32. Segment Reporting
The Group distinguishes between business segments (primary reporting format) and geographical segments (secondary reporting format). These reporting formats take into account the differing risks and earning potential of the Group and reflect internal reporting (the management approach). The information provided in the following is based on the same accounting policies as are used for the Financial Statements.
Primary Segment Reporting Format (Business Segments)
The Group consists of three reportable segments based on type of product and service: Industrial Cranes, Port Technology and Services. The Industrial Cranes segment integrates the development, production, sale, assembly and delivery of Industrial Cranes, including components and material handling solutions. Activities of the Port Technology segment consist of developing, manufacturing, selling, assembling, delivering and maintaining Mobile Harbour Cranes and automated container handling systems, including the provision of storage and integrated software solutions. The Services segment comprises Industrial Cranes field service activities such as inspection, maintenance, repairs and the refurbishment of used cranes, and the sale of spare parts.
The first part of the segment information provides in summary form the disclosures for each segment (revenue, earnings before interest and tax, depreciation, amortisation and impairments, segment assets, segment liabilities and segment capital expenditure). The reported amounts represent the portion of Group amounts that can be directly attributed to segments or can be allocated to them on a reasonable basis.
The table below presents information for the primary reporting format:
In the interests of greater transparency, Demag Cranes AG has restated the presentation of central holding company costs for financial year 2007/2008 to match the financial reporting through all quarters of financial 2008/2009. The restatement affected earnings before interest and tax (EBIT) and depreciation, amortisation and impairments. Demag Cranes AG has also modified the allocation of segment assets. The presentation changes have no effect on net income after tax or earnings per share.
Restructuring expenses/one-off effects are included in Income Statement items as follows:
|
1 October to 30 September |
|
|
in EUR thousand |
2008/2009 |
|
Cost of sales |
22,617 |
|
Selling, general and administrative expenses |
19,087 |
|
Research and development expenses |
6,874 |
|
Other operating expenses |
522 |
|
Total |
49,100 |
These mainly consist of costs of severance packages, costs of interim employment companies, impairments of non-current assets, consulting costs and onerous contracts. Restructuring expenses accounted for payments totalling EUR 7,520,000 as at the balance sheet date.
The main non-cash expenses other than depreciation and amortisation in the financial year related to restructuring in the amount of EUR 33,270,000. The main non-cash expenses in the previous year amounted to EUR 10,730,000.
The severance expenses relate to the departure of the former CEO.
There was no material inter-segment revenue in financial year 2008/2009 or 2007/2008.
The segment assets and segment liabilities do not include any effects relating to financing or to current or deferred tax. The effects of pensions are only included to the extent they are directly attributable to segments.
Secondary Segment Reporting Format (Geographical Segments)
The table below provides information on geographical segments comprising the Group’s secondary segment reporting format:
