a duration of 20 years, out of which 5 were already in operation.

Note 13 Investments in associates

Investment in associates for continued operations:

As of December 31, 2023

^* As the Group share of some company's net equity is negative, it is recorded under liabilities as a provision for contingencies and charges.

There is no joint operation in the sense of IFRS 11 within the companies consolidated by equity method.

Change in investments in associates

Note 14 Other equity interests

Equity interests correspond to the Group's interests in the capital of non-consolidated companies. They are subject to impairment testing based on the most appropriate financial analysis criteria. An impairment loss is recognized when appropriate. The criteria generally applied are the Group's equity in the underlying net assets and the earnings outlook of the company concerned.

Note 15 Other non-current financial assets

Loans and other financial assets are initially stated at fair value and then at amortized cost, calculated using the effective interest method.

Provisions are booked on a case-by-case basis where there is a risk of non-recovery.

Note 16 Other non-current assets

This item includes:

Note 17 Inventories and work-in-progress

Inventories of raw materials and supplies are stated at cost, determined by the FIFO method (First-In, First-Out).

Finished and semi-finished products, as well as work-in-progress, are stated at production cost, determined by the FIFO method. Production cost includes the cost of materials and supplies as well as direct and indirect production costs, excluding overhead not linked to production and borrowing costs.

Work-in-progress includes the costs of specific tooling produced or purchased specifically for the purpose of manufacturing parts or modules for customer orders and which are sold to the customer, i.e. for which the control is transferred to the customer, usually shortly before serial production starts, and specific development work which is sold to customers and corresponding to the definition of work in progress when the contract enables to consider that these developments are a specific performance obligation under IFRS 15. These costs are expensed (cost of sales) over the period in which the corresponding revenue is recognized, i.e. at transfer of control of these development works to the customer.

Inventories of products for which the Group is considered as agent are presented as contract assets and not in inventories.

Provisions are booked for inventories for which the probable realizable value is lower than cost and for slow moving items.

Note 18 Trade accounts receivables

Under trade receivables sale programs, the Group can sell a portion of the receivables of a number of its French, German, North America and other subsidiaries to a group of financial institutions, transferring substantially all of the risks and rewards relating to the receivables sold to the financial institutions concerned.

The following table shows the amount of receivables sold with maturities beyond December 31, 2023, for which substantially all the risks and rewards have been transferred, and which have therefore been derecognized, as well as the financing under these programs:

Individually impaired trade receivables are as follows:

Given the high quality of Group counterparties, late payments do not represent a material risk. They generally arise from administrative issues.

Late payments as of December 31, 2023 were €213.4 million, breaking down as follows:

Note 19 Other operating receivables

Note 20 Other receivables

In 2023, the receivables on France Credit d'Impot Recherche (CIR) have been sold for an amount of €43.7 million vs €41.9 million in 2022.

Note 21 Cash and cash equivalents

Cash and cash equivalents include current account balances in the amount of €3,130.6 million (compared to €3,747.5 million in 2022) and short-term investments in the amount of €1,143.3 million (compared to €453.6 million in 2022), for a total of €4,273.9 million as of December 31, 2023 (€4,201.1 million as of December 31, 2022).

These components include cash at bank, current account balances, marketable securities such as money market and short-term money market funds, deposit and very short-term risk-free securities that are readily sold or converted into cash. Cash equivalents are investments held for the purpose of meeting short term cash commitments and are subject to an insignificant risk of change in value.

They are measured at fair value and variances are booked through P&L.

Note 22 Shareholders' equity

22.1 Capital

As of December 31, 2023, FORVIA capital stock totaled €1,379,625,380 divided into 197,089,340 fully paid-up shares with a par value of €7 each.

The Group's capital is not subject to any external restrictions. Double voting rights are granted to all shares for which a nominative registration can be confirmed, for at least two years in the name of the same shareholder.

22.2 Share-based payment

FREE SHARE GRANT

In 2010, FORVIA implemented a share grant plan for executives of Group companies. These shares are subject to service and performance conditions.

