IFRS 8 requires operating segments to be identified on the basis of internal reports about components of the Group that are regularly reviewed by the Chief Executive to allocate resources to the segments and to assess their performance.
The Group's reportable segments have been determined in accordance with the activity of the Group, focusing on key market sectors. Principally, this splits the Group into two business areas being:
- Aerospace, Defence & Energy (ADE); and
- Automotive & General Industrial (AGI).
This initial split is determined following consideration of factors including the different customer sets, differing service requirements and different characteristics of business activity. A further split is then made for the geographical divisions of the Group being:
- Western Europe
- North America; and
- Emerging Markets.
| Group | ADE
2012
£m | AGI
2012
£m | Head Office
and
eliminations
2012
£m | Consolidated
2012
£m |
|---|
| Revenue | | | | |
| Total revenue | 260.4 | 327.4 | – | 587.8 |
| Result | | | | |
| Headline operating profit prior to share-based payments and unallocated corporate expenses | 71.4 | 45.1 | – | 116.5 |
| Share-based payments | (1.8) | (1.5) | (2.1) | (5.4) |
| Unallocated corporate expenses | – | – | (13.2) | (13.2) |
| Headline operating profit / (loss) | 69.6 | 43.6 | (15.3) | 97.9 |
| Amortisation of acquired intangible fixed assets | (1.1) | (0.9) | – | (2.0) |
| Profit on disposal of investment | – | – | 2.4 | 2.4 |
| Acquisition costs | (0.8) | (1.7) | – | (2.5) |
| Reorganisation costs | – | – | (2.4) | (2.4) |
| Segment result | 67.7 | 41.0 | (15.3) | 93.4 |
| Investment revenue | | | | 0.2 |
| Finance costs | | | | (3.8) |
| Profit before taxation | | | | 89.8 |
| Taxation | | | | (22.8) |
| Profit for the year | | | | 67.0 |
Inter-segment sales are not material in either year.
The Group does not rely on any individual major customers.
| Aerospace, Defence & Energy | Western Europe
2012
£m | North America
2012
£m | Emerging markets
2012
£m | Total ADE
2012
£m |
|---|
| Revenue | | | | |
| Total revenue | 118.3 | 140.4 | 1.7 | 260.4 |
| Result | | | | |
| Headline operating profit / (loss) prior to share-based payments | 27.9 | 43.7 | (0.2) | 71.4 |
| Share-based payments | (0.5) | (1.3) | – | (1.8) |
| Headline operating profit / (loss) | 27.4 | 42.4 | (0.2) | 69.6 |
| Amortisation of acquired intangible fixed assets | (0.3) | (0.8) | – | (1.1) |
| Acquisition costs | – | (0.8) | – | (0.8) |
| Segment result | 27.1 | 40.8 | (0.2) | 67.7 |
| Automotive & General Industrial | Western Europe
2012
£m | North America
2012
£m | Emerging markets
2012
£m | Total AGI
2012
£m |
|---|
| Revenue | | | | |
| Total revenue | 219.2 | 61.8 | 46.4 | 327.4 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 30.3 | 13.1 | 1.7 | 45.1 |
| Share-based payments | (1.0) | (0.5) | – | (1.5) |
| Headline operating profit | 29.3 | 12.6 | 1.7 | 43.6 |
| Amortisation of acquired intangible fixed assets | (0.2) | (0.5) | (0.2) | (0.9) |
| Acquisition costs | – | (1.7) | – | (1.7) |
| Segment result | 29.1 | 10.4 | 1.5 | 41.0 |
| Group | ADE
2011
£m | AGI
2011
£m | Head Office
and eliminations 2011
£m | Consolidated 2011
£m |
|---|
| Revenue | | | | |
| Total revenue | 233.5 | 337.2 | – | 570.7 |
| Result | | | | |
| Headline operating profit prior to share-based payments and unallocated corporate expenses | 53.2 | 47.8 | – | 101.0 |
| Share-based payments | (2.1) | (3.1) | (2.0) | (7.2) |
| Unallocated corporate expenses | – | – | (8.3) | (8.3) |
| Headline operating profit / (loss) | 51.1 | 44.7 | (10.3) | 85.5 |
| Amortisation of acquired intangible fixed assets | (0.2) | (0.7) | – | (0.9) |
| Impairment charge | – | (4.2) | – | (4.2) |
| Segment result | 50.9 | 39.8 | (10.3) | 80.4 |
| Investment revenue | | | | 0.2 |
| Finance costs | | | | (4.8) |
| Profit before taxation | | | | 75.8 |
| Taxation | | | | (19.8) |
| Profit for the year | | | | 56.0 |
| Aerospace, Defence & Energy | Western Europe
2011
£m | North America
2011
£m | Emerging markets
2011
£m | Total ADE
2011
£m |
|---|
| Revenue | | | | |
| Total revenue | 111.9 | 120.1 | 1.5 | 233.5 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 23.6 | 29.4 | 0.2 | 53.2 |
| Share-based payments | (1.0) | (1.1) | – | (2.1) |
| Headline operating profit | 22.6 | 28.3 | 0.2 | 51.1 |
| Amortisation of acquired intangible fixed assets | (0.2) | – | – | (0.2) |
| Segment result | 22.4 | 28.3 | 0.2 | 50.9 |
| Automotive & General Industrial | Western Europe
2011
£m | North America
