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 The previous country based structure has been replaced by a market based structure.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 below 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

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

Net sales per geographical market
2015 2014
Russia 93 148 75 837
Germany 74 068 55 429
France 55 184 55 514
Sweden 39 585 38 380
Great Britain 37 722 32 434
Poland 31 693 13 517
Ireland 31 085 27 946
Rest of Europe 143 624 98 823
Rest of the world 7 408 6 450
Total 513 517 404 330

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.

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

Non current assets 2015 2014
Sweden 48 120 51 645
Austria 31 128 0
Germany 27 480 28 278
Russia 18 229 19 411
Other countries 22 783 17 466
Total 147 740 116 800