7.Segment reporting

Segment reporting by business units

Energie AG Group identifies the reportable segments according to IFRS 8 on the basis of internal reporting and internal control (Management Approach).

The segment reporting includes the Energy, Grid, Waste Management, and Czech Republic and Holding & Services segments.

The accounting policies applied to the reported segments are the same as those applied throughout the Group. The operating result is the profit or loss for the period that is monitored regularly by the chief decision-makers and used as the primary basis for assessing success and allocating resources.

The sales transactions carried out between the Grid segment and the other segments primarily involve grid services for which the prices are based on regulatory stipulations. Intra-Group sales transactions in the Holding & Services segment primarily involve delivery of goods and services that are charged at prices corresponding to market conditions, as well as sales in the area of grid services (metering) which are charged at prices based on regulatory stipulations. Capital employed is the key figure relating to assets and liabilities in the Group that are reported to the chief operating decision makers on a regular basis. Capital employed includes above all equity and interest-bearing liabilities, less cash and cash equivalents, fixed term deposits, and certain financial assets.

Energy

The Energy segment figures include the production, trade and sales of electrical energy. Electricity is primarily generated using hydraulic and thermal power generation plants. In addition, electricity is also obtained from third-party power plants via procurement rights, as well as on the electricity market. The Energy segment includes Energie AG Oberösterreich Trading GmbH as a central electricity and gas trading company, as well as the 7-Fields gas reservoir. The trade with and distribution of natural gas, the heating business unit, as well as Energie AG Oberösterreich Vertrieb GmbH & Co KG (until 31 March 2019, fully consolidated from 1 April 2019), ENAMO GmbH (until 31 March 2019, fully consolidated from 1 April 2019), ENAMO Ökostrom GmbH (until 31 March 2019, fully consolidated from 1 April 2019), Bioenergie Steyr GmbH, Fernwärme Steyr GmbH, Windpower EP GmbH, Geothermie-Wärmegesellschaft Braunau-Simbach mbH, Geothermie-Fördergesellschaft Simbach-Braunau mbH and Energie Wärme Ried GmbH are allocated to the Energy segment.

Grid

The Grid segment includes the construction and operation of the electricity and gas grids.

Waste Management

The Waste Management segment primarily includes the acceptance, sorting, incineration and landfilling of domestic and industrial waste. “Papyrus” Altpapierservice Handelsgesellschaft m.b.H. (measured at equity), Papyrus Wertstoff Service GmbH and Austrian Metal Recovery GmbH are allocated to the Waste Management segment.

Czech Republic (previously: Water)

The Czech Republic segment primarily includes supplying drinking water, as well as disposing of wastewater. Due to internal restructuring measures within the Group, the heat-related activities in the Czech Republic have been allocated to the Czech Republic segment since 1 October 2018 (previously: Energy segment).

Holding & Services

The Holding & Services segment comprises the management and control functions of the segment, commercial and technical services, Energie AG Oberösterreich Telekom GmbH (telecom operations, metering), as well as the investments in Salzburg AG für Energie, Verkehr und Telekommunikation and Wels Strom GmbH, both recognised at equity.

Segment reporting by business units is as follows:

The Group's heat-related activities were transferred from the Energy segment to the Czech Republic segment (previously: Water segment) with effect on 1 October 2018. The heat-related activities in the Czech Republic generated sales revenues of EUR 15.1 million and an operating result of EUR 1.3 million in the 2018/2019 fiscal year.

Reversals of impairments amounting to EUR 7.9 million (previous year: EUR 2.1 million) were recognised for the Energy segment. The income from the reversal of construction cost subsidies attributable to the Grid segment amounted to EUR 25.7 million (previous year: EUR 24.8 million). Non-cash line items in connection with derivatives in the amount of EUR -2.5 million (previous year: EUR -5.0 million) pertain to the Energy segment.

Segment reporting broken down by geographic segments

Energie AG Oberösterreich Group operates primarily in the regions “Austria” and “Czech Republic”. Business operations in other countries (Italy, Germany, Slovenia, Hungary, Poland) are combined in the geographical segment “Other Countries”.