Note 2 Segment information

Alliander distinguishes the following reporting segments in 2021:

• 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 (sold on 10 January 2022) 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 regular 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, Telecom activities, new activities and Stam, and the income from network management 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

The profit after tax for 2021, like that for 2020, is almost entirely attributable to the shareholders of Alliander N.V.

Reclassification to reported and incidental items

In 2021 some exceptional items have been recognised in the column headed ‘Reclassification to reported items and exceptional items’. The sale of part of our shareholding in 450connect GmbH had a positive impact of €17 million on operating income in 2021.

The exceptional expenses included in operating expenses relate to the partial sale of 450connect (€10 million) and a released provision for a loss-making contract in Germany (-€5 million). Expenses for organisational changes were also incurred in 2021 to the amount of €5 million. In 2020, the expense of €19 million comprised organisational change costs of €9 million and the provision for a loss-making maintenance contract in one of the business units amounting to €10 million.

The sale of 450connect in 2021 led to exceptional depreciation of €3 million.

The exceptional expenses for 2021 of €4 million relate to the early termination of two CBL transactions. In 2020, the exceptional expenses were zero.

The income item in 2021 is the result of the impact of the previously mentioned exceptional items on corporate income tax (€1 million, 2020: gain of €3 million), and the notified increase in the corporate income tax rate. The deferred tax assets and liabilities were revalued accordingly, leading to a tax gain of €5 million. In 2020, revaluation of deferred tax assets and liabilities also led to a tax gain of €19 million.

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).

• 1 Alliander had recognised €28 million in revenue from metering services for high-volume customers (€20 million for electricity and €8 for gas) in its 2020 figures. From 2021, Alliander will only recognise revenue from metering services for low-volume customers in this column. The comparative figures have been adjusted accordingly.

Net revenue in 2021 amounted to €2,120 million (2020: €2,009 million), with other income of €61 million (2020: €46 million).

In total, external revenue came in at €2,181 million (2020: €2,055 million).

Seasonal influences

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

Geographical segmentation

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