History Note 29

Notes to the Consolidated Financial Statements

1. Basic information and principles of the report

2. Changes in Group structure

3. Summary of significant accounting policies

4. Risk assessment and management

5. Management of capital

6. Trade accounts receivable

7. Other current assets and current financial assets

8. Inventories

9. Property, plant and equipment

10. Other non-current assets and non-current financial assets

11. Goodwill and intangible assets

12. Short-term debt

13. Other current liabilities and provisions

14. Long-term debt

15. Financial instruments

16. Retirement benefit plans

17. Participation plans

18. Deferred tax assets and liabilities

19. Other non-current liabilities and provisions

20. Contingencies

21. Capital stock and treasury shares

22. Earnings per share

23. Other operating expenses, net

24. Financial result, net

25. Income tax expenses

26. Operating Leasing

27. Research and development cost

28. Cashflow figures

29. Segment reporting

The Geberit Group consists of one single business unit, the purpose of which is to develop, produce and distribute sanitary products and systems for the residential and commercial construction industry. The major part of the products is distributed through the wholesale channel in general to plumbers, who resell the products to the end users. Products are produced by plants that specialise in particular production processes. As a general rule, one specific article is produced at only one location. Distribution is carried out by country or regional distribution subsidiaries, which sell to wholesalers. A distribution subsidiary is always responsible for the distribution of the whole range of products in its sales area. The main task of the distribution subsidiary is local market development, which focuses mainly on the support of plumbers, sanitary planners and wholesalers. Research and development of the whole range of products are carried out centrally by Geberit International AG. All corporate tasks are also centralised at Geberit International AG.

Due to the unity and focus of the business, the top management (Group Executive Board) and the management structure of the Geberit Group are organised by function (Overall Management, Sales Europe, Sales International, Marketing & Brands, Operations, Product Management & Innovation, Finance). The financial management of the Group by the Board of Directors and the Group Executive Board is based on net sales by markets and product lines and on the consolidated income statements, balance sheets, and statements of cashflows.

Segment reporting is therefore prepared according to IFRS 8.31 et seq. (one single reportable segment) and the valuation is made according to the same principles as the consolidated financial statements. The geographical allocation of net sales is based on the domicile of the customers.

The information is as follows:

2017 2016
Net sales by product lines    
Installation Systems 871.3 789.9
Cisterns and Mechanisms 252.5 254.7
Faucets and Flushing Systems 129.2 123.4
Waste Fittings and Traps 108.5 95.5
Sanitary Systems 1,361.5 1,263.5
Building Drainage Systems 329.9 300.6
Supply Systems 535.6 523.2
Piping Systems 865.5 823.8
Bathroom Ceramics 546.8 561.5
Ceramics Complementary Products 134.5 160.2
Sanitary Ceramics 681.3 721.7
Total net sales 2,908.3 2,809.0

2017 2016
Net sales by markets    
Germany 867.3 861.0
Nordic Countries 313.7 306.3
Switzerland 278.6 281.0
Central/Eastern Europe 280.1 256.8
Benelux 231.6 219.0
Italy 201.2 185.9
France 176.3 170.8
Austria 161.2 147.3
United Kingdom/Ireland 110.5 123.2
Iberian Peninsula 21.4 18.8
Other markets 266.4 238.9
Total net sales 2,908.3 2,809.0

2017 2016
Share of net sales by customers    
Customers with more than 10% of net sales: customer A 435.5 403.3
Total > 10% 435.5 403.3
Remaining customers with less than 10% of net sales 2,472.8 2,405.7
Total net sales 2,908.3 2,809.0

2017 2016
Property, plant and equipment by markets    
Germany 298.7 250.0
Nordic Countries 39.2 36.0
Switzerland 161.7 161.7
Central/Eastern Europe 128.5 107.4
Benelux 5.4 4.9
Italy 57.6 48.5
France 10.0 10.2
Austria 42.6 39.6
United Kingdom/Ireland 2.5 2.3
Iberian Peninsula 13.5 11.7
Other markets 53.1 54.2
Total property, plant and equipment 812.8 726.5

30. Related party transactions

31. Foreign exchange rates

32. Subsequent events

33. Group companies as at 31 December 2017