NOTE 4. Other operational income and expenses
Accounting principles
Other income and expenses
The Other income and expenses item includes capital gains and losses on disposals of tangible and intangible assets, impairment of assets, restructuring costs, and clearly identified, non-recurring income and expense items that are material to the consolidated financial statements.
The cost of restructuring operations is fully provisioned if it results from a group obligation towards a third party originating from a decision taken by a competent body which is announced to the third parties concerned before the end of the reporting period. This cost consists mainly of severance payments, early retirement payments, the cost of unworked notice periods, the costs of training for employees affected by the restructuring measures, and other costs relating to site closures. Any write-offs of fixed assets or impairment charged against inventories and other assets related directly to these restructuring measures are also recorded as restructuring costs.
Operational profit
Operational profit is calculated based on operating profit and includes other income and expenses such as capital gains and losses on disposals of tangible and intangible assets, impairment of assets, and restructuring costs.
This item breaks down as follows:
| € millions |
2021 |
2020 |
2019 |
| Capital gains and losses on disposals of tangible and intangible assets(1) |
Capital gains and losses on disposals of tangible and intangible assets (1)2021 -0.4 |
Capital gains and losses on disposals of tangible and intangible assets (1)2020 -3.5 |
Capital gains and losses on disposals of tangible and intangible assets (1)2019 14.0 |
| Impairment of tangible and intangible assets(2) |
Impairment of tangible and intangible assets (2)2021 -337.5 |
Impairment of tangible and intangible assets (2)2020 -89.8 |
Impairment of tangible and intangible assets (2)2019 -142.8 |
| Restructuring costs(3) |
Restructuring costs (3)2021 -149.6 |
Restructuring costs (3)2020 -382.1 |
Restructuring costs (3)2019 -120.2 |
| Other(4) |
Other (4)2021 55.5 |
Other (4)2020 -233.5 |
Other (4)2019 -187.5 |
| TOTAL |
TOTAL 2021 -432.0 |
TOTAL 2020 -709.0 |
TOTAL 2019 -436.5 |
(1) Including:
- - in 2020, mainly the capital loss of -€2.7 million on the disposal of Roger & Gallet (after recognition of a €62 million impairment on intangible assets at 31 December 2019);
- - in 2019, €11 million in capital gains on property sales in Germany.
(2) Including:
- - in 2021, the goodwill of IT Cosmetics (-€254,7 million) and the brand Magic (-€82,8 million);
- - in 2020, the residual brand and goodwill of Clarisonic for €63.6 million and €24.6 million respectively, due to the brand’s discontinuation;
- - in 2019, the brand and goodwill of Clarisonic and Roger & Gallet for €80 million and €59 million, respectively.
(3) Including:
- - in 2021, the ongoing restructuring of the organisation and distribution of the Luxe and Professional Divisions in Europe (€60.8 million), the reorganisation of the Consumer Products Division’s sales forces in North Asia (€29 million), the restructuring of an industrial activity in Eastern Europe (€10 million), the restructuring of production in Germany (€18.2 million) and the reorganisation of Urban Decay’s distribution structures in 17 countries (€9.2 million);
- - in 2020, the reorganisation of the distribution structures of the Luxe Division in North America (€96.3 million) and in Asia-Pacific (€27.2 million), the repositioning of certain distribution channels in China (€27.8 million), the reorganisation of organizational and distribution structures within the Luxe and Professional Divisions in Western Europe (€85.9 million), the continued redesign of NYX Professional Makeup’s distribution channels (€66.3 million), the repositioning of the Decléor Carita brands and their sales strategy (€22.5 million), as well as the operational impact of the discontinuation of the Clarisonic brand (€18.9 million);
- - in 2019, the redesign of NYX Professional Makeup’s distribution channels (€76 million), the refocus of production facilities on Luxe, mostly in France (€11 million), restructuring Clarisonic manufacturing in the US (€8.6 million), reorganising distribution, organisational and accounting structures in Europe (€9 million) and additional costs for various reorganisation projects in 2018, primarily in Brazil (€8.2 million).
(4) Including:
- - in 2021, the reversal of a provision for disputes related to intellectual property (€45.6 million), the write-down of Earn-out Style Nanda and Atelier Cologne earn-out debts (€44.2 million), partially offset by charitable donations (€16 million) and acquisition costs (€14.3 million);
- - in 2020, certain specific and identifiable costs relating to the consequences of the public health crisis borne during the first half of the year including €27 million in additional health costs (additional hygiene measures, protective measures for employees, thermal cameras, etc.) and the costs incurred by a total and sudden suspension of activity over clearly defined lockdown periods imposed by local authorities. These include €43 million relating to own points of sales (mainly the salaries of beauty advisers and costs relating to the amortisation of store rights-of-use net of any subsidies received from lessors) and €70 million mainly corresponding to the salaries of the Professional Products Division’s sales force, the Luxe Division's beauty advisers in Department stores and the Medical Doctors’ sales forces which were prohibited from visiting the United States. Acquisition-related costs (€24 million) and disputes related to intellectual property (€20 million);
- - in 2019, acquisition-related costs (€6.1 million), the increase of the Stylenanda earn-out (€56.5 million), the disputes related to intellectual property (€55.8 million) and the profit-sharing adjustment following the agreement signed with the French tax administration for the 2014-2018 tax audits (€56.7 million).
