Note 2 Segment information

Alliander distinguishes the following reporting segments in 2019:

  • Network operator Liander

  • Other

This segmentation reflects the internal reporting structure, specifically the internal consolidated and segmented monthly reports, the annual plan and the business plan.

Network operator Liander forms the largest company within the Alliander group and is responsible for providing gas and electricity connections and for distributing gas and electricity in Gelderland and parts of Noord-Holland, Flevoland, Friesland and Zuid-Holland and is with over 85% of the revenue the largest business unit of Alliander.

The Other segment covers the entirety of the other operating segments within the Alliander group, such as the activities of Qirion, Stam and Alliander AG, new activities, the corporate staff departments and the service units. Qirion provides services relating to the construction and maintenance of complex energy infrastructures, on behalf of Liander as well as third parties. Alliander AG carries on network operation and public lighting activities in Germany. Stam is a medium-sized firm of contractors based in Noord-Holland, engaging in network construction and maintenance work. These activities are undertaken on behalf of third parties as well as on contract to Liander. Established as well as new activities include targeted investments in the infrastructure for electric vehicles, sustainable area development and sustainable housing. The corporate staff departments and service units include Shared Services and IT, which perform activities on behalf of Liander among others. All these activities can be combined into a single segment inasmuch as they do not satisfy the quantitative criteria in order to qualify separately as reporting segments.

Except for the corporate staff and service units, the business of the other operating segments exhibits similar characteristics, depending on the nature of the products and services and the nature of the production processes, viz.: supply, construction, management and maintenance of energy-related products and services. Given the scale of these other operating segments, other characteristics in the sense of customers and distribution channels are not relevant segment reporting distinctions. Furthermore, these operating segments have been aggregated in the Other segment since none of them satisfies the quantitative criteria that would qualify them as separate reporting segments.

Reporting

Alliander produces monthly management reports for the Management Board, with quarterly reports for the Supervisory Board as well. As regards both balance sheet and income statement, these reports use the same accounting policies and classification as the financial information contained in the financial statements. The Management Board assesses the performance of the business on the basis of these reports. The financial reports focus on the consolidated and segment information concerning operating expenses. The operating result is also included on a comparable basis, i.e. excluding incidental items and fair value movements. The operating result is total income less total expenses.

A statement showing the primary segmentation analysis is presented below, including reconciliation with the reported figures.

Notes

The external revenue of Liander mainly comprises income from energy transport, connection and metering services. In the Other segment, external revenue mainly derives from the services provided by Qirion, new activities and Stam and the income from network operation activities in Germany. The eliminations result from the internal services provided by corporate staff departments, service units (such as IT and Shared Services) and Stam to Liander. These internal supplies are made at cost.

Primary Segmentation

€ million

Network operator Liander

Other

Eliminations

Total

Reclassification to reported and incidental items

Reported

Income statement

2019

2018

2019

2018

2019

2018

2019

2018

2019

2018

2019

2018

Operating income

            

External income

1,773

1,772

197

191

-

-

1,970

1,963

-

105

1,970

2,068

Internal income

10

10

336

313

-346

-323

-

-

-

-

-

-

             

Total income

1,783

1,782

533

504

-346

-323

1,970

1,963

-

105

1,970

2,068

             

Operating expenses

            

Purchase costs and costs of subcontracted work

514

484

80

73

-142

-133

452

424

-

-

452

424

Operating expenses

714

703

420

464

-204

-190

930

977

17

3

947

980

Depreciation and impairments

334

327

109

82

-

-

443

409

6

-

449

409

Own work capitalised

-187

-177

-70

-64

-

-

-257

-241

-

-

-257

-241

             

Total operating expenses

1,375

1,337

539

555

-346

-323

1,568

1,569

23

3

1,591

1,572

             

Operating profit

408

445

-6

-51

-

-

402

394

-23

102

379

496

             