In 2021, FORVIA has implemented a unique long term share grant plan (Executive Super Performance Initiative-ESPI) for the members of the Group Executive Committee, executives of Group companies. The acquisition period is five years without conservation condition, and the maximum amount is limited to 300% of the yearly fixed wages. These shares are subject to a service and a performance condition, the Total Shareholder Return - TSR, compared to a peer group.

Free shares are measured at fair value by reference to the market price of FORVIA's shares at the grant date, less an amount corresponding to the expected dividends due on the shares but not paid during the vesting period and an amount reflecting the cost of the shares being subject to a lock-up period. For the ESPI plan, the fair value of the shares includes also an assumption for the achievement of the external performance condition which is frozen at grant date. The fair value is recognized in payroll costs on a straight-line basis over the vesting period, with a corresponding adjustment to equity.

Details of the share grant plans as of December 31, 2023 are set out in the table below:

^* Net of free shares granted cancelled.

The shares corresponding to the plan attributed by the Board of October 9, 2019 (72,002), has been distributed in October 2023. The performance conditions for the plan attributed by the Board of October 22, 2020 have been partially met, the corresponding shares (521,273) will be distributed in October 2024.

OTHER PLANS

Furthermore, a long-term variable remuneration (long-term incentive, LTI) has been implemented for HELLA Management Board before HELLA acquisition by FORVIA. This long term incentive is paid in cash. The performance criteria are based on the return on invested capital (RolC), the income before tax as well as the performance of the HELLA share (total shareholder return). The LTI base amount is determined for the first fiscal year in the calculation period, as a fixed percentage of the annual fixed salary depending on the RolC; the long term variable remuneration is based on a calculation period of five fiscal years and payment is made once the calculation period comprising a total of five fiscal years has come to an end. For example, the LTI allocated for the fiscal year 2020/2021 will be paid out at the end of the fiscal year 2024. As these LTI are share-based, their value is recognized according to IFRS 2. However, the LTI allocated for fiscal year 2023 do not include the performance of the HELLA share as a performance criteria and their calculation period comprises only a total of four fiscal years.

There are currently five plans on going with the following valuation:

The amount recognized for the period for all these plans is an expense of €16.4 million, compared to €16.4 million in the year 2022.

22.3 Treasury stock

As of December 31, 2023, FORVIA held 5,091 treasury stock shares.

The cost of the shares held in treasury stock as of December 31, 2023 totaled €0.2 million, representing an average cost of €35.13 per share.

Note 23 Minority interests

This item corresponds to minority shareholders' interests in the equity of consolidated subsidiaries.

Changes in minority interests were as follows:

The minority interests, taken individually, are not considered as significant in comparison to the total net equity.

Note 24 Current provisions and contingent liabilities

24.1 Current provisions

A provision is recorded when Group Executive Management has decided to streamline the organization structure and announced the program to the employees affected by it or their representatives, when relevant.

Changes in these provisions during 2023 were as follows:

^* Surplus provisions.

24.2 Contingent liabilities

LITIGATION

There are no other claims or litigation in progress or pending that are likely to have a material impact on the Group's consolidated financial position.

Note 25 Non-current provisions and provisions for pensions and other post-employment benefits

25.1 Non-current provisions

CHANGES IN NON-CURRENT PROVISIONS

25.2 Provisions for pensions and other post-employment benefits

Group employees may receive, in addition to their pensions in conformity with the applicable regulations in the countries where the Group companies employing them are located, additional benefits or post-retirement benefit obligations. The Group offers these benefits through either defined benefits or defined contribution plans. The valuation and accounting methodologies followed by the Group are the following:

The valuation takes into account the probability of employees staying with the Group up to retirement age and expected future salary levels as well as other economic assumptions (such as the inflation rate, the discount rate) for each concerned zone or country. It takes now also into account the 2021 IFRS IC decision on attributing benefit to periods of services. These assumptions are described in Note 25.2.

