(e) Operating segment information
As per IFRS 8, an operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses, whose segmental operating results are regularly reviewed by the entity’s chief operating decision maker, and for which distinct financial information is available.
The Management Board, as chief operating decision-maker, monitors the operating results of its operating segments separately for the purpose of making decisions about resource allocation and performance assessment. Segment performance is evaluated based on revenue, gross margin, EBIT and EBITDA, and prepared in accordance with Directional reporting. The Company has two reportable segments:
- The Lease and Operate segment includes all earned charter rates and fees from lease and operate arrangements as well as fees from operating and maintenance agreements for vessels not owned by the Company.
- The Turnkey segment includes revenues from Turnkey supply contracts and after-sales services, which consist mainly of large production systems, large mooring systems, deepwater export systems, fluid transfer systems, tanker loading and discharge terminals, design services, supply of special components and proprietary designs and equipment and brownfield activities. The new energy business, which mainly relates to the Company’s partnership in floating offshore wind solutions, also forms part of the Turnkey segment.
No operating segments have been aggregated to form the above reportable segments.
The Company’s corporate overhead functions do not constitute an operating segment as defined by IFRS 8 ’Operating segments’ and are reported under the ’Other’ section in note 4.3.2 Operating Segments and Directional Reporting.
Operating segment information is prepared and evaluated based on Directional reporting, for which the main principles are explained in note 4.3.2 Operating Segments and Directional Reporting.