Other operating expenses include all external expenses other than production and media buying when the Group acts as an agent. This includes pass-through costs amounting to EUR 1,097 million in 2018, versus euro 877 million in 2018; it also includes taxes other than income taxes and increases and reversals of provisions. This line item also includes euro 40 million in Epsilon acquisition costs.
| (in millions of euros) | 2019 | 2018 |
|---|---|---|
(in millions of euros) Amortization of other intangible assets (excluding intangibles arising from acquisitions) |
2019 (39) |
2018 (22) |
(in millions of euros) Depreciation of property, plant and equipment |
2019 (143) |
2018 (125) |
(in millions of euros) Amortization of right-of-use assets |
2019 (404) |
2018 (379) |
(in millions of euros) Depreciation and amortization expense (excluding intangibles arising from acquisitions) |
2019 (586) |
2018 (526) |
(in millions of euros) Amortization of intangibles from acquisitions |
2019 (204) |
2018 (69) |
(in millions of euros) Impairment loss on right-of-use assets |
2019 (127) |
2018 (114) |
(in millions of euros) Impairment loss on intangible assets and intangibles arising from acquisitions |
2019 (42) |
2018 - |
(in millions of euros) Impairment loss on investments in associates |
2019 (25) |
2018 - |
(in millions of euros) Impairment losses on assets held for sale |
2019 (15) |
2018 (14) |
(in millions of euros) Impairment losses on property, plant and equipment |
2019 - |
2018 (3) |
(in millions of euros) Impairment losses |
2019 (209) |
2018 (131) |
(in millions of euros) Total depreciation, amortization and impairment |
2019 (999) |
2018 (726) |
Amortization of intangibles arising from acquisitions
As part of its strategic development, Publicis Groupe launched the country model in 2017 to bring together all Group expertise under one roof and provide clients with a single offering. This model was extended to all territories in which the Group
operates and has been fully operational from January 1, 2020. As a result, the pertinence of the assumption retained, in which brands have indefinite lives, has been reassessed.
This review has led to the use of a finite useful life instead of the indefinite useful life applied previously. From July 1, 2019, brands are amortized over a period of eight years, corresponding to their estimated term of use. The brand amortization expense was euro 83 million for fiscal year 2019, including a euro 33 million accelerated amortization expense recognized following an impairment test to bring carrying amounts into line with recoverable amounts. The amortization expense for Epsilon intangible assets was euro 66 million. Other acquisition-related intangible assets with a finite useful life were also amortized for euro 55 million.
Impairment losses on right-of-use assets
In early 2018, the Group launched a program to optimize premises aiming to group agencies at one or more sites in the main countries. This program required vacating leased spaces, to best use the existing space at other sites, and consequently right-of-use
assets concerning the empty spaces were subject to total or partial impairment losses, and likewise concerning the fixtures in these spaces. Euro 127 million in impairment losses were recognized in 2019 (euro 95 million net of tax), including
euro 56 million for right-of-use assets and euro 15 million for fixtures.
Expenses such as lease expenses and any taxes on vacant properties in the amount of euro 56 million are included in property provisions; they also include early departure penalties. Impairment losses in 2018 reached euro 114 million, of which euro 30 million for right-of-use assets and euro 28 million for fixtures. Expenses such as lease expenses and any taxes on vacant properties in the amount of euro 56 million are included in vacant property provisions; they also include early departure penalties.
