Consolidated Financial Statements >
CONSOLIDATED FINANCIAL STATEMENTS AND EXPLANATORY NOTES
196
| 2012 annual report prysmian group
The criteria used for identifying reportable segments are
consistent with the way in which management runs the
Group.
In particular, segment information is structured in the same
way as the report periodically reviewed by the Chief Executive
Officer for the purposes of managing the business. In fact,
the Chief Executive Officer reviews operating performance
by macro type of business (Energy and Telecom), assesses
the results of operating segments primarily on the basis
of Adjusted EBITDA, defined as earnings (loss) for the
period before non-recurring items (eg. restructuring costs),
amortisation, depreciation and impairment, finance costs and
income, and taxes, and reviews the statement of financial
position for the Group as a whole, and not by operating
segment.
In order to provide users of the financial statements with
clearer information, certain economic data is also reported for
the following sales channels and business areas within the
individual operating segments:
A) Energy operating segment:
1. Utilities: organised in four lines of business, comprising
High Voltage, Power Distribution, Accessories and
Submarine;
2. Trade & Installers: cables and systems for the trade
and installers market for the wiring of buildings and
distribution of electricity to or in commercial and
residential buildings. Fire-resistant and low smoke
halogen-free cables complete one of the widest and most
comprehensive product ranges in the world;
F. SEGMENT INFORMATION
3. Industrial: cables and accessories for special
industrial applications based on specific requirements
(Specialties&OEM; Oil&Gas; Automotive; Renewable; Surf;
Elevator);
4. Other: occasional sales of residual products.
B)
Telecom operating segment: produces cable systems
and connectivity products used in telecommunication
networks. The segment is organised in the following
lines of business: optical fibre, optical cables,
connectivity components and accessories, OPGW
(Optical Ground Wire) and copper cables.
All Corporate fixed costs are allocated to the Energy and
Telecom segments. Revenues and costs are allocated to
each operating segment by identifying all revenues and
costs directly attributable to that segment and by allocating
indirect costs on the basis of Corporate resources (personnel,
space used, etc.) absorbed by the operating segments.
Group operating activities are organised and managed
separately based on the nature of the products and services
provided: each segment offers different products and services
to different markets. Sales of goods and services are analysed
geographically on the basis of the location of the registered
office of the company that issues the invoices, regardless of
the geographic destination of the products sold. This type of
reporting does not significantly differ from the breakdown
of sales of goods and services by destination of the products
being sold. Transfer pricing between segments is determined
using the same conditions as applied between Group
companies and is generally determined by applying a mark-up
to production costs.
