Integrated Annual Report 2015
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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. Operative 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 industrial construction industry. All products are distributed using the same distribution channel – wholesale – in general to plumbers, who resell the products to the end users. Products are produced by plants that specialize 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 comprises as a main focus the support of plumbers, sanitary planners and wholesalers. Research and development of the whole range of products is carried out centrally by Geberit International AG. All corporate tasks are also centralized 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 organized by function (overall management, products, sales, marketing & brands, finance). The financial management of the Group by the Board of Directors and the Group Executive Board is based on sales by markets and product lines and on the consolidated income statements, balance sheets, and statements of cashflows.

The acquisition of the Sanitec Group has no effect on segment reporting. The Sanitec activities will be fully integrated into the Geberit business model which means that all Sanitec companies will be fully integrated into the functional organisational structure of the Geberit Group. Sales activities will be pooled in a single local sales company for each country or region. Geberit International AG will assume responsibility for the Sanitec Group's development activities. The Group's financial management remains unchanged.

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 customers.

The information is as follows:

2015 2014
Net sales by product lines    
Installation Systems 724.1 769.0
Cisterns and Mechanisms 221.2 240.1
Faucets and Flushing Systems 117.9 113.0
Waste Fittings and Traps 82.7 86.0
Sanitary Systems 1,145.9 1,208.1
Building Drainage Systems 286.1 300.9
Supply Systems 512.7 580.1
Piping Systems 798.8 881.0
Bathroom Ceramics 478.1 0.0
Ceramics Complementary Products 170.9 0.0
Sanitary Ceramics 649.0 0.0
Total net sales 2,593.7 2,089.1

2015 2014
Net sales by markets    
Germany 798.2 717.7
Switzerland 275.7 273.5
Nordic Countries 253.3 95.7
Central/Eastern Europe 238.2 155.4
Benelux 195.8 165.3
Italy 172.6 160.2
France 153.1 92.4
Austria 129.8 136.4
United Kingdom/Ireland 126.1 74.6
Iberian Peninsula 17.3 15.6
Other markets 233.6 202.3
Total net sales 2,593.7 2,089.1

2015 2014
Share of net sales by customers    
Customers with more than 10% of net sales: customer A 376.2 333.3
Total > 10% 376.2 333.3
Remaining customers with less than 10% of net sales 2,217.5 1,755.8
Total net sales 2,593.7 2,089.1

2015 2014
Property, plant and equipment by markets    
Germany 232.8 196.0
Switzerland 169.3 171.0
Nordic Countries 43.7 1.7
Central/Eastern Europe 102.9 44.2
Benelux 3.4 3.6
Italy 45.3 33.9
France 10.7 0.5
Austria 38.0 41.2
United Kingdom/Ireland 1.7 1.8
Iberian Peninsula 11.2 0.4
Other markets 56.4 56.6
Total property, plant and equipment 715.4 550.9

30. Related party transactions

31. Foreign exchange rates

32. Subsequent events

33. Group companies as of December 31, 2015