AB Electrolux (publ) – Annual report – 31 December 2017
Note 3 Segment information
Reportable segments – Business areas
The Group’s operations are divided into six reportable segments based on differences in products: Major Appliances Europe, Middle East and Africa; Major Appliances North America; Major Appliances Latin America; Major Appliances Asia/Pacific; Home Care & SDA and Professional Products.
As of 2017, segment Small Appliances has changed name to Home Care & Small Domestic Appliances (SDA), and the segment now has global responsibility to develop offerings around “Healthy wellbeing within your home” and grow the Groups presence in floor care, air care and water care.
The Major Appliances business areas are geographically defined, while the Home Care & SDA and Professional Products business areas are global. The segments are regularly reviewed by the President and CEO, the Group’s chief operating decision maker.
Major Appliances and Home Care & SDA are producing appliances for the consumer market. Products within Major Appliances comprise mainly of refrigerators, freezers, cookers, dryers, washing machines, dishwashers and microwave ovens. Home Care & SDA include vacuum cleaners and other small appliances.
Professional Products consists of two operating segments, food-service equipment and laundry solutions for professional users, which are aggregated into one reportable segment in accordance with the aggregation criteria. Aggregation is done due to the similarities of products and services provided to professional users, similar production processes designed to make products which can endure very demanding use, and resemblance in sales and distribution channels.
The segments are responsible for the operating results and the net assets used in their businesses, whereas financial items and taxes, as well as net borrowings and equity, are not reported per segment. The operating results and net assets of the segments are consolidated using the same principles as for the total Group. The segments consist of separate legal units as well as divisions in multi-segment legal units where some allocations of costs and net assets are made. Operating costs not included in the segments are shown under Common Group costs, which mainly are costs related to group management activities typically required to run the Electrolux Group.
Sales between segments are made on market conditions with arm’s-length principles.
Inter-segment sales exist with the following split:
The segments are responsible for the management of the operational assets and their performance is measured at the same level, while the financing is managed by Group Treasury at group or country level. Consequently, liquid funds, interest-bearing receivables, interest-bearing liabilities and equity are not allocated to the business segments.
Tangible and non-tangible fixed assets located in the Group’s country of domicile, Sweden, amounted to SEK 1,888m (1,457). Tangible and non-tangible fixed assets located in all other countries amounted to SEK 28,673m (25,123). Individually, material countries in this aspect are Italy with SEK 3,219m (2,980), USA with SEK 7,474m (5,838) and Poland with SEK 2,347m (2,104), respectively.
No single customer to the Group has 10% or more of the external revenue.