Benefit obligations are partially funded by contributions to external funds. In cases where the funds are permanently allocated to the benefit plan concerned, their value is deducted from the related liability. An excess of plan assets is only recognized in the balance sheet when it represents future benefits effectively available for the Group.

Periodic pension and other employee benefit costs are recognized as operating expenses over the benefit vesting period.

Actuarial gains and losses on defined benefits plan are recognized in other comprehensive income.

In case of a change in regime, past service costs are fully recognized as operating expenses, the benefits being fully acquired or not.

The expected rate of return of defined benefits plan assets is equal to the discount rate used to value the obligation at the opening of the period. This return is recorded in "Other financial income and expense".

The other long-term benefits (during employment period) mainly cover seniority bonuses as well as long-service awards. The obligation is valued using similar methodology, assumptions and frequency as the ones used for post-employment benefits.

BENEFIT OBLIGATIONS

⁽¹⁾ External funds mainly cover pension plan benefit obligations for €296.5 million in 2023.
⁽²⁾ Pension plan surpluses are included in "Other non-current assets".

PENSION BENEFIT OBLIGATIONS

A - Description of the plans

In France, all managerial employees with a salary in tranche C are granted a defined benefit pension scheme, for which the rights acquired as of December 31, 2019 have been frozen, in order to comply with the PACTE law from May 22, 2019 . Executive Committee members who have an employment contract with FORVIA S.E. or any of its subsidiaries also benefit from a defined benefit pension scheme for French members and defined contribution pension scheme for foreign members, the rights acquired as of December 31, 2019 in the defined benefit pension scheme for French members have also been frozen, in order to comply with the PACTE law from May 22, 2019. The rights are reestimated based on the evolution of the salary and respective expenses of the employees part of the pension scheme.

Moreover, in France, following the pension reform published on April 14, 2023, the retirement age has been postponed by two years. The impact of this reform is not material.

In the United States, the two remaining plans, already closed to new participants, were combined as of January 1, 2020. The combined pension plan covers 784 participants.

In Germany, the main defined benefit pension plan still open covers 5,192 participants. The benefit granted is based on the number of years of service, starting after 14 years. The main defined benefit pension plan closed to new participants covers 7,949 participants.

In Japan, the main defined benefit plan covers 699 participants. Benefits are based on years of service and paid at the end of the contract or upon reaching the age of 60.

B - Assumptions used

The Group's obligations under these plans are determined on an actuarial basis, using the following assumptions:

The main actuarial assumptions used in the past two years to measure the pension liability are as follows:

Nota: The discount rate for the euro zone was determined on the basis of yields on prime corporate bonds for a maturity corresponding to the duration of the obligations. Prime corporate bonds are defined as bonds awarded one of the top two ratings by a recognized rating agency (for example, bonds rated AA or AAA by Moody's or Standard & Poor's).

In the United States, the pension benefit obligations are not sensitive to the inflation rate.

The average duration of the various plans is as follows:

C - Information on external funds

External funds are invested as follows:

The fair value of shares and bonds falls in the level 1 category (price quoted in active markets) in 2023.

D - Provisions for pension liabilities recognized on the balance sheet

^* The provision for €417.1 million as of December 31, 2023 relates mainly to Germany (€345.6 million).

E - Changes in pension liabilities

In France, retirement commitments increased by €7.8 million at the closing compared to that of the previous year as detailed below:

These costs are recognized:

The actuarial gains and losses generated have been recorded in "Other comprehensive income" according to IAS 19R. It can be analyzed as follows:

F - Retirement pension liabilities: sensitivity to changes in the discount rate and in the inflation rate in the main scope

The impact of a 25 basis point increase in the discount rate and in the inflation rate for the projected benefit obligation is as follows:

25.3 Long-service awards

The Group evaluates its liability for the payment of long-service awards, given to employees based on certain seniority requirements. The Group calculates its liability for the payment of long-service awards using the same method and assumptions as for its pension liability. Provisions for long-service awards have been set aside as follows: