Note 5 – Operating segments

The company has changed its internal operating structure and business performance assessment. The previous country based structure has been replaced by a market segment structure. Accordingly, the composition of the reportable segments has been revised in order to faithfully represent this new operating structure in three divisions; Branded Products, Barrier Packaging and Food Packaging. The comparative information on reportable segments has been restated in accordance with the new segment structure.

  • Branded products – offers packaging solutions for highly branded goods to the market.
  • Barrier packaging – offers high-performance packaging solutions and technology to the market.
  • Food packaging – offers packaging solutions mainly for food and food-on-the-go to the market.

The chief operating decision maker within the Group is the Executive Management Team, consisting of the chief executing officer, the chief financial officer and the business managers. The Executive Management team monitors the operating results of its business areas separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on operating profit (EBIT) and is measured consistently with operating profit (EBIT) in the consolidated financial statements. The Group’s financing (including financial expenses and financial income) and income taxes are managed on a Group basis and are not allocated to operating segments.

Transfer prices between operating segments are on an arm’s length basis in a manner similar to transactions with third parties.

Year ended 31 December 2015 Branded products Barrier Packaging Food Packaging Group common and eliminations Group total
Net sales:
External customers 264 848 155 138 93 223 308 513 517
Inter-segment 3 182 9 924 9 298 -22 404 0
Total net sales 268 030 165 062 102 521 -22 096 513 517
Net operating expenses -240 794 -150 954 -97 845 20 816 -468 777
whereof depreciation and amortisation -9 101 -4 049 -4 102 -517 -17 769
Operating profit (EBIT 1) 27 236 14 108 4 676 -1 280 44 740
Non-recurring items -1 416 -1 056 -3 729 -1 932 -8 133
Operating profit (EBIT) 25 820 13 052 947 -3 212 36 607
Financial income 61
Financial expense -9 972
Profit before tax 26 696
Income tax -6 712
Net profit for the period 19 984
Non-current assets 79 154 42 913 21 734 3 939 147 740

Acquired operations, with non-current assets of total 43 756 TEUR, are included in Branded products 2015.

Year ended 31 December 2014 Branded products Barrier packaging Food packaging Group common and eliminations Group total
Net sales:
External customers 162 074 142 517 99 389 350 404 330
Inter-segment 2 359 10 078 10 303 -22 740 0
Total net sales 164 433 152 595 109 692 -22 390 404 330
Net operating expenses -152 388 -142 108 -103 790 21 344 -376 942
whereof depreciation and amortisation -6 359 -4 241 -4 119 -388 -15 107
Operating profit (EBIT 1) 12 045 10 487 5 902 -1 046 27 388
Non-recurring items -1 368 -869 -149 742 -1 644
Operating profit (EBIT) 10 677 9 618 5 753 -304 25 744
Financial income 207
Financial expense -10 013
Profit before tax 15 938
Income tax -342
Net profit for the period 15 596
Non-current assets 44 617 42 667 25 772 3 744 116 800
Year ended 31 December 2013 Branded products Barrier packaging Food packaging Other, eliminations Group total
Net sales:
External customers 169 950 150 834 102 719 680 424 183
Inter-segment 419 9 479 10 786 -20 684 0
Total net sales 170 369 160 313 113 505 -20 004 424 183
Net operating expenses -157 648 -152 426 -108 041 18 073 -400 042
whereof depreciation and amortisation -6 769 -4 817 -4 349 -677 -16 612
Operating profit (EBIT1) 12 721 7 887 5 464 -1 931 24 141
Non-recurring items -180 -1 941 -226 -297 -2 644
Operating profit (EBIT) 12 541 5 946 5 238 -2 228 21 497
Financial income 211
Financial expense -10 095
Profit Before tax 11 613
Income tax -2 970
Net profit for the period 8 643
Non-current assets 46 964 46 483 26 131 4 903 124 481

Consolidated net sales per geographical market are distributed based on the locations of the customers:

Net sales per geographical market
2015 2014 2013
Russia 93 148 75 837 82 884
Germany 74 068 55 429 55 343
France 55 184 55 514 63 162
Sweden 39 585 38 380 43 370
Great Britain 37 722 32 434 30 970
Poland 31 693 13 517 12 077
Ireland 31 085 27 946 20 583
Rest of Europe 143 624 98 823 107 838
Rest of world 7 408 6 450 7 956
Total 513 517 404 330 424 183

Net sales to our two biggest customers, which both individually stands for more than 10% of the total net sales, amounted to 193 315 TEUR, 109 431 TEUR and 83 884 TEUR respectively. Net sales to the biggest customers are included in operating segment Branded products.

Previous years net sales coming from our two biggest customers, which both individually stands for more than 10% of the total net sales, amounted to 133 220 TEUR, 84 681 TEUR and 48 539 TEUR respectively. Net sales to the biggest customers are included in operating segment Branded products and Barrier Packaging.

Net sales 2013 coming from our two biggest customers, which both individually stands for more than 10% of the total net sales, amounted to 135 918 TEUR, 89 698 TEUR and 46 220 TEUR respectively.

The Group’s non-current assets consisting of intangible assets (including goodwill), property, plant and equipment, investment properties and investments in joint ventures, are attributable to the following countries:

Non current assets 2015 2014 2013
Sweden 48 120 51 645 59 445
Austria 31 128 0 0
Germany 27 480 28 278 28 958
Russia 18 229 19 411 22 578
Other countries 22 783 17 466 13 531
Total 147 740 116 800 124 512