Finance income

14

10

79

83

-76

-73

17

20

-

-

17

20

Finance expense

-91

-92

-50

-47

76

73

-65

-66

-4

-

-69

-66

Share in results of associates and joint ventures after tax

1

3

-

-

-

-

1

3

-

-

1

3

Tax

-74

-117

-15

27

-

-

-89

-90

13

-29

-76

-119

             

Profit after tax from continuing operations

258

249

8

12

-

-

266

261

-14

73

252

334

             

Profit attributable to non-controlling interests

-

-

1

-

-

-

1

-

-

-

1

-

             

Profit after tax

258

249

9

12

-

-

267

261

-14

73

253

334

             

Segment assets and liabilities

            

Total assets

7,810

7,413

3,205

3,157

-2,224

-2,225

8,791

8,345

-

-

8,791

8,345

Non-consolidated investments in associates

-

-

1

2

-

-

1

2

-

-

1

2

Non-consolidated investments in joint ventures

2

2

3

-

-

-

5

2

-

-

5

2

Liabilities (non-current and current)

5,330

4,941

2,415

2,077

-3,178

-2,802

4,567

4,216

-

-

4,567

4,216

             

Other segment items

            

Investments in property, plant and equipment

746

659

88

72

-

-

834

731

-

-

834

731

Number of permanent staff at year-end

3,043

3,064

2,660

2,605

-

-

5,703

5,669

-

-

5,703

5,669

The profit after tax for 2019, like that for 2018, is almost entirely attributable to the shareholders of Alliander N.V.

Reclassification to reported and incidental items

In 2019 there are some incidental items in the column headed ‘Reclassification to reported and incidental items’. The incidental expenses included in operating expenses relate to organisational changes (€9 million) and a provision for loss-making contracts in Germany (€8 million). Aside from that, the depreciation and impairments relate to things such as buildings (€4 million) and assets in Germany (€2 million). 

The incidental financial expenses incurred in 2019 consist of the costs of the write-down on a long-term receivable relating to heating operations as a result of discontinuation of production (€4 million).

The income in 2019 comes as a result of the impact of the aforementioned incidental items on the corporate tax bill (€4 million), but particularly also on the back of changes to government plans with respect to the corporate income tax (€9 million). In 2018, the corporate tax rate was expected to be lowered from 2020 onwards, but revised plans have now postponed this.

Segment assets

The amounts in the eliminations column against total assets mainly concern the eliminations of the investments in the subsidiaries of Alliander. The eliminations against the liabilities relate to the current-account positions between the subsidiaries and Alliander. Within the Alliander group, there are group financing arrangements, involving central administration of external accounts. All the subsidiaries maintain a current account with Alliander. There are no assets or equity and liabilities that are not allocated.

Product segmentation

In compliance with IFRS 15, the following table discloses net revenue according to distinct products (product segmentation).

€ million

Segmentation of consolidated revenue by product

 

Total

Transport and connection service Electricity

Transport service Gas

Connection service Gas

Metering Service small consumers Electricity

Metering Service small consumers Gas

Other activities

Revenue 2019

1,930

1,132

333

88

113

65

199

Revenue 2018

1,920

1,154

326

99

93

63

185

Net revenue in 2019 amounted to €1,930 million (2018: €1,920 million), with other income of €40 million (2018: €148 million). In total, external income came in at €1,970 million (2018: €2,068 million). 

Seasonal influences

Alliander’s results are not materially affected by seasonal influences.

Geographical segmentation

 

External income

Property, plant and equipment

Intangible assets

Non-consolidated associates and joint ventures

€ million

2019

2018

2019

2018

2019

2018

2019

2018

The Netherlands

1,922

2,021

7,427

7,023

289

290

6

4

Rest of the world

48

47

49

49

24

25

-

-

         

Total

1,970

2,068

7,476

7,072

313

315

6

4

‘Rest of the world’ relates entirely to the activities in Germany.