2011
£m | Emerging markets
2011
£m | Total AGI
2011
£m |
|---|
| Revenue | | | | |
| Total revenue | 239.6 | 47.4 | 50.2 | 337.2 |
| Result | | | | |
| Headline operating profit prior to share-based payments | 36.0 | 8.3 | 3.5 | 47.8 |
| Share-based payments | (2.5) | (0.5) | (0.1) | (3.1) |
| Headline operating profit | 33.5 | 7.8 | 3.4 | 44.7 |
| Amortisation of acquired intangible fixed assets | (0.1) | – | (0.6) | (0.7) |
| Impairment charge | – | – | (4.2) | (4.2) |
| Segment result | 33.4 | 7.8 | (1.4) | 39.8 |
Other information
| Group | ADE
2012
£m | AGI
2012
£m | Head Office
and eliminations 2012
£m | Consolidated 2012
£m |
|---|
| Capital additions | 22.9 | 25.8 | 3.7 | 52.4 |
| Depreciation and amortisation | 19.6 | 31.4 | 1.9 | 52.9 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 313.4 | 449.6 | 28.0 | 791.0 |
| Other investments | – | – | 1.6 | 1.6 |
| Consolidated total assets | 313.4 | 449.6 | 29.6 | 792.6 |
| Liabilities: | | | | |
| Segment liabilities | (68.7) | (126.9) | (92.6) | (288.2) |
| 244.7 | 322.7 | (63.0) | 504.4 |
| Allocation of head office net liabilities | (27.2) | (35.8) | 63.0 | – |
| Adjusted segment net assets | 217.5 | 286.9 | – | 504.4 |
| Aerospace, Defence & Energy | Western Europe
2012
£m | North America
2012
£m | Emerging markets
2012
£m | Total ADE
2012
£m |
|---|
| Capital additions | 6.5 | 16.4 | – | 22.9 |
| Depreciation and amortisation | 10.0 | 9.4 | 0.2 | 19.6 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 150.2 | 160.5 | 2.7 | 313.4 |
| Liabilities: | | | | |
| Segment liabilities | (36.1) | (31.4) | (1.2) | (68.7) |
| Segment net assets | 114.1 | 129.1 | 1.5 | 244.7 |
| Automotive & General Industrial | Western Europe
2012
£m | North America
2012
£m | Emerging markets
2012
£m | Total AGI
2012
£m |
|---|
| Capital additions | 16.8 | 4.9 | 4.1 | 25.8 |
| Depreciation and amortisation | 22.3 | 4.0 | 5.1 | 31.4 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 273.0 | 112.1 | 64.5 | 449.6 |
| Liabilities: | | | | |
| Segment liabilities | (96.7) | (17.3) | (12.9) | (126.9) |
| Segment net assets | 176.3 | 94.8 | 51.6 | 322.7 |
| Group | ADE
2011
£m | AGI
2011
£m | Head Office
and eliminations 2011
£m | Consolidated 2011
£m |
|---|
| Capital additions | 16.1 | 27.7 | 2.2 | 46.0 |
| Depreciation and amortisation | 18.5 | 30.8 | 1.8 | 51.1 |
| Impairment losses recognised in income | – | 4.2 | – | 4.2 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 314.0 | 411.7 | 32.2 | 757.9 |
| Other investments | – | – | 0.8 | 0.8 |
| Consolidated total assets | 314.0 | 411.7 | 33.0 | 758.7 |
| Liabilities: | | | | |
| Segment liabilities | (67.3) | (128.0) | (80.8) | (276.1) |
| 246.7 | 283.7 | (47.8) | 482.6 |
| Allocation of head office net liabilities | (22.2) | (25.6) | 47.8 | – |
| Adjusted segment net assets | 224.5 | 258.1 | – | 482.6 |
| Aerospace, Defence & Energy | Western Europe
2011
£m | North America
2011
£m | Emerging markets
2011
£m | Total ADE
2011
£m |
|---|
| Capital additions | 5.0 | 11.1 | – | 16.1 |
| Depreciation and amortisation | 10.5 | 7.8 | 0.2 | 18.5 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 171.8 | 140.1 | 2.1 | 314.0 |
| Liabilities: | | | | |
| Segment liabilities | (33.6) | (33.4) | (0.3) | (67.3) |
| Segment net assets | 138.2 | 106.7 | 1.8 | 246.7 |
| Automotive & General Industrial | Western Europe
2011
£m | North America
2011
£m | Emerging markets
2011
£m | Total AGI
2011
£m |
|---|
| Capital additions | 17.7 | 3.9 | 6.1 | 27.7 |
| Depreciation and amortisation | 22.4 | 3.3 | 5.1 | 30.8 |
| Impairment losses recognised in income | – | – | 4.2 | 4.2 |
| Balance sheet | | | | |
| Assets: | | | | |
| Segment assets | 292.9 | 56.0 | 62.8 | 411.7 |
| Liabilities: | | | | |
| Segment liabilities | (96.3) | (15.3) | (16.4) | (128.0) |
| Segment net assets | 196.6 | 40.7 | 46.4 | 283.7 |
Geographical information
The Group's revenue from external customers and information about its segment assets (non-current assets excluding financial instruments, deferred tax assets and other financial assets) by country are detailed below:
| Revenue from external customers | Non-current
assets |
|---|
| 2012
£m | 2011
£m | 2012
£m | 2011
£m |
|---|
| USA | 194.2 | 156.3 | 233.3 | 153.4 |
| France | 90.1 | 91.9 | 70.1 | 74.6 |
| UK | 63.9 | 59.4 | 72.7 | 74.1 |
| Germany | 60.5 | 67.7 | 64.7 | 70.2 |
| Sweden | 42.1 | 47.3 | 44.3 | 43.2 |
| Netherlands | 24.1 | 25.7 | 20.8 | 21.4 |
| Others | 112.9 | 122.4 | 111.2 | 119.3 |
| 587.8 | 570.7 | 617.1 | 556.